Knobias Clip Report (9-11-2007)

Submitted from Knobias ClipReport

CORT: Cleared to Begin Phase III Protocol Trial on Corlux

Tuesday’s session saw stocks close higher breaking a two day losing steak following strong August sales number from McDonald’s an reports from General Motors enticing buyers with fewer incentives.

Investors were also optimistic about the Fed’s decision due in one week. The meeting could become one of the largest in recent history for the board of governors especially considering a report by Moody’s investor service noting that the credit crunch had spread and was cutting off access to financing by financially weak and small cap companies. The expected the default rate among this group of speculative grade companies to more than double to 4% during the next year. Crude-oil futures gained 74c to close at $78.23 a barrel, the highest closing level for the front-month contract traded on the New York Mercantile Exchange even after OPEC reportedly agreed to raise production by 500,000 barrels a day, effective Nov. 1.

On the small cap side, biotechnology was, once again, where many traders focused their attention. Corcept Therapeutics Incorporated (CORT) received notification that the FDA has opened the Investigational New Drug application (IND) for Corlux, a cortisol receptor (GR-II) antagonist, for the treatment of Cushing's Syndrome. The FDA indicated that a single study may provide a reasonable basis for the submission of a New Drug Application (NDA) for Corlux for the treatment of Cushing's Syndrome, which allows the Company to initiate a 50-patient open label study defined by the protocol submitted with the application for the IND. Corcept expects to open the trial for enrollment late in the fourth quarter of 2007.

Corlux received orphan drug status from the FDA in July which gives the company enhanced exlusivity rights.

Cushing's Syndrome is a disorder caused by prolonged exposure of the body's tissues to high levels of the hormone cortisol. Sometimes called "hypercortisolism," it is relatively rare and most commonly affects adults aged 20 to 50. Symptoms vary, but most people have high blood sugar, high blood pressure, upper body obesity, rounded face, increased fat around the neck, thinning arms and legs, severe fatigue and weak muscles. Irritability, anxiety and depression are common. Cushing's Syndrome can affect every organ system in the body and be lethal if not treated effectively.

Joseph K. Belanoff, M.D., Corcept's Chief Executive Officer, commented in the press release, "We are pleased that the FDA has allowed us to open our IND for CORLUX for the treatment of Cushing's Syndrome and to initiate the Phase 3 protocol included in the IND submission. We look forward to advancing a potential treatment for this rare illness."

The decision by the FDA effectively allows the Company to only have to subject the candidate to one Phase III trial before submission of the data to the FDA for approval to begin to market.

Following the news, shares spiked to over $6.25 before closing up only 37% at $4.63 on 3.3 million shares traded. Average share volume over the past 20 days had only been in the 120 thousand neighborhood.

Even with the bypass to the Phase III trial, the Company would still have to present enough positive data with Corlux to receive the FDA’s approval. On the other hand, shares could see increased attention if one of the analysts’s covering the stock up its rating on the name. In either event, the name is certainly one to follow over the coming weeks. Investors would be wise to watch.



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