CORT (-14%): Korlym Patent Defeat Unlocks Generic Threat

Corcept Therapeutics, a pharma company focused on cortisol modulation, saw its stock collapse after a negative court ruling. The U.S. Court of Appeals found that Teva’s generic version of Korlym does not infringe on two of Corcept’s patents. The sell-off was immediate and aggressive, gapping down and closing on the lows, reflecting a fundamental threat to its key revenue driver. With a major legal shield broken, is this the beginning of a sustained derating for Corcept?

The sell-off was a direct reaction to a press release issued after market close on February 19, 2026. Corcept announced the United States Court of Appeals for the Federal Circuit affirmed a lower court’s decision, ruling against Corcept in a patent dispute with Teva Pharmaceuticals. This legal defeat removes a major barrier for Teva to launch a generic version of Korlym, Corcept’s primary commercial product for Cushing’s syndrome, creating a significant and near-term risk to its main revenue stream.

• The court found Teva’s generic does not infringe two key patents for Korlym.
• This ruling clears a major legal hurdle for a competing generic product to enter the market.
• The decision introduces substantial uncertainty around the durability of future Korlym sales.

Trade Mechanics & Money Flow

Trade Mechanics: What Happened?

CORT closed at $34.24, a new 52-week low for the stock. This represents a staggering 70% collapse from its 52-week high of approximately $114.22, recorded on March 31, 2025. The price action suggests a violent, high-volume liquidation event typical of a major negative catalyst.

• The stock gapped down significantly at the open, indicating overnight order imbalance.
• Price action closed near the session low, showing a lack of dip-buying and sustained selling pressure.
• The breach of the prior 52-week low likely triggered a cascade of mechanical stop-loss orders.

How Is The Money Flowing?

This move has the clear footprint of institutional deleveraging. The speed and severity of the decline suggest that large, long-term holders were forced to liquidate positions due to the material change in the company’s competitive landscape. There was no evidence of significant support or accumulation on the way down.

• The breakdown was decisive, slicing through any potential support levels without a pause.
• A lack of intraday bounces points to an absence of institutional buyers absorbing the selling.
• This appears to be a fundamental re-assessment of the company’s value, not a retail panic.

Understanding trade mechanics, money flow, and price behavior can give you and edge. See more.

What Next?

FADE. The loss of patent protection for a company’s flagship drug is a significant blow to the long-term thesis. The competitive moat around Korlym has been breached, and future revenue streams are now at risk from generic competition. While the company has other pipeline assets, the uncertainty surrounding its primary cash cow makes it difficult to own here. The next key level to watch is the upcoming earnings call on February 24th. Any guidance that fails to reassure the market on the Korlym franchise could lead to the next leg down, with a technical target near the psychological $30 level.

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