...and first the large city medical centers were a disappointment for sales. It was ugly. Second, the company then pursued the community clinics. Cushing's patients were distributed in a way that wasn't often seen.for a serious rare disease. Third, I remember when some were laughing when I posted a $50 to $60M obtainable market size, that I had overshot.
Remember when we had straight quarters of single digit million dollar sales? (Hey Alan, you're crazy if you think it will even reach $20M!).
With a small market, Corcept isn't going to invest in an expensive patent portfolio. It's just not going to attract large competitors.
Also, I think the use of the independent investigators was a deliberate strategy and takes into account more than avoiding dilution.
1) The university strategy assumes greater failure rates. Belanoff once remarked on a conference call that more clinical trial failure had been expected.
2) Cancer trials have scary odds. Let's face it, the whole cancer program was a surprise. Most of us were in apoplexy when Corcept announced it was going into cancer. I marched into Corcept's HQ and essentially said "Cancer? Really?"
I was surprised that the ovarian and pancreatic trials both came with positive signals.Actually "shock: is a better word. The focus went to those indications rather than others. I still fully expect the cancer trials to experience hiccups. It's simple blackjack. :-}
3) The board and dilution is...complicated? A couple years ago, one of our investor village message board members went to the annual meeting. He addressed the board and asked to bring the trials in-house and accelerate the platform. There were actually a few board members reportedly nodding sympathetic agreement.
4) I would have liked to have seen Relacorilant hit clinical trials earlier - Yeah I agree with this sentiment. Nevertheless, it was a difficult call. There were key questions to answer.
Is Korlym enough (it wasn't)? When did Corcept have enough cash to push relacorilant hard? What obstacles were there?
I remember one thing: relacorilant was supposed behave just like mifepristone without its progesterone blocking problems. It didn't. Luckily...it behaves better. I don't know what was occurring behind the scenes, but yes, I wanted relacorilant to be 1 to 2 years ahead of this schedule. This is the provocative gripe.
5) Patents? Recalling the history, I don't think earlier expenditures in the Cushing's portfolio made sense. Now it does. One of our local biotech patent attorneys examined the Corcept IP and said: it has a portfolio normally seen in companies 10x larger.
6) Corcept is 2/3 biotech and 1/3 blue chip. The CEO has spoken on the call about its old-fashioned approach of patiently growing with your revenues. I have another take. My old math professor was also a top notch poker player. He played the probabilities and said to bluff very infrequently, just enough to keep everyone on their toes. Somehow, I believe Corcept's CEO must be a card player. He is playing the odds.
If it turns out that the clinical trials are mostly successful, then we'll argue he did it wrong. Right now, it's a toss-up. PTSD was not successful enough to pursue, while Cancer is a surprise. This is about the expected failure rates.
7) ALS and Alzheimer's? Even if it takes a long time to market, if there's promise, then it impacts valuation - even from Phase 2 trial results. BTW, it looks possible that CORT113176 exerts short-term improvements on ALS. If so, this begins to validate the entire platform. Right now, observers are just like we were: Cancer? Diabetes? AIWG? Cushing's? Neurological? Really? But the perception changes after a two or three more good results...even if mixed with failure. We need to increase the pipeline...for failure will come.