The final trading day of 2025 brought a harsh reminder of the risks inherent in pharmaceutical investing. Corcept Therapeutics (NASDAQ: CORT) saw its stock price collapse by nearly 48% on Tuesday after the U.S. Food and Drug Administration issued a Complete Response Letter rejecting the company's application for relacorilant as a treatment for hypercortisolism.

The devastating decline—one of the largest single-day drops for any major biotech company this year—wiped out approximately $3.7 billion in market value and sent shares tumbling from around $70 to the mid-$30s.

The Unexpected Rejection

What makes the FDA's decision particularly stunning is that it came despite positive clinical trial results. According to Corcept, the agency acknowledged that the company's pivotal GRACE trial met its primary endpoint and that data from the confirmatory GRADIENT trial provided supporting evidence of efficacy.

Yet the FDA concluded it could not arrive at a favorable benefit-risk assessment without additional evidence of effectiveness—a determination that blindsided both the company and Wall Street analysts who had anticipated approval.

"We are surprised and disappointed by this outcome. Our commitment to patients suffering from the effects of hypercortisolism is unwavering, and we look forward to working with the FDA to determine the best path forward."

— Joseph K. Belanoff, MD, Chief Executive Officer of Corcept Therapeutics

Understanding Hypercortisolism

Hypercortisolism, also known as Cushing's syndrome, occurs when the body produces excessive amounts of the hormone cortisol over a prolonged period. The condition can lead to a wide range of serious health problems, including high blood pressure, diabetes, muscle weakness, bone loss, and cognitive impairment.

Current treatment options are limited, making the FDA's rejection particularly disappointing for the patient community. Relacorilant was designed to be a selective glucocorticoid receptor antagonist that could block cortisol's harmful effects without some of the side effects associated with existing treatments.

Wall Street Reacts

Analysts were quick to reassess their outlooks following the FDA's decision. Truist analyst Joon Lee noted that the agency's request for additional data could require further clinical trials, significantly extending the timeline for any potential approval.

Several firms downgraded their price targets, acknowledging that the path forward for relacorilant in hypercortisolism has become considerably more uncertain.

Key Analyst Takeaways

  • Additional trials may be required, adding years to the development timeline
  • The company's revenue projections for the hypercortisolism indication need to be revised
  • Investor confidence in the regulatory process has been shaken

A Silver Lining in Oncology?

Despite the setback, Corcept still has another major regulatory catalyst on the horizon. The FDA has assigned a PDUFA target action date of July 11, 2026, for relacorilant as a treatment for platinum-resistant ovarian cancer—a separate indication that could still provide a path to market for the drug.

This oncology opportunity may help explain why shares didn't fall even further. Some investors appear to be betting that the cancer indication could eventually validate the drug's commercial potential, even if the hypercortisolism opportunity has been delayed or derailed.

Lessons for Biotech Investors

The Corcept situation offers several important lessons for investors in the pharmaceutical sector:

1. Positive Trial Results Don't Guarantee Approval

Even when clinical trials meet their endpoints, the FDA can still determine that the overall benefit-risk profile doesn't support approval. The agency considers a wide range of factors beyond statistical significance, including the severity of the condition, existing treatment options, and potential safety concerns.

2. Position Sizing Matters

With the potential for binary outcomes, biotech investors need to carefully consider position sizes. A 48% decline in a single day can be catastrophic for portfolios that are overly concentrated in individual names.

3. Regulatory Risk Persists Through the Finish Line

Many investors assumed relacorilant's approval was all but certain given the positive trial data. This serves as a reminder that regulatory risk remains elevated until the FDA actually issues its decision.

What Happens Next

Corcept will need to evaluate its options for the hypercortisolism indication. The company could potentially:

  • Conduct additional clinical trials to generate the evidence the FDA requested
  • Request a meeting with the agency to better understand specific concerns
  • Focus resources on the oncology indication while reassessing the hypercortisolism opportunity

For now, the stock's dramatic decline has reset expectations considerably. Whether Corcept can recover from this setback will depend largely on how the FDA's concerns can be addressed—and whether the ovarian cancer indication can deliver the success that eluded the company in hypercortisolism.

As 2025 draws to a close, Corcept's experience serves as a sobering reminder that in biotech investing, the final word always belongs to the regulators.