We’re adding a new feature called the ‘BIP Quick Analysis’. We wanted to provide a quick look at stocks with upcoming catalyst with a minimal amount of editorial to help, you, the retail investor on your due diligence quest. As the name implies, these will be quicker for us to write and, therefore, we should be able to get one of these out for every company coming up to a Phase III or later catalyst.
I also want to point out T. Ayers Pelz’ The Biotech Traders Handbook, which certainly helped fine-tune our quick analysis structure. It’s an excellent resource for biotech traders – especially in the area of options plays around biotech catalysts – and I’d highly recommend anyone serious about investing in this area to pick up a copy.
Please enjoy our first ‘BIP Quick Analysis’ on Corcept Therapeutics!
Upcoming Catalyst:
NDA submission for Corlux (mifepristone) for the treatment of Cushing’s syndrome – end of 1Q 2011.
Implied volatility of near-the-money calls in the May expiration series fall in the 70-90 range. This makes the catalyst a moderate volatility event.
Capital Structure (as of Sept 30):
Current cash – $29.0MM
Cash burn – Operating free cash flow (ttm) was -$21MM. “We anticipate that our current cash balance is sufficient to fund the company into the third quarter of 2011” – Caroline Loewy, Chief Financial Officer of Corcept, from earnings release on Nov. 1, 2010.
Cash per share – $0.40 based on 72.4MM shares outstanding.
Debt – No major debt financing
On August 19, 2010, Corcept filed a S-3 mixed shelf registration with the U.S. Securities and Exchange Commission to sell, from time to time, up to $100 million of Debt Securities, Preferred Stock, Common Stock, Equity Warrants, Debt Warrants, or any combination thereof.
Ownership:
% of Shares Held by All Insider and 5% Owners – 59%
% of Shares Held by Institutional & Mutual Fund Owners – 20%
% of Float Held by Institutional & Mutual Fund Owners – 49%
Major Holder – Total Shares – % of Shares Oustanding
Longitude Venture Partners – 11,826,929 – 16.3%
Sutter Hill Ventures – 5,525,017 – 7.6%
Alta BioPharma Partners – 5,484,063 – 7.6%
Federated Investors, Inc. – 3,776,225 – 5.2%
Recent Insider Transactions:
1/3/11 – Sell – James Wilson (director) – 15,000 shares – 3,011,285 remaining (trust and family partnership combined)
1/3/11 – Sell – Robert Roe (officer – president and secretary) – 30,000 – 128,890 remaining
Short Interest:
Analyst Recommendations:
1/4 – Leerink Swann maintains outperform.
12/23 – Ladenburg Thalmann maintains buy, price target $6.50.
12/23 – JMP Securities maintains market outperform, price target $7.00.
12/22 – Stifel Nicolaus maintains buy, price target $7.00.
12/22 – Piper Jaffray maintains overweight, price target $7.40.
12/22 – Global Hunter Securites maintains buy, price target $5.00.
Pipeline:
Corlux for Cushing’s Syndrome Phase III trial met secondary endpoint of ‘global clinical improvement – January 11, 2011.
Corlux for Cushing’s Syndrome Phase III trial met primary endpoints in all patient groups – December 22, 2010.
Corlux for Psychotic Depression Phase III trial missed primary endpoint – March 19, 2007.
Chart:
CORT appears to have not established a definite trend after a major ‘sell the news’ event in late December on Phase III data release for Corlux in Cushing’s Syndrome patients and then a major spike in price after news of achieving key secondary endpoints in the study. The current price appears to be testing a $4.40 resistance level. In the short term, look for either additional testing of this key resistance level or a minor correction upon failure to break through. $4.00 has been a strong support level over the past few months, so look for that to be a near-term floor. We are expecting a run-up in share price over the next two months as we approach NDA submission in late Q1 2011.
Disclosure: Long CORT.
