• Total Revenue (2024): $2 million, down from $2.6 million in 2023.
• Q4 Revenue (2024): $0.5 million, compared to $0.9 million in Q4 2023.
• R&D Expense (2024): $10.4 million, down from $29.4 million in 2023.
• Q4 R&D Expense (2024): $1.9 million, compared to $5.6 million in Q4 2023.
• SG&A Expense (2024): $10 million, down from $12.7 million in 2023.
• Q4 SG&A Expense (2024): $2 million, compared to $2.2 million in Q4 2023.
• Cash and Investments (End of 2024): $12 million, down from $29.8 million at the end of 2023.
• Debt Status: Debt-free following the sale of the ALZET product line.

• Warning! GuruFocus has detected 6 Warning Signs with DRRX.

Release Date: March 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Durect Corp (NASDAQ:DRRX) has successfully completed the sale of its ALZET product line, which has strengthened its balance sheet and allowed the company to become debt-free.
• The company is focusing its efforts on developing larsucosterol for alcohol-associated hepatitis, a condition with no approved therapy, showing a strong commitment to addressing unmet medical needs.
• Larsucosterol has shown promising results in Phase IIb trials, with nearly 60% reductions in mortality compared to placebo, garnering significant attention from the medical community.
• The FDA has granted larsucosterol breakthrough therapy designation, highlighting its potential as a significant advancement in treatment.
• Durect Corp (NASDAQ:DRRX) has reduced its R&D and SG&A expenses significantly, reflecting efficient cost management and a streamlined focus on its core projects.

Negative Points

• Total revenues for 2024 decreased to $2 million from $2.6 million in 2023, indicating a decline in financial performance.
• The company experienced lower revenue from earn-out agreements, feasibility agreements, and excipient sales, contributing to the overall revenue decline.
• Cash and investments have decreased significantly from $29.8 million at the end of 2023 to $12 million at the end of 2024, raising concerns about long-term financial sustainability.
• Durect Corp (NASDAQ:DRRX) requires approximately $20 million to fund its Phase III trial for larsucosterol, and it is still exploring funding options, indicating potential financial challenges.
• The company faces uncertainties in securing strategic partnerships or financing through capital markets, which could impact the timeline and success of its clinical development plans.

Q & A Highlights

Q: Can you share the estimated cost for the Phase III trial and the timeline for data availability? A: James Brown, President, Chief Executive Officer, Director, stated that the estimated cost for the Phase III trial is about $20 million, with potential adjustments that might reduce this amount. The timeline for data availability is approximately two years.

Q: Could you elaborate on the variations in time from hospitalization to first dose and its impact on the trial results? A: James Brown explained that time to intervention is crucial in acute conditions like alcohol-associated hepatitis. Norman Sussman, Chief Medical Officer, added that early dosing showed significant effects, as seen in the New England Journal article. Weiqi Lin, Executive Vice President of Research and Development, noted that time to treat was a major factor in the differences observed between US and ex-US patient populations.

Q: Are there any updates on potential strategic partnerships or business development discussions to support the Phase III study? A: Timothy Papp, Chief Financial Officer, mentioned ongoing efforts to explore various possibilities, including strategic partnerships and business development discussions. While specifics and timing cannot be disclosed, the company remains optimistic about finding a solution despite current capital market challenges.

Q: Is there a possibility to conduct a smaller, more rigorous Phase IIb study in the US to confirm larsucosterol's efficacy? A: James Brown indicated that the planned Phase III trial is already designed to be very tight and efficient, focusing on the US market. Conducting another Phase IIb trial would require significant resources and time, making the Phase III trial a more cost-effective and timely approach. Norman Sussman added that the previous trial's results were robust enough to proceed directly to Phase III.

Q: Are there opportunities for nondilutive funding in ex-US countries to generate new data? A: James Brown acknowledged the possibility of conducting regional studies with ex-US partners, which could be beneficial for certain markets that prefer local data. However, the current focus remains on alcohol-associated hepatitis in the US.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.