CUPERTINO, Calif., Nov. 12 /PRNewswire-FirstCall/ —
DURECT Corporation (Nasdaq: DRRX) announced today financial results for the
three months ended September 30, 2002.
(Photo: http://www.newscom.com/cgi-bin/prnh/20020717/DRRXLOGO )
DURECT’s net loss for the three months ended September 30, 2002 was
$9.1 million or 19 cents per share, compared to $8.9 million or 19 cents per
share for the same period in 2001. DURECT’s results for the three months
ended September 30, 2002 included non-cash charges for the amortization of
intangible assets and stock-based compensation of $688,000, compared to
$1.3 million for the same period in 2001.
“Yesterday we achieved a major milestone at DURECT with the agreement with
Endo Pharmaceuticals to collaborate on the development and commercialization
of our CHRONOGESIC(TM) product for the U.S. and Canada,” stated
Dr. James Brown, President and Chief Executive Officer of DURECT. “We
selected Endo as our partner because of their strong commitment to be a
focused leader in the pain field. They have built a team of sales and
marketing executives with established track records for successfully launching
new pharmaceutical products. We have developed a great relationship between
the two organizations and are confident that together with Endo we will add
substantial value for patients and shareholders of both our companies.”
“Today we also announced that we amended our development and
commercialization agreement with ALZA Corporation under which DURECT holds
exclusive rights to develop, commercialize and manufacture products using
ALZA’s patented DUROS(R) technology in selected fields of use,” stated
Dr. Felix Theeuwes, Chairman and Chief Scientific Officer of DURECT. “Under
the amended agreement, DURECT’s maintenance of exclusivity in our licensed
fields is no longer subject to minimum annual requirements for development
spending or the number of products we have under development. These changes
to the agreement align more closely the interests of DURECT and ALZA and
further strengthen the collaboration between the two companies. We are
focused on making progress on all of our development programs. We continue to
look for opportunities to collaborate with other biotech and pharmaceutical
companies to develop and commercialize innovative pharmaceutical system
products utilizing our platform drug delivery technologies in the areas of
chronic diseases.”
Research and development expenses were $7.6 million in the three months
ended September 30, 2002, compared to $7.2 million for the same period in
2001. The increase was primarily attributable to expanded research and
development activities, especially related to initiation of the company’s
pivotal Phase III clinical trial for its lead product, CHRONOGESIC in
June 2002. The clinical trials are temporarily on hold pending agreement
between DURECT and the Food and Drug Administration (FDA) regarding additional
monitoring and data collection. These protocol changes requested by the FDA
were not in relation to any observed safety issue or adverse event.
Independent from the adjustments to the protocol, DURECT is implementing some
necessary design and manufacturing enhancements to the CHRONOGESIC product.
DURECT anticipates that the changes to the existing clinical protocol, and the
implementation of these design and manufacturing enhancements, will delay the
restart of clinical trials until the second half of 2003. The increase in
research and development expenses was also attributable to continued research
and development of other pharmaceutical systems based on SABER and DURIN
technologies.
Selling, general and administrative expenses were $2.2 million in the
three months ended September 30, 2002, compared to $2.3 million for the same
period in 2001. The slight decrease was primarily due to cost efficiency
achieved in existing corporate infrastructure.
At September 30, 2002, DURECT had cash, cash equivalents and investments
of $52.0 million, including $2.9 million in restricted investments.
DURECT expects its net loss for the fourth quarter of 2002 to be in the
range of $9.0 million to $9.5 million or 19 to 20 cents per share. DURECT’s
estimates include non-cash charges for the amortization of intangible assets
and stock-based compensation of approximately $600,000 for the fourth quarter
of 2002.
DURECT expects its net loss will range from $27.0 million to $29.0 million
or 54 to 58 cents per share for the fiscal year of 2003. DURECT’s estimates
include non-cash charges for the amortization of intangible assets,
stock-based compensation and depreciation of approximately $4.0 million for
the year of 2003. Total cash burn for 2003 is expected to be in the range of
$23.0 million to $25.0 million.
DURECT Corporation (www.www.durect.com) is pioneering the development and
commercialization of pharmaceutical systems for the treatment of chronic
debilitating diseases and enabling biotechnology-based pharmaceutical
products. DURECT’s goal is to deliver the right drug to the right site in the
right amount at the right time. In November 2001, DURECT completed a pilot
phase III program for the CHRONOGESIC(TM) (sufentanil) Pain Therapy System, a
3-month product for the treatment of chronic pain. DURECT owns three
proprietary drug delivery platform technologies, including the SABER(TM)
Delivery System (a patented and versatile depot injectable useful for protein
delivery), the MICRODUR(TM) Biodegradable Microparticulates (microspheres
injectable system) and the DURIN(TM) Biodegradable Implant (drug-loaded
implant system).
NOTE:
CHRONOGESIC(TM) is a trademark of DURECT Corporation. SABER(TM),
MICRODUR(TM) and DURIN(TM) are trademarks of Southern BioSystems, Inc., a
wholly owned subsidiary of DURECT Corporation. Other trademarks referred to
belong to their respective owners.
The statements in this press release regarding DURECT’s products in
development and product development plans and projected financial results, 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, DURECT’s ability to complete the design, development, and manufacturing
process development of its products, manufacture and commercialize its
products, obtain product and manufacturing approvals from regulatory agencies,
manage its growth and expenses, finance its activities and operations, as well
as marketplace acceptance of DURECT’s products. Further information regarding
these and other risks is included in DURECT’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2001 filed with the SEC on March 28, 2002,
and other periodic reports filed with the SEC under the heading “Factors that
may affect future results.”
CHRONOGESIC is under development by DURECT and has not been submitted or
approved for commercialization by the US Food and Drug Administration or other
health authorities.
DURECT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue, net $1,783 $1,841 $5,179 $4,928
Cost of goods
sold (1) 721 963 2,285 2,548
Gross profit 1,062 878 2,894 2,380
Operating expenses:
Research and
development 7,571 7,206 23,744 16,680
Selling, general
and administrative 2,225 2,305 6,989 6,339
Amortization of
intangible assets 335 555 1,005 1,290
Stock-based
compensation (1) 338 750 1,375 2,605
Acquired in-process
research and
development -- -- -- 14,030
Total operating
expenses 10,469 10,816 33,113 40,944
Loss from operations (9,407) (9,938) (30,219) (38,564)
Other income (expense):
Interest income 428 1,096 1,737 3,960
Interest expense (71) (92) (232) (238)
Net other income 357 1,004 1,505 3,722
Net loss $(9,050) $(8,934) $(28,714) $(34,842)
Net loss per share,
basic and diluted $(0.19) $(0.19) $(0.60) $(0.76)
Shares used in
computing basic
and diluted net
loss per share 48,161 46,906 48,006 46,120
(1) Stock-based
compensation
related to the
following:
Cost of goods sold $15 $31 $61 $118
Research and
development 219 503 943 1,798
Selling, general and
administrative 119 247 432 807
Total stock-based
compensation $353 $781 $1,436 $2,723
DURECT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sept. 30, Dec. 31,
2002 2001 (1)
(unaudited)
Assets
Current assets:
Cash, cash equivalents and short-term
investments $45,511 $55,204
Inventories and other current assets 3,914 5,007
Total current assets 49,425 60,211
Property and equipment, net 12,242 13,136
Goodwill 4,716 4,716
Intangible assets, net 4,456 5,462
Long-term investments and other
non-current assets 6,514 21,418
Total assets $77,353 $104,943
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $5,116 $5,065
Long-term obligations, current portion 643 683
Total current liabilities 5,759 5,748
Long-term obligations, noncurrent portion 1,848 2,147
Stockholders' equity 69,746 97,048
Total liabilities and stockholders' equity $77,353 $104,943
(1) Derived from audited financial statements.
SOURCE:
DURECT Corporation
CONTACT:
Schond L. Greenway, Senior Director, Investor Relations and
Strategic Planning of DURECT Corporation, +1-408-777-1417, or
schond.greenway@durect.com/
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