Durect Corporation Stock Earnings Reports

• R&D Expenses: Decreased significantly to $2.2 million from $7.2 million, attributed to lower clinical trial costs and employee-related expenses.
• SG&A Expenses: Reduced to $3.2 million from $3.8 million, reflecting lower employee, professional service, and legal expenses.
• Cash Position: As of September 30, 2024, cash and investments amounted to $10.5 million, with a cash burn of $5.3 million in Q3. Current funds are projected to sustain operations through Q1 2025.

Business Updates:

• POSIMIR Licensing Agreement: Termination of the licensing agreement with Innocoll, with no expected significant financial impact due to lack of recent royalties.
• Larsucosterol Phase 3 Trial:
  • Focus on initiating a confirmatory Phase 3 clinical trial for larsucosterol in treating alcohol-associated hepatitis (AH).
  • Positive dialogue with the FDA, significant discussions held regarding the trial design.
  • Trial Structure: Randomized, double-blind, placebo-controlled, involving approximately 200 patients in the U.S.
  • Treatment has shown promising results in previous trials, with a nearly 60% reduction in mortality noted in U.S. patients.
  • There is confidence in the potential approval of larsucosterol as it addresses a critical unmet medical need in AH—a condition associated with high morbidity and significant healthcare costs.

Market Potential:

• AH leads to over 160,000 hospitalizations annually in the U.S., with a 90-day mortality rate of around 30%. Larsucosterol could significantly impact patient lives and also offer cost savings for healthcare systems.

Funding and Cost Estimates:

• The estimated cost for the Phase 3 trial ranges between $20 million to $25 million, with additional general and administrative expenses anticipated.

Conclusion:

• DURECT is in a preparatory phase for a significant clinical trial, with caution towards funding and a commitment to bringing an important treatment to market. The company is focusing on stabilizing finances while addressing the urgent healthcare need presented by AH.
• Investors should closely monitor the funding status and progress of the Phase 3 trial as these developments will be crucial for the company's future performance and market position.