Based on our financial results in the first half of 2007, the receipt of an $8.0 million milestone payment from Nycomed and a reexamination of anticipated financial results in the second half of 2007, we are now providing revised financial guidance for cash burn in 2007 of approximately $25-27 million as compared to prior guidance of $32-36 million. This reforecast continues to assume no major new collaborations during 2007, although we are pursuing potential collaborations on multiple fronts including ELADUR, TRANSDUR-Sufentanil for Europe and Asia, POSIDUR for Asia, as well as various other programs.
"Our development programs continued to progress in the second quarter of this year, as evidenced by positive results from our POSIDUR Phase IIb hernia study, completion of enrollment in the Remoxy(TM) pivotal Phase III trial and the initiation by Endo of their Phase II program with our TRANSDUR(TM)- Sufentanil patch," stated James E. Brown, D.V.M., President and CEO of DURECT. "We expect further clinical developments in the second half of 2007 with respect to POSIDUR, Remoxy and ELADUR."
Recent Company Highlights:
- POSIDUR. We recently 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 scheduled an end-of-Phase II meeting
with the U.S. Food & Drug Administration (FDA).
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
Remoxy. According to Pain Therapeutics and King Pharmaceuticals, the
Remoxy Phase III pivotal study is now fully enrolled and top-line
results of this study are expected in the fourth quarter of 2007.
Remoxy, an abuse-resistant long-acting form of oxycodone based on our
ORADUR(TM) technology intended for the treatment of chronic pain, is
currently in a pivotal Phase III trial in accordance with a Special
Protocol Assessment (SPA) with the FDA. Remoxy is licensed to Pain
Therapeutics, which has in turn sublicensed commercialization rights
to King Pharmaceuticals.
TRANSDUR(TM)-Sufentanil. According to its public disclosures, Endo
Pharmaceuticals 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. TRANSDUR-Sufentanil is
licensed to Endo for commercialization in the US and Canada, and
DURECT has retained commercialization rights for the rest of the
ELADUR(TM) (TRANSDUR-Bupivacaine). We are enrolling patients and
expect to report data 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
Earnings Conference Call
A live audio webcast of a conference call to discuss second 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.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.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, our intended end-of-Phase II meeting with the FDA and other anticipated regulatory, clinical and development milestones and timing thereof, future clinical trial results, our intended emergence as a specialty pharmaceutical company and anticipated 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, 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 May 9, 2007 under the heading "Risk Factors."
DURECT CORPORATION CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Three months ended Six months ended June 30, June 30, 2007 2006 2007 2006 Collaborative research and development revenue $3,408 $4,048 $6,866 $7,106 Milestone revenue 8,000 -- 8,000 -- Product revenue, net 2,024 2,060 4,292 4,213 Total revenues 13,432 6,108 19,158 11,319 Operating expenses: Cost of revenues (1) 778 770 1,638 1,599 Research and development (1) 9,630 8,549 19,982 15,713 Selling, general and administrative (1) 3,683 3,189 7,221 6,194 Amortization of intangible assets 8 94 15 394 Total operating expenses 14,099 12,602 28,856 23,900 Loss from operations (667) (6,494) (9,698) (12,581) Other income (expense): Interest and other income 908 978 1,886 1,884 Interest expense (720) (932) (1,434) (2,009) Debt conversion expense -- (2,287) -- (2,287) Net other income (expense) 188 (2,241) 452 (2,412) Net loss $(479) $(8,735) $(9,246) $(14,993) Net loss per share, basic and diluted $(0.01) $(0.14) $(0.13) $(0.24) Shares used in computing basic and diluted net loss per share 69,364 64,207 69,298 63,040 (1) Includes stock-based compensation related to the following: Cost of revenues 33 $18 $67 $26 Research and development 1,097 697 2,253 1,311 Selling, general and administrative 555 323 1,223 644 Total stock-based compensation $1,685 $1,038 $3,543 $1,981 DURECT CORPORATION CONDENSED BALANCE SHEETS (in thousands) As of As of June 30, 2007 December 31, 2006 (1) (unaudited) ASSETS Current assets: Cash and cash equivalents $32,231 $41,554 Short-term investments 29,342 28,297 Accounts receivable 11,658 2,152 Inventories 2,039 2,052 Prepaid expenses and other current assets 2,054 1,744 Total current assets 77,324 75,799 Property and equipment, net 7,769 7,451 Goodwill 6,399 6,399 Intangible assets, net 96 111 Long-term investments 2,947 10,472 Restricted Investments 1,284 1,284 Other non-current assets 740 969 Total assets $96,559 $102,485 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,123 $864 Accrued liabilities 5,210 4,522 Contract research liability 2,168 1,624 Interest payable on convertible notes 97 97 Deferred revenue, current portion 5,324 5,348 Equipment financing obligations, current portion 36 34 Bonds payable, current portion 210 210 Other short-term liabilities 141 -- Total current liabilities 14,309 12,699 Bond payable and equipment financing obligations, noncurrent portion 587 606 Convertible subordinated notes due 2008 37,337 37,337 Deferred revenue, noncurrent portion 11,887 14,507 Other long-term liabilities 498 304 Stockholders' equity 31,941 37,032 Total liabilities and stockholders' equity $96,559 $102,485 (1) Derived from audited financial statements.
SOURCE DURECT Corporation
Matthew J. Hogan,
Chief Financial Officer
of DURECT Corporation,
Senior Vice President of Feinstein Kean Healthcare,
for DURECT Corporation