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DURECT Corporation Reports Fourth Quarter and Full Year 2021 Financial Results and Update of Programs


- Webcast of Earnings Call Today, March 7th at 4:30 p.m. ET
- Dosed first patient in Europe in the AHFIRM trial
- Signed a licensing agreement for POSIMIR® for up to $136M

CUPERTINO, Calif., March 7, 2022 /PRNewswire/ -- DURECT Corporation (Nasdaq: DRRX) today announced financial results for the three months and year ended December 31, 2021 and provided a corporate update.

"We are pleased with the progress made over the past few months in the larsucosterol (DUR-928) AHFIRM trial, including opening international sites and the enrollment rate of patients with severe alcohol-associated hepatitis (AH)," stated James E. Brown, D.V.M., President and CEO of DURECT.  "We also signed a U.S. licensing agreement for POSIMIR® with Innocoll Pharmaceuticals and look forward to their anticipated launch in the second quarter of 2022."

Fourth Quarter and Recent Business Highlights:

  • Continued progress in AHFIRM enrollmentDURECT has now dosed over 100 patients in the Phase 2b AHFIRM clinical trial of larsucosterol in severe AH. This includes dosing the first patient in Europe, with 51 global AHFIRM study sites now open, an increase of 15 since our last earnings call. With this progress, our estimated completion of enrollment remains on track for mid-2023.
  • Successful completion of POSIMIR licensingDURECT signed an exclusive U.S. licensing agreement for POSIMIR® with Innocoll Pharmaceuticals in late 2021. Under the agreement, DURECT will earn low to mid double-digit royalties from net sales of POSIMIR and is eligible to receive up to $136 million in upfronts and milestones, including the $4 million upfront license fee received in January 2022, and a $2 million milestone payment upon the first commercial sale of POSIMIR, which is anticipated in 2Q22.
  • Increasing awareness of AH market potential – In collaboration with DURECT, Dr. Suthat Liangpunsakul presented a poster at The Liver Meeting® 2021 showing increased hospitalizations for AH in the U.S., highlighting both significant comorbidities and high hospitalization costs of over $150,000 per hospitalization for those AH patients who died during their hospital stay.
  • Important addition to our team – In December 2021, DURECT strengthened its board of directors with the appointment of Pete Garcia, a seasoned financial executive in the biopharmaceutical industry.

Financial highlights for Q4 and full year 2021:

  • Total revenues were $7.3 million and net loss from continuing operations was $7.0 million for the three months ended December 31, 2021 compared to total revenues of $2.2 million and net loss from continuing operations of $8.8 million for the three months ended December 31, 2020. Total revenues were $14.0 million and net loss from continuing operations was $36.3 million for the year ended December 31, 2021, compared to total revenues of $30.1 million and net loss from continuing operations of $14.3 million for the year ended December 31, 2020.
  • At December 31, 2021, cash and investments were $70.0 million, compared to cash, cash held in escrow and investments of $56.9 million at December 31, 2020. Debt at December 31, 2021 was $20.6 million, compared to $20.8 million at December 31, 2020. At December 31, 2021, accounts receivable included $5.3 million due from Innocoll as a result of the $4 million upfront fee and a $1.3 million fee primarily to cover manufacturing supplies and excipients and certain equipment transferred to Innocoll; these funds were received in January 2022.

Upcoming Key Milestones:

  • Complete opening of 60 or more global clinical trial sites across the U.S., E.U., U.K., and Australia and continue acceleration of enrollment in the Phase 2b AHFIRM trial of larsucosterol in severe AH
  • Provide an update on plans to expand clinical development of larsucosterol in NASH and/or other indications
  • Commercial launch of POSIMIR by our licensee, Innocoll Pharmaceuticals; expected in Q2 2022

Earnings Conference Call

We will host a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss fourth quarter 2021 results and provide a corporate update:

Monday, March 7 @ 4:30pm Eastern Time / 1:30 p.m. Pacific Time

Toll Free:   

877-869-3847

International: 

201-689-8261

Conference ID:

13727525

Webcast:

https://themediaframe.com/mediaframe/webcast.html?webcastid=qrEvoVo0

A live audio webcast of the presentation will be also available by accessing DURECT's homepage at www.durect.com and clicking "Investors." If you are unable to participate during the live webcast, the call will be archived on DURECT's website under "Event Calendar" in the "Investors" section.

About the AHFIRM Trial

Enrollment is ongoing in our Phase 2b randomized, double-blind, placebo-controlled, international, multi-center study in subjects with severe acute alcohol-associated hepatitis (AH) to evaluate saFety and effIcacy of laRsucosterol (DUR-928) treatMent (AHFIRM). The study is comprised of three arms targeting enrollment of 300 total patients, with approximately 100 patients in each arm: (1) Placebo plus standard of care (SOC) which may include the use of methylprednisolone, a corticosteroid, at the discretion of the treating physician; (2) larsucosterol (30 mg); and (3) larsucosterol (90 mg).  All patients in the trial receive supportive care. The primary outcome measure is 90-day survival rate for patients treated with larsucosterol compared to those treated with placebo plus SOC.  The Company is targeting more than 60 clinical trial sites across the U.S., EU, U.K., and Australia. Reflecting the life-threatening nature of AH and the lack of therapeutic options, the U.S. Food and Drug Administration (FDA) has granted larsucosterol Fast Track Designation for the treatment of AH. We believe demonstration of a robust survival benefit in the AHFIRM trial would support an NDA filing. For more information, refer to ClinicalTrials.gov Identifier: NCT04563026.

About Alcohol-associated Hepatitis (AH)

AH is a life-threatening acute alcohol-associated liver disease (ALD) often caused by chronic heavy alcohol use and a recent period of increased alcohol consumption (i.e., a binge). It is characterized by severe inflammation and destruction of liver tissue (i.e., necrosis), potentially leading to life-threatening complications including liver failure, acute renal injury and multi-organ failure. There are no FDA approved therapies for AH and an analysis of 77 studies published between 1971 and 2016, which included data from a total of 8,184 patients, showed the overall mortality from AH was 26% at 28 days, 29% at 90 days and 44% at 180 days. A subsequent global study published in December 2021, which included 85 tertiary centers in 11 countries across 3 continents, prospectively enrolled 2,581 AH patients with a median MELD score of 23.5, reported mortality at 28 and 90 days of 20% and 31% respectively. Stopping alcohol consumption is not sufficient for recovery in many moderate and severe patients and the use of treatments to reduce liver inflammation, such as corticosteroids, are limited by contraindications and have been shown to provide no survival benefit at 90 days or 1 year. While liver transplantation is becoming more common for alcoholic liver disease patients, including for AH patients, the procedure involves a long waiting period, a burdensome selection process, and costs more than $875,000 on average.

About Larsucosterol (DUR-928)

Larsucosterol is an endogenous sulfated oxysterol and an epigenetic regulator. Epigenetic regulators are compounds that regulate patterns of gene expression without modifying the DNA sequence. DNA hypermethylation, an example of epigenetic dysregulation, results in transcriptomic reprogramming and cellular dysfunction, and has been found to be associated with many acute (e.g., AH) or chronic diseases (e.g., NASH). As an inhibitor of DNA methyltransferases (DNMT1, DNMT3a and 3b), larsucosterol inhibits DNA methylation, which subsequently regulates expression of genes that are involved in cell signaling pathways associated with stress responses, cell death and survival, and lipid biosynthesis. This may ultimately lead to improved cell survival, reduced inflammation, and decreased lipotoxicity. As an epigenetic regulator, the proposed mechanism of action provides further scientific rationale for developing larsucosterol for the treatment of acute organ injury and certain chronic diseases.

About DURECT Corporation

DURECT is a biopharmaceutical company committed to transforming the treatment of acute organ injury and chronic liver diseases by advancing novel and potentially lifesaving therapies based on its endogenous epigenetic regulator program. Larsucosterol (also known as DUR-928), DURECT's lead drug candidate, binds to and inhibits the activity of DNA methyltransferases (DNMTs), epigenetic enzymes which are elevated and associated with hypermethylation found in alcohol-associated hepatitis (AH) patients. Larsucosterol is in clinical development for the potential treatment of AH, for which FDA has granted a Fast Track Designation; non-alcoholic steatohepatitis (NASH) is also being explored. In addition, POSIMIR® (bupivacaine solution) for infiltration use, a non-opioid analgesic utilizing the innovative SABER® platform technology, is FDA-approved and has been exclusively licensed to Innocoll Pharmaceuticals for development and commercialization in the United States. For more information about DURECT, please visit www.durect.com and follow us on Twitter https://twitter.com/DURECTCorp.

DURECT Forward-Looking Statement

The statements in this press release regarding plans to complete enrollment of the AHFIRM trial in mid-2023, plans to increase the number of clinical trial sites in the AHFIRM trial, the expected commercial launch of POSIMIR by Innocoll and potential future payments we may receive from Innocoll, and the potential to develop larsucosterol for NASH or other indications 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 risks that the AHFIRM trial takes longer to conduct than anticipated due to COVID-19 or other factors, the risk that ongoing and future clinical trials of larsucosterol do not confirm the results from earlier clinical or pre-clinical trials, or do not demonstrate the safety or efficacy or the life-saving potential of larsucosterol in a statistically significant manner,  risks that Innocoll may not commercialize POSIMIR successfully, if at all, and risks related to our ability to obtain capital to fund operations and expenses. Further information regarding these and other risks is included in DURECT's Form 10-Q filed on November 3, 2021 and in our annual report on Form 10-K for the year ended December 31, 2021 when filed with the Securities and Exchange Commission under the heading "Risk Factors."  These reports are available on our website www.durect.com under the "Investors" tab.

NOTE: POSIMIR® is a trademark of Innocoll Pharmaceuticals, Ltd. in the U.S. and a trademark of DURECT Corporation outside of the U.S. SABER® is a trademark of DURECT Corporation. Other referenced trademarks belong to their respective owners. Larsucosterol (DUR-928) is an investigational drug candidate under development and has not been approved for commercialization by the U.S. Food and Drug Administration or other health authorities for any indication.

 

DURECT CORPORATION

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except per share amounts)

(unaudited)
























Three months ended


Twelve months ended




 December 31, 2021 


 December 31, 2021 




2021


2020


2021


 2020(1)











Collaborative research and development and other revenue

$    4,579


$        317


$    6,331


$    23,941

Product revenue, net

2,718


1,890


7,646


6,170


Total revenues

7,297


2,207


13,977


30,111











Operating expenses:









Cost of product revenues 

880


418


1,955


1,406


Research and development

8,415


6,682


31,846


27,709


Selling, general and administrative 

4,514


3,413


14,449


13,611

Total operating expenses

13,809


10,513


48,250


42,726











Loss from operations

(6,512)


(8,306)


(34,273)


(12,615)











Other income (expense):









Interest and other income

46


40


156


517


Interest and other expense

(542)


(547)


(2,148)


(2,237)

Net other expense

(496)


(507)


(1,992)


(1,720)

Loss from continuing operations

(7,008)


(8,813)


(36,265)


(14,335)

Income from discontinued operations

-


13,173


-


13,753

Net (loss) income

$   (7,008)


$      4,360


$  (36,265)


$       (582)











Net (loss) income per share









Basic and Diluted









    Loss from Continuing operations

$     (0.03)


$      (0.04)


$     (0.16)


$      (0.07)


    Income from discontinued operations

$         -


$       0.06


$         -


$       0.07


Net (loss) income per common share, basic and diluted

$     (0.03)


$       0.02


$     (0.16)


$      (0.00)











Weighted-average shares used in computing net (loss) income per share









Basic 


227,586


203,272


225,047


199,457


Diluted


227,586


211,497


225,047


199,457











Total comprehensive (loss) income

$   (7,020)


$      4,337


$  (36,270)


$       (584)





















(1)  Derived from audited financial statements.








 



DURECT CORPORATION



CONDENSED BALANCE SHEETS



(in thousands)








As of


As of



December 31, 2021


December 31, 2020(1)



(unaudited)



ASSETS





Current assets:





    Cash and cash equivalents


$                            49,844


$                            21,312

    Cash held in escrow


-


14,979

    Short-term investments


19,966


19,421

    Accounts receivable


6,477


940

    Inventories


1,870


1,864

    Prepaid expenses and other current assets


3,580


4,545

Total current assets


81,737


63,061






Property and equipment, net


227


251

Operating lease right-of-use assets


3,446


4,749

Goodwill


6,169


6,169

Long-term investments 


-


1,000

Long-term restricted Investments


150


150

Other long-term assets


261


261

Total assets


$                            91,990


$                            75,641






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





    Accounts payable


$                              1,311


$                              1,678

    Accrued liabilities


6,799


6,346

    Deferred revenue, current portion


98


-

    Term loan, current portion, net


-


884

    Operating lease liabilities, current portion


1,848


1,795

Total current liabilities


10,056


10,703






Deferred revenue, noncurrent portion


812


812

Operating lease liabilities, noncurrent portion


1,824


3,202

Term loan, noncurrent portion, net


20,632


19,936

Other long-term liabilities


884


873






Stockholders' equity


57,782


40,115

Total liabilities and stockholders' equity 


$                            91,990


$                            75,641





















(1)  Derived from audited financial statements.





 

Cision View original content:https://www.prnewswire.com/news-releases/durect-corporation-reports-fourth-quarter-and-full-year-2021-financial-results-and-update-of-programs-301497079.html

SOURCE DURECT Corporation

Investor Relations (DURECT) - Michael Morabito, PhD, Solebury Trout, +1-646-378-2928, mmorabito@soleburytrout.com; Media Contact (DURECT) - Mónica Rouco Molina, PhD, LifeSci Communications, +1-929-469-3850, mroucomolina@lifescicomms.com