Corcept Therapeutics Stock Plummets as FDA Reveals It Warned Company Against Drug Submission

By Kamal Choudhury

BENGALURU, Jan 30 (Reuters) – Corcept Therapeutics faced a sharp market backlash on Friday, with its stock tumbling 16%, after a revised communication from the U.S. Food and Drug Administration laid bare that regulators had explicitly warned the biopharma firm on multiple occasions not to submit its drug for approval.

The disclosure came via a corrected "complete response letter" (CRL) – the FDA's formal notice rejecting a new drug application. The agency had originally rejected Corcept's oral medication, relacorilant for Cushing's syndrome-related hypertension, in late December. The rare endocrine disorder results from prolonged high cortisol levels.

The January 28 version of the letter, however, contained a critical new detail: the FDA stated it had told Corcept to "expect significant review issues" if it moved forward with the submission. This rare admonition, posted to the FDA's website Thursday afternoon, sent shockwaves through investor circles.

"It is highly unusual for the FDA to use such direct language in a CRL," noted UBS analyst Ashwani Verma. "Management indicated they filed based on their regulatory advisors' counsel, but the FDA's stance, as reflected in the letter's wording, was evidently very firm."

The agency's rejection was grounded in a failed primary clinical trial where relacorilant showed "virtually no difference" from a placebo. More alarmingly, the FDA flagged serious liver safety signals, citing four cases of probable drug-induced liver injury. One patient exhibited liver enzyme levels soaring to over 50 times the normal upper limit.

The corrected letter gives Corcept one year to address the issues and resubmit, warning that inaction will be treated as a withdrawal request. The company did not immediately comment on the development.

The episode highlights the high-stakes, and sometimes contentious, dialogue between drug developers and regulators, especially for treatments targeting complex, rare diseases with unmet needs.

Market Voices:

"This is a brutal but necessary transparency," said Dr. Anya Sharma, a portfolio manager at a healthcare-focused hedge fund. "The market is now pricing in not just the clinical setback, but also a potential credibility gap with regulators. It will take time and clear data to rebuild that trust."

"As a Cushing's patient advocate, I'm devastated but also furious," remarked Michael T. Ridge, founder of the Cushing's Support Network. "We're desperate for new options, but this feels like a company rushed a flawed application despite clear warnings. It's a setback for the entire community and raises questions about whether patient hope was prioritized over solid science."

"The corrected letter is a significant data point for all biotech investors," added David Chen, a biotech analyst at a mid-sized firm. "It underscores that while the FDA is open to dialogue, ignoring its guidance carries substantial financial and regulatory risk. The focus now is on whether Corcept can generate new data within the year to salvage this program."

(Reporting by Kamal Choudhury in Bengaluru; Editing by Maju Samuel)