CUPERTINO, Calif., Nov. 1 /PRNewswire-FirstCall/ — DURECT Corporation
(Nasdaq: DRRX) announced today financial results for the three months ended
September 30, 2007. Total revenues were $4.9 million for the three months
ended September 30, 2007, compared to $5.1 million for the same period in
2006. Net loss for the three months ended September 30, 2007 was $7.9
million, compared to a net loss of $8.6 million for the same period in 2006.
Cash used in operating activities was $1.0 million for the three months ended
September 30, 2007, compared to $3.1 million in the three months ended
September 30, 2006. At September 30, 2007, we had cash and investments of
$66.6 million, including $1.3 million in restricted investments, compared with
cash and investments of $81.6 million at December 31, 2006. Cash flow in the
third quarter of 2007 and the cash and investments balance at September 30,
2007 reflect the $8.0 million POSIDUR milestone payment from Nycomed that was
recognized as revenue in the second quarter but was received in the third
quarter.
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“Our third quarter efforts focused on advancing our product development
pipeline and improving our balance sheet. Toward that end, we recently
reported positive results from our POSIDUR Phase IIb hernia study, King
Pharmaceuticals and Pain Therapeutics completed enrollment in the Remoxy(TM)
pivotal Phase III trial and Endo initiated their Phase II program with our
TRANSDUR(TM)-Sufentanil patch,” stated James E. Brown, D.V.M., President and
CEO of DURECT. “In addition, we took proactive steps to generate early
conversions of our convertible notes to decrease our outstanding debt and to
meter out the issuance of the underlying shares.”
Recent Company Highlights:
* POSIDUR. In July we announced positive results from a 122 patient
Phase IIb clinical trial in which POSIDUR at a dose of 5 mL
demonstrated statistically significant reductions in post-operative
pain (by approximately 30% versus placebo) and in total consumption of
supplemental opioid analgesic medications (approximately 3x less versus
placebo) in patients undergoing inguinal hernia repair. This Phase IIb
trial was designed to be the study upon which we and our collaborator
Nycomed would base our decision for advancing POSIDUR into Phase III
clinical trials. These successful results triggered an $8 million
milestone payment by Nycomed to DURECT under the parties’ collaborative
agreement. We have held an end-of-Phase II meeting with the U.S. Food
& Drug Administration (FDA) and are in dialogue with the FDA regarding
the Phase III program. Hospira, our manufacturer of POSIDUR, has
produced supplies for ICH stability, validation and Phase III clinical
trials.
POSIDUR is our post-operative pain relief depot that utilizes our
patented SABER(TM) technology to deliver bupivacaine to provide up to
three days of pain relief after surgery. POSIDUR is licensed to Nycomed
for commercialization in Europe and select other countries, and DURECT
has retained commercialization rights in the US, Canada and Asia.
* Remoxy. According to our licensee, Pain Therapeutics, and its
sublicensee, King Pharmaceuticals, the Remoxy Phase III pivotal study
is fully enrolled and top-line results of this study are expected in
the fourth quarter of 2007. This pivotal Phase III trial is being
conducted in accordance with a Special Protocol Assessment (SPA) with
the FDA.
Remoxy is an abuse-resistant long-acting form of oxycodone based on our
ORADUR(TM) technology intended for the treatment of chronic pain.
* TRANSDUR(TM)-Sufentanil. According to its public disclosures, Endo
Pharmaceuticals, our licensee for commercialization in the US and
Canada, commenced its Phase II program in June 2007.
TRANSDUR-Sufentanil is our proprietary transdermal patch intended to
provide sufentanil for a period of up to seven days from a single
application for chronic pain sufferers.
* ELADUR(TM) (TRANSDUR-Bupivacaine). We have completed enrollment of
patients and expect to report results in 2007 from a Phase IIa trial
designed to assess safety as well as the magnitude, duration and
characteristics of analgesic activity of ELADUR in approximately 50
patients with Post-Herpetic Neuralgia (PHN).
ELADUR is our proprietary transdermal patch intended to provide
bupivacaine for a period of up to three days from a single application.
DURECT retains full commercial rights to this drug candidate.
* Reduction in Convertible Notes. We reduced the balance of our
outstanding convertible notes from $37.3 million at June 30, 2007 to
$23.6 million as of October 31, 2007 ($33.1 million at September 30,
2007) by paying a small premium over the future interest payments due
on these notes in order to induce early conversion.
* Inclusion in New NASDAQ(R) Index. Effective September 25, 2007, we
were selected as an inaugural member in the NASDAQ NeuroInsights(R)
Neurotech Index (ticker: NERV). The Neurotech Index tracks the stock
performance of 32 companies which meet certain minimum market criteria
and were identified by NeuroInsights as being significantly involved in
researching, developing, manufacturing and marketing pharmaceuticals,
biologics, medical devices and diagnostics for the brain and nervous
system.
Earnings Conference Call
A live audio webcast of a conference call to discuss third quarter 2007
results will be broadcast live over the internet at 4:30 p.m. Eastern Time and
is available by accessing DURECT’s homepage at www.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 Corporation is an emerging specialty pharmaceutical company
developing pharmaceutical systems based on its proprietary drug delivery
platform technologies. The Company currently has a number of late-stage
pharmaceutical products in development addressing large markets in pain
management, with a number of research programs underway targeting chronic
disease and other therapeutic areas. For more information, please visit
www.www.durect.com.
NOTE: POSIDUR(TM), SABER(TM), ORADUR(TM), TRANSDUR(TM), and ELADUR(TM) are
trademarks of DURECT Corporation. Other referenced trademarks belong to their
respective owners.
DURECT Forward-Looking Statement
The statements in this press release regarding our products in
development, product development plans, anticipated data announcements from
the ELADUR Phase IIa trial and the Remoxy pivotal Phase III trial, discussions
with the FDA and other anticipated regulatory, clinical and development
milestones and timing thereof, future clinical trial results and our intended
emergence as a specialty pharmaceutical company 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, our (and that of our third
party collaborators where applicable) abilities to design, enroll, conduct and
complete clinical trials, complete the design, development, and manufacturing
process development of the product candidate, obtain product and manufacturing
approvals from regulatory agencies, manufacture and commercialize the product
candidate and manage and obtain capital to fund our growth, operations and
expenses. Further information regarding these and other risks is included in
our Form 10-Q filed on August 8, 2007 under the heading “Risk Factors.”
DURECT CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
Collaborative research and
development revenue $2,992 $3,158 $9,858 $10,264
Milestone revenue - - 8,000 -
Product revenue, net 1,940 1,976 6,232 6,189
Total revenues 4,932 5,134 24,090 16,453
Operating expenses:
Cost of revenues (1) 780 666 2,418 2,265
Research and development
(1) 8,858 9,930 28,840 25,643
Selling, general and
administrative (1) 3,135 3,346 10,356 9,540
Amortization of
intangible assets 8 22 23 416
Total operating expenses 12,781 13,964 41,637 37,864
Loss from operations (7,849) (8,830) (17,547) (21,411)
Other income (expense):
Interest and other
income 906 957 2,792 2,841
Interest expense (716) (710) (2,150) (2,719)
Debt conversion expense (223) - (223) (2,287)
Net other income (expense) (33) 247 419 (2,165)
Net loss $(7,882) $(8,583) $(17,128) $(23,576)
Net loss per share, basic
and diluted $(0.11) $(0.12) $(0.25) $(0.36)
Shares used in computing
basic and diluted net loss
per share 69,655 68,688 69,414 64,943
(1) Includes stock-based compensation related to the following:
Cost of revenues 31 $20 $98 $47
Research and development 1,038 774 3,291 2,084
Selling, general and
administrative 497 368 1,720 1,011
Total stock-based
compensation $1,566 $1,162 $5,109 $3,142
DURECT CORPORATION
Condensed Balance Sheet
(in thousands, except per share amounts)
As of As of
September 30, 2007 December 31, 2006 (1)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $36,030 $41,554
Short-term investments 27,314 28,297
Accounts receivable 5,437 2,152
Inventories 2,027 2,052
Prepaid expenses and other
current assets 1,989 1,744
Total current assets 72,797 75,799
Property and equipment, net 7,918 7,451
Goodwill 6,399 6,399
Intangible assets, net 88 111
Long-term investments 1,983 10,472
Restricted Investments 1,283 1,284
Other non-current assets 280 969
Total assets $90,748 $102,485
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $606 $864
Accrued liabilities 7,051 4,522
Contract research liability 1,536 1,624
Interest payable on convertible notes 604 97
Deferred revenue, current portion 5,239 5,348
Equipment financing obligations,
current portion 37 34
Bonds payable, current portion 210 210
Other short-term liabilities 149 -
Convertible subordinated notes
due 2008 33,145 -
Total current liabilities 48,577 12,699
Bond payable and equipment financing
obligations, noncurrent portion 578 606
Convertible subordinated notes due 2008 - 37,337
Deferred revenue, noncurrent portion 10,578 14,507
Other long-term liabilities 780 304
Stockholders' equity 30,235 37,032
Total liabilities and
stockholders' equity $90,748 $102,485
(1) Derived from audited financial statements
SOURCE DURECT Corporation
11/01/2007
CONTACT: Matthew J. Hogan, Chief Financial Officer of DURECT
Corporation, +1-408-777-4936; or Media, Jeremiah Hall, Senior Vice President
of Feinstein Kean Healthcare, +415-677-2700, jeremiah.hall@fkhealth.com, for
DURECT Corporation
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Web site: http://www.www.durect.com