CORT Plunges 50% on FDA Rejection: A Regulatory Storm Unleashes Market Panic

Summary
• Corcept Therapeutics (CORT) slumps 50.99% intraday, trading at $34.41 amid a $32.99–$39.00 range.
• FDA issues Complete Response Letter for relacorilant, demanding additional efficacy data.
• Turnover surges to 15.57 million shares, reflecting extreme volatility.

Corcept Therapeutics faces a seismic shift as the FDA’s rejection of its flagship drug application triggers a catastrophic sell-off. The stock’s 50% collapse underscores the fragility of biotech valuations in the face of regulatory uncertainty. With relacorilant’s future in limbo and the company’s 52-week low now breached, investors are recalibrating risk exposure in a sector where clinical outcomes dictate market fate.

FDA's CRL Sparks Immediate Sell-Off
The U.S. Food and Drug Administration’s rejection of Corcept’s New Drug Application for relacorilant—a hormone-blocking therapy for hypercortisolism—ignited a liquidity crisis. Despite the GRACE and GRADIENT trials meeting primary endpoints, the FDA demanded additional evidence of efficacy, citing an unresolved benefit-risk profile. CEO Joseph Belanoff’s admission of surprise and disappointment failed to reassure investors, who priced in a near-total erosion of near-term commercial potential. The stock’s collapse from $70.19 to $34.41 reflects a market consensus that the drug’s path to approval is now fraught with delays and uncertainty.

Pharma Sector Steadies as CORT Bears the Brunt
While the broader pharmaceutical sector remains resilient—led by Johnson & Johnson’s 0.17% intraday gain—Corcept’s 50% drop highlights the sector’s vulnerability to single-product dependency. Unlike diversified peers, CORT’s valuation was heavily tied to relacorilant’s regulatory milestones. The FDA’s decision has isolated CORT as a cautionary tale, contrasting with the sector’s focus on pipeline diversification and stable revenue streams.

Options and ETFs in a Volatile Playbook
• RSI: 31.65 (oversold)
• MACD: -0.24 (bearish divergence)
• Bollinger Bands: $75.51–$90.60 (price at lower band)
• 200D MA: $74.04 (below current price)

Technical indicators confirm a short-term bearish bias, with CORT trading near its 52-week low. The RSI’s oversold reading suggests potential for a rebound, but the MACD’s bearish crossover and Bollinger Band compression indicate a high probability of continued downward pressure. For traders, the focus shifts to options with high leverage and liquidity to capitalize on volatility.

Top Options Picks:
• CORT20260116P35 (Put):
- Strike: $35, Expiry: 2026-01-16
- IV: 65.95% (elevated volatility)
- Delta: -0.526 (moderate sensitivity)
- Theta: -0.0075 (slow time decay)
- Gamma: 0.0816 (high sensitivity to price swings)
- Turnover: 309,917 (liquid)
- Leverage Ratio: 14.77% (high reward potential)
- Payoff: $0.50 per 5% downside (from $34.41 to $32.69)
- Why: This put offers asymmetric upside with high gamma to amplify gains if CORT breaks below $35.

• CORT20260220P35 (Put):
- Strike: $35, Expiry: 2026-02-20
- IV: 62.34% (moderate volatility)
- Delta: -0.479 (balanced sensitivity)
- Theta: -0.015 (moderate time decay)
- Gamma: 0.0494 (responsive to price shifts)
- Turnover: 1,762,171 (extremely liquid)
- Leverage Ratio: 9.76% (reasonable risk-reward)
- Payoff: $0.50 per 5% downside (from $34.41 to $32.69)
- Why: The longer-dated put provides more time for the stock to decline, with high turnover ensuring execution ease.

Action: Aggressive bears should prioritize CORT20260116P35 for short-term volatility, while CORT20260220P35 suits a more conservative, time-insensitive approach. Both contracts align with the stock’s technical breakdown and regulatory headwinds.

Backtest Corcept Therapeutics Stock Performance
The performance of CORT after a -51% intraday plunge from 2022 to now has shown positive returns, with the 3-Day win rate at 58.62%, the 10-Day win rate at 59.15%, and the 30-Day win rate at 67.11%. The maximum return during the backtest was 14.78%, indicating that while there was some volatility, CORT has shown the ability to recover from significant drops.

CORT at Crossroads: Navigate the Bearish Outlook with Precision
Corcept’s 50% collapse signals a critical inflection point. The stock’s technical structure—oversold RSI, bearish MACD, and compressed Bollinger Bands—suggests further downside until the FDA’s next guidance. Investors must monitor the $32.99 support level and the CEO’s roadmap for resubmission. Meanwhile, sector leader Johnson & Johnson’s 0.17% gain underscores the importance of diversified exposure. For CORT, the path forward hinges on regulatory dialogue and relacorilant’s data repackage. Act now: Short-side options and cash-secured puts offer the most compelling risk-reward, but only if $32.99 holds as a psychological floor.