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DURECT Corporation Announces Fourth Quarter 2012 Financial Results and Update of Programs



DURECT Corporation Announces Fourth Quarter 2012 Financial Results and Update
                                 of Programs

PR Newswire

CUPERTINO, Calif., Feb. 28, 2013

CUPERTINO, Calif., Feb. 28, 2013 /PRNewswire/ -- DURECT Corporation (Nasdaq:
DRRX) announced today financial results for the three months ended December
31, 2012. Total revenues were $3.3 million for the three months ended December
31, 2012 as compared to $8.9 million for the three months ended December 31,
2011.  Net loss was $5.5 million for the three months ended December 31, 2012
as compared to a net loss of $2.1 million for the same period in 2011.    

(Logo: http://photos.prnewswire.com/prnh/20020717/DRRXLOGO)

Total revenues were $53.1 million and net income was $16.2 million for the
year ended December 31, 2012; these figures include the accelerated
recognition in the first quarter of 2012 of $35.4 million in deferred revenue
associated with upfront fees previously received under terminated
collaboration agreements.  This $35.4 million in revenue was non-recurring and
had no cash flow impact for the year. Excluding the accelerated recognition of
deferred revenue, DURECT's reported revenues would have been $17.7 million for
the year ended December 31, 2012 (as compared to $25.9 million for the same
period in 2011 excluding the recognition of deferred revenue associated with
the agreements terminated in 2012) and reported net loss would have been $19.2
million for the year ended December 31, 2012 (as compared to a net loss of
$26.3 million for the same period in 2011 excluding the recognition of
deferred revenue associated with the agreements terminated in 2012). 

At December 31, 2012, we had cash and investments of $28.9 million, compared
to cash and investments of $30.8 million at December 31, 2011.  We have no
debt obligations, other than normal liabilities associated with running our
business.       

"We are in the final stages of preparing a new drug application for POSIDUR^™,
which we expect to submit to the FDA near the end of the first quarter of
2013," stated James E. Brown, D.V.M., President and CEO of DURECT. 
"Communications with Pfizer indicate that they intend to meet with the FDA as
planned in late March to discuss their proposed resubmission plan for
REMOXY^®.  We also are pleased that Zogenix recently reported positive Phase 1
clinical trial results for Relday^™ and has quickly extended that trial at a
higher dose."

In 2013, we look forward to:

  o Pfizer conducting a meeting with the FDA to discuss the REMOXY
    resubmission
  o Submitting the POSIDUR NDA near the end of Q1 2013
  o Supporting Zogenix as they extend a Phase I study with Relday
  o Selecting a formulation based on our Phase I studies to take forward in
    our ORADUR^®-ADHD program
  o Potentially entering into additional feasibility studies and
    collaborations
  o Continuing to add to our patent portfolio

Highlights for DURECT in Fiscal Year 2012 and Major Potential Milestones over
the Next 12-18 Months:

  o REMOXY (oxycodone) Extended-Release Capsules CII.  Pfizer has efforts
    underway to resolve the issues raised in the REMOXY Complete Response
    Letter, which are primarily manufacturing. Pfizer is targeting a meeting
    with the FDA in late March to discuss their proposed resubmission plan for
    REMOXY.   Based on feedback Pfizer receives from the FDA at the meeting,
    Pfizer will subsequently determine the next steps and/or required timing
    to respond to the Complete Response Letter.    
    REMOXY,  an investigational drug, is a unique long acting oral formulation
    of oxycodone intended to treat moderate-to-severe pain when a continuous,
    around the clock opioid analgesic is needed for an extended period of
    time. Based on DURECT's ORADUR technology, which is covered by issued
    patents and pending patent applications owned by us, REMOXY is designed to
    discourage common methods of tampering associated with prescription opioid
    analgesic misuse and abuse.
  o POSIDUR ^ (SABER^®-Bupivacaine) Post-Operative Pain Relief Depot.
    Following our pre-NDA communications during the summer of 2012 with the
    FDA regarding POSIDUR, we intend to submit a new drug application (NDA)
    under 505(b)(2) with the FDA near the end of the first quarter of 2013.

    POSIDUR is our investigational post-operative pain relief depot that
    utilizes our patented SABER technology to deliver bupivacaine to provide
    up to three days of pain relief after surgery.  We are in discussions with
    potential partners regarding licensing development and commercialization
    rights to POSIDUR, for which we hold worldwide rights.  
  o Transdermal Development Candidates.   DURECT has two transdermal products
    that are in mid- to late-stage development with features that may be
    superior to currently available patches.  TRANSDUR^®-Sufentanil  is our
    proprietary transdermal patch intended to deliver sufentanil to chronic
    pain sufferers for a period of up to 7 days from a single application;
    this compares favorably against existing fentanyl patches which are
    substantially larger and typically effective for 2-3 days.  ELADUR^®, for
    topical neuropathic conditions such as post-herpetic neuralgia (PHN), is
    our proprietary transdermal patch intended to deliver bupivacaine for a
    period of up to three days from a single application; existing lidocaine
    patches for this condition can be worn for 12 hours with a rest period of
    12 hours during which time many patients experience breakthrough pain.  We
    are in discussions with potential partners regarding licensing development
    and commercialization rights to these two transdermal programs for which
    we hold worldwide rights.
  o ORADUR-ADHD Program.  We are developing a drug candidate (ORADUR-ADHD)
    based on DURECT's ORADUR Technology for the treatment of Attention Deficit
    Hyperactivity Disorder. This drug candidate is intended to provide
    once-a-day dosing with added tamper resistant characteristics to address
    common methods of abuse and misuse of these types of drugs.  We and Orient
    Pharma have completed several Phase I pharmacokinetic studies with
    multiple formulations, and we are continuing to optimize our lead
    formulations.  Orient Pharma is our licensee for certain Asian and South
    Pacific countries, while we retain the rights to the rest of the world.
  o Relday (Risperidone Program).  In July 2011, we signed a development and
    license agreement with Zogenix to develop Relday, a product candidate
    targeting the antipsychotic market.  In January 2013, Zogenix announced
    positive single-dose pharmacokinetic (PK) results from the Phase 1
    clinical trial of Relday.  According to Zogenix, adverse events in the
    Phase 1 trial in patients diagnosed with schizophrenia were generally mild
    to moderate and consistent with other risperidone products. The Phase 1
    clinical trial for Relday was conducted as a single-center, open-label,
    safety and PK trial of 30 patients with chronic, stable schizophrenia or
    schizoaffective disorder.  Per Zogenix, based on the favorable safety and
    PK profile demonstrated with the 25 mg and 50 mg once-monthly doses tested
    in the Phase 1 trial, Zogenix has extended the study to include a 100 mg
    dose of the same formulation. The addition of this dose arm to the study
    will enable evaluation of dose proportionality across the full dose range
    that would be anticipated to be used in clinical practice.  Zogenix
    expects to complete the extension of the Phase 1 clinical trial during the
    second quarter of 2013.

    Relday is a proprietary, long-acting (once-monthly) subcutaneous
    injectable formulation of risperidone using DURECT's SABER
    controlled-release formulation technology.  An existing long-acting
    injectable risperidone product, which achieved $1.4 billion in global net
    sales in 2012, requires twice-monthly, intramuscular injections and drug
    reconstitution prior to use. 
  o Feasibility Projects and Other Activities.  During the fourth quarter of
    2012, we continued work on several feasibility projects and signed new
    projects as a means of demonstrating that our technologies can achieve the
    drug delivery objectives set forth by our collaborators and are worthy of
    further development.  The Zogenix program, described above, was one such
    project which has matured into a development and license agreement.
  o Patent Issuances.   In 2012, we had multiple important patents issue in
    the U.S. and other important commercial markets.  In addition to these
    issuances, we continue to file new applications protecting our
    technologies and programs, and are pursuing existing applications which
    may extend the patent life of several key programs.  Reflecting key
    issuances since January 1, 2012, our patent portfolio now includes:

       o REMOXY.  In the U.S., REMOXY is now covered by four patent families.
         Two patent families include granted patents expiring in at least 2015
         and 2025, respectively. The later expiring of these two patent
         families includes five granted patents.  In Europe, REMOXY is covered
         by two granted patents expiring in at least 2016 and 2023,
         respectively.
       o POSIDUR. In the U.S., POSIDUR is now covered by two patent families,
         which include granted patents expiring in at least 2015 and 2025,
         respectively. In Europe, POSIDUR is covered by two granted patents
         expiring in at least 2016 and 2025, respectively.
       o ELADUR.   In the U.S., we received issuance of a patent expiring in
         2031 and in Europe we also received issuance of a patent expiring in
         at least 2027. 
       o TRANSDUR-Sufentanil.  In the U.S., we received issuance of three
         patents with coverage until at least 2025 and in Europe, we also
         received issuance of a patent with coverage until at least 2025.

  o Financial Guidance.  Our net cash consumption is influenced by the timing
    and structure of new corporate collaborations, the achievement of
    milestones under existing collaborations, and the extent to which we
    choose to fund unpartnered programs.  While we anticipate entering into
    new collaborations in the future, assuming current funding plans for our
    R&D programs without funding from new collaborations or milestone
    payments, we currently anticipate our net cash consumption in 2013 will be
    approximately $14-16 million.
  o Business Development Activities.  We have multiple programs that may
    potentially be licensed over the next 12-18 months.  These include 
    POSIDUR, TRANSDUR-Sufentanil, ELADUR, ORADUR-ADHD (territories outside
    certain Asian and South Pacific markets), as well as various other
    programs which we have not described publicly in detail.

Earnings Conference Call
A live audio webcast of a conference call to discuss fourth quarter 2012
results will be broadcast live over the internet at 4:30 p.m. Eastern Time on
February 28 and is available by accessing DURECT's homepage at www.durect.com
and clicking "Investor Relations." If you are unable to participate during the
live webcast, the call will be archived on DURECT's website under Audio
Archive in the "Investor Relations" section.

About DURECT Corporation

DURECT is a specialty pharmaceutical company developing innovative drugs for
pain and chronic diseases, with late-stage development programs including
REMOXY^®, POSIDUR^™, ELADUR^®, and TRANSDUR^®-Sufentanil.  DURECT's
proprietary oral, transdermal and injectable depot delivery technologies
enable new indications and superior clinical/commercial attributes such as
abuse deterrence, improved convenience, compliance, efficacy and safety for
small molecule and biologic drugs.  For more information, please visit
www.durect.com.

NOTE: POSIDUR^™, SABER^®, ORADUR^®, TRANSDUR^® and ELADUR^® are trademarks of
DURECT Corporation. Other referenced trademarks belong to their respective
owners.  REMOXY, POSIDUR, ELADUR, TRANSDUR-Sufentanil and Relday are drug
candidates under development and have not been approved for commercialization
by the U.S. Food and Drug Administration or other health authorities.

DURECT Forward-Looking Statement

The statements in this press release regarding the potential regulatory
meetings and submissions for REMOXY and POSIDUR, anticipated clinical trials
(including timing and results) for Relday and our other drug candidates,
projected cash consumption, the potential benefits and uses of our drug
candidates, collaborations with third parties and potential business
development activities are forward-looking statements involving risks and
uncertainties that can cause actual results to differ materially from those in
such forward-looking statements. Potential risks and uncertainties include,
but are not limited to, the risk that Pfizer will discontinue development of
REMOXY, the risk of adverse decisions by regulatory agencies, including
rejection of meeting requests, requests for additional information or product
non-approval or non-acceptance of our POSIDUR or other NDA submissions, delays
and additional costs due to requirements imposed by regulatory agencies,
potential adverse effects arising from the testing or use of our drug
candidates, the potential failure of our clinical trials to meet their
intended endpoints, our potential failure to maintain our collaborative
agreements with third parties or consummate new collaborations and risks
related to our (and our third party collaborators where applicable) ability to
design, enroll, conduct and complete clinical trials, complete the design,
development, and manufacturing process development of product candidates,
manufacture and commercialize product candidates, obtain marketplace
acceptance of product candidates, avoid infringing patents held by other
parties and secure and defend patents of our own, and manage and obtain
capital to fund operations and expenses. Further information regarding these
and other risks is included in DURECT's Form 10-Q on November 6, 2012 under
the heading "Risk Factors."

 

DURECT CORPORATION

 
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) 
(in thousands, except per share amounts)
(unaudited)
                                  Three months ended    Year ended
                                   December 31,          December 31, 
                                  2012       2011       2012       2011^(1)
Collaborative research and        $    813   $ 6,454    $42,494    $ 22,360
development and other revenue
Product revenue, net              2,449      2,481      10,576     11,127
    Total revenues                3,262      8,935      53,070     33,487
Operating expenses:
    Cost of product revenues^     1,038      927        4,654      4,713
    Research and development      4,904      7,013      20,265     34,053
    Selling, general and          2,911      3,154      12,095     13,574
    administrative^ 
Total operating expenses          8,853      11,094     37,014     52,340
Income (loss) from operations     (5,591)    (2,159)    16,056     (18,853)
Other income (expense):
    Interest and other income     95         25         151        134
    Interest and other expense    (2)        (4)        (7)        (46)
Net other income                  93         21         144        88
Net Income (loss)                 $(5,498)   $(2,138)   $16,200    $(18,765)
Net income (loss) per share
    Basic                         $  (0.06)  $  (0.02)  $    0.18  $    (0.21)
    Diluted                       $  (0.06)  $  (0.02)  $    0.18  $    (0.21)
Weighted-average shares used in
computing net income (loss) per
share
    Basic                         90,881     87,514     88,433     87,410
    Diluted                       90,881     87,514     88,589     87,410
Total comprehensive income (loss) $(5,498)   $(2,144)   $16,201    $(18,766)
    (1)  Derived from audited financial statements.

 

DURECT CORPORATION
BALANCE SHEET DATA
(in thousands)
                                      As of              As of
                                      December 31, 2012  December 31, 2011^(1)
                                      (unaudited)
ASSETS
Current assets:
   Cash and cash equivalents          $ 11,195           $ 8,896
   Short-term investments             17,337             19,535
   Short-term restricted investments  -                  367
   Accounts receivable                2,166              3,448
   Inventories                        3,399              3,252
   Prepaid expenses and other current 2,258              1,803
assets
Total current assets                  36,355             37,301
Property and equipment, net           2,457              3,124
Goodwill                              6,399              6,399
Intangible assets, net                36                 53
Long-term investments                 -                  1,530
Long-term restricted Investments      400                501
Other long-term assets                288                288
Total assets                          $ 45,935           $ 49,196
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                   $ 1,785            $ 1,274
   Accrued liabilities                3,997              4,884
   Contract research liability        483                1,361
   Deferred revenue, current portion  662                7,372
Total current liabilities             6,927              14,891
Deferred revenue, noncurrent portion  1,480              30,090
Other long-term liabilities           1,197              738
Stockholders' equity                  36,331             3,477
Total liabilities and stockholders'   $ 45,935           $ 49,196
equity
(1) Derived from audited financial
statements.

 

SOURCE DURECT Corporation

Website: http://www.durect.com
Contact: Matt Hogan, Chief Financial Officer, DURECT Corporation,
+1-408-777-4936
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