$3.64
$20.91
bear $3.64
base $10.18
bull $20.91
margin of safety $5.56
market price* $110.16
Business condition attached to the margin of safety
Average selling price for Korlym/the authorized generic stabilizes (flat to up sequentially for a couple of quarters) and/or there is clarity on relacorilant's path back to FDA review - evidence the post-generic-entry earnings base has actually stopped shrinking.
Corcept Therapeutics is a specialty pharmaceutical company built almost entirely around Korlym (mifepristone), a treatment for the symptoms of Cushing's syndrome (hypercortisolism) in patients who cannot have surgery. For most of the company's history, Korlym had no direct branded or generic competition, which produced very high margins and rapid, steady growth in cash generation. That picture has changed materially in the last two years, and this is the central fact of the valuation. Teva won a long-running patent dispute over its own generic version of mifepristone: a federal district court ruled in December 2023 that Teva's product does not infringe Corcept's patents, Teva launched its generic in January 2024, and on February 19, 2026 the Court of Appeals for the Federal Circuit affirmed that loss. Corcept responded by launching its own, lower-priced "authorized generic" version of Korlym in June 2024 to defend volume. The effect shows up clearly in the numbers: in fiscal 2025, unit volume grew 37% but the average price per unit fell 17.7%, and operating costs (higher stock-based compensation and ongoing legal costs, among other things) grew much faster than revenue. Owner earnings - the cash the business could distribute after genuinely maintaining itself - fell from about $0.88 per share in 2024 to about $0.53 per share in 2025, even as reported revenue grew 12.8%. Two other pharmaceutical companies, Sun Pharmaceutical and Hikma, hold settlements that let them also sell generic mifepristone once certain conditions are met, so further price competition is a live possibility, not a hypothetical one. The company's main hope for a second growth driver has also been delayed. Relacorilant, a next-generation cortisol modulator designed for a broader population of hypercortisolism patients than Korlym can treat, met its primary trial endpoint, but on December 30, 2025 the FDA issued a Complete Response Letter declining to approve it, asking for additional evidence of efficacy. Corcept says it is working with the FDA on a path forward, but there is no approved replacement product today, and no committed timeline for one. Because Korlym's economics are now visibly a wasting asset rather than a durable monopoly, we have not assumed the business simply returns to its old growth trajectory, and we have not assumed growth continues forever past our ten-year forecast - either would overstate what this specific franchise can be expected to sustain. In the case we consider most likely, price pressure from the authorized generic continues to bite for another year or so before leveling off, as the same growth in diagnosed patients that has driven Corcept for years continues to offset further price erosion, helped by a price increase already put through in August 2025. Owner earnings per share grows only modestly (low single digits annually) over the ten-year forecast and is then held flat - not growing - afterward, reflecting a smaller, lower-margin but still-functioning Korlym/authorized-generic franchise, with no value assumed for relacorilant succeeding. That produces an estimated value of roughly $10 per share today, with more than half of that coming from the years beyond the explicit ten-year forecast - a vote that some form of this cash flow persists, but not that it grows. In a materially worse case, which we think is roughly a one-in-ten outcome, Sun and/or Hikma also begin selling generic mifepristone, price erosion accelerates beyond what 2025 already showed, and relacorilant is not approved within the next decade. Owner earnings per share declines every year of the forecast, and what the business earns beyond year ten is treated as a shrinking stream rather than a flat one. That produces an estimated value of roughly $3.60 per share - not below zero, since Corcept carries no meaningful debt, but a serious erosion in what the business is worth. In a materially better case, also roughly a one-in-ten outcome, relacorilant is ultimately approved after Corcept supplies the additional data the FDA has asked for, giving the company a genuine second product for a larger patient population, and other pipeline work (including combination-therapy trials in ovarian and prostate cancer) also shows progress. Even here we have not assumed growth continues forever - only that owner earnings roughly double over the decade before leveling off. That produces an estimated value of roughly $21 per share. Because so much of the middle and upper estimates depend on things that have not happened yet - stabilized pricing, a still-undefined path for relacorilant - the margin-of-safety price sits at a meaningful discount to our estimate of fair value, at roughly $5.50 per share, and it assumes the price erosion actually stops showing up quarter to quarter. Two notes for readers. First, Corcept develops its intellectual property internally rather than through acquisitions, so there is no purchased-goodwill or acquired-intangible amortization to correct for here; the risk from Korlym's fading exclusivity is instead reflected in slower assumed growth and in the downside case described above, rather than as an adjustment to the reported earnings level itself. Second, we could not fully separate, from the filings alone, how much of 2025's higher operating costs were one-time (legal costs tied to the Teva appeal, a stock-based compensation charge that moves with the share price) versus likely to persist, so we have treated the elevated 2025 cost level as a mix of the two rather than assuming it fully reverses or fully continues.