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DURECT Corporation Announces First Quarter 2019 Financial Results and Update of Programs

Live Webcast of Alcoholic Hepatitis KOL and Earnings Call on Wednesday, May 8th at 8:30 a.m. ET

Call will feature discussions by KOLs Steven Flamm, M.D.. Tarek I. Hassanein, M.D., and Paul Kwo, M.D.

CUPERTINO, Calif., May 7, 2019 /PRNewswire/ -- DURECT Corporation (DRRX) today announced financial results for the three months ended March 31, 2019 and provided a corporate update, including preliminary data from the ongoing DUR-928 Phase 2a alcoholic hepatitis (AH) trial.

  • Total revenues were $4.1million and net loss was $7.1million for the three months ended March 31, 2019 as compared to total revenues of $3.5 million and net loss of $8.3 million for the three months ended March 31, 2018.
  • At March 31, 2019, cash and investments were $28.8 million, compared to cash and investments of $34.5 million at December 31, 2018. Debt at March 31, 2019, including partial accrual for the final payment of our term loan, was $20.7 million.

"Several important development milestones were achieved during the first quarter, including achieving impressive preliminary data in the ongoing AH trial and initiating dosing in the NASH and psoriasis clinical trials. We also made progress toward filing a response to the POSIMIR CRL and strengthened our board with the addition of two new members who bring valuable experience and perspective." stated James E. Brown, D.V.M., President and CEO of DURECT. "Thanks to the progress made during the quarter, we have four potential major catalysts ahead of us this year: additional AH data, readouts from the NASH and psoriasis DUR-928 clincal trials, and a potential approval for POSIMIR if our filing strategy is successful."

Update on Selected Programs and Transactions:

Epigenetic Regulator Program. DUR-928, the lead product candidate in the Company's Epigenetic Regulator Program, is an endogenous, first-in-class small molecule, which may have broad applicability in chronic liver diseases such as NASH, in acute organ injuries such as AH and acute kidney injury (AKI), and in inflammatory skin disorders such as psoriasis and atopic dermatitis.

Clinical Trials

Alcoholic Hepatitis (AH)

  • Preliminary Data
  • About the trial
  • In parallel with our ongoing trial, we are supporting Professor Craig McClain, MD (Chief of Research Affairs, Division of Gastroenterology, Hepatology and Nutrition, University of Louisville) in his efforts to initiate an NIH-funded study of DUR-928 in AH patients at the University of Louisville.
  • AH is a syndrome of progressive inflammatory liver injury associated with long-term heavy intake of alcohol, and encompasses a spectrum that ranges from mild injury to severe, life threatening liver damage. The prevalence of AH is estimated to occur in 10-35% of heavy drinkers. According to an article in the Journal of Clinical Gastroenterology (2015 July; 49(6):506-511), there were over 320,000 hospitalizations related to alcoholic hepatitis in the U.S. in 2010, resulting in hospitalization costs of nearly $50,000 per patient. The cost of a liver transplant exceeds $800,000.

Non-Alcoholic Steatohepatitis (NASH)

  • In March 2019 we began enrolling patients in a Phase 1b randomized and open-label clinical study being conducted in the U.S. to evaluate safety, pharmacokinetics and signals of biological activity of DUR-928 in NASH patients with stage 1-3 fibrosis. Three doses of DUR-928 (50 mg QD, 150 mg QD and 300 mg BID) will be administered orally for 28 consecutive days with approximately 20 patients per dose group for a total of approximately 60 patients in the trial.
  • Key endpoints include safety and pharmacokinetics (PK), clinical chemistry and biomarkers (e.g., bilirubin, lipids, liver enzymes, CK-18s, and inflammatory cytokines) as well as liver imaging (e.g., MRI-PDFF).
  • We expect to announce initial data from this study in the second half of 2019.
  • In the Company's previous Phase 1b NASH study, reported at the European Association for the Study of the Liver (EASL) in April 2017, exploratory biomarker analysis demonstrated that a single oral dose of DUR-928 in NASH patients, at both dose levels tested (50 mg and 200 mg), resulted in statistically significant reductions from baseline of both full-length and cleaved cytokeratin-18 (CK-18), bilirubin, hsCRP and IL-18.
  • Non-alcoholic fatty liver disease (NAFLD) is the most common form of chronic liver disease in both children and adults. It is estimated that NAFLD affects about 20% to 30% of adults and 10% of children in the United States. NASH, a more severe and progressive form of NAFLD, is one of the most common chronic liver diseases worldwide, with an estimated prevalence of more than 10% of adults in the United States, Europe, Japan and other developed countries. No drug is currently approved for NAFLD or NASH.

Psoriasis

  • We are conducting a Phase 2a, randomized, double-blind, vehicle-controlled proof-of-concept clinical trial, in which DUR-928 is applied topically once-daily for four weeks in patients with mild to moderate plaque psoriasis. The trial is being conducted at multiple clinical sites in the U.S. Twenty patients are planned to be enrolled to obtain approximately 15 evaluable patients. Patients serve as their own controls, applying DUR-928 to the plaque on one arm and the vehicle to a similar plaque on the other arm. After the treatment period, patients will be followed for an additional four weeks. The primary efficacy endpoint is the change in local psoriasis scores from baseline in the DUR-928-treated plaques compared to that in the vehicle-treated plaques. Additional information on the trial design, including eligibility criteria and site locations, can be found at www.clinicaltrials.gov using the NCT Identifier 03837743.
  • We began enrolling patients in March of 2019 and expect to announce top line data from this study in the second half of 2019.
  • We previously conducted an exploratory Phase 1b trial in psoriasis patients (9 evaluable patients) in Australia. The trial was randomized, double-blinded, placebo and self-controlled, using a micro-plaque assay with intralesional injections of DUR-928. The results were encouraging and warranted advancing into the current proof-of-concept trial with topically applied DUR-928. In support of the Phase 2a study, we have completed multiple non-clinical safety studies for topically applied DUR-928.
  • Psoriasis is an inflammatory skin disease and an immune-mediated condition that causes the body to make new skin cells in days rather than weeks. In the United States, there are about 150,000 new cases of psoriasis every year and it affects an estimated 7.5 million Americans. According to the International Federation of Psoriasis Associations (IFPA), nearly 3% of the world's population has some form of psoriasis or about 125 million people. Psoriasis causes itchiness and irritation and may be painful. There's no cure for psoriasis yet, but currently approved treatment can ease symptoms. Approximately 80% of patients with psoriasis have localized disease, which can be treated with topical therapies. As such, topical agents remain the mainstay of psoriasis treatment.

POSIMIR® (bupivacaine extended-release solution) Post-Operative Pain Relief Depot. POSIMIR is our investigational post-operative pain relief depot that utilizes our patented SABER® technology and is designed to deliver bupivacaine to provide up to 3 days of pain relief after surgery.

  • After a comprehensive review of the POSIMIR program in light of the issues raised by the FDA in our communications with them, including the Complete Response Letter (CRL), we are planning to submit a full response to the CRL in the second quarter of 2019. As the submission will be a response to a CRL, we expect a 6-month FDA review period.
  • The effort to evaluate the program, develop a strategy for filing the response, and the actual writing of key sections of the response, has been under the direction of Dr. Lee Simon, who was formerly FDA's Division Director of Analgesic, Anti-inflammatory and Ophthalmologic Drug Products.
  • We believe that the completed inguinal hernia and subacromial decompression (shoulder) clinical trials support the efficacy of POSIMIR in post-operative pain and meet the requirements to be considered as adequate and well-controlled pivotal clinical trials. Both trials demonstrated a significant decrease in pain and opioid use over the 0-72 hour period following surgery as compared to placebo.
  • We have completed 16 clinical trials in the POSIMIR program, involving over 1,400 patients, over 850 of whom received POSIMIR with the remainder in control groups. We believe this is a sufficiently sized safety database. We believe that, with the PERSIST safety data included, we now have sufficient data to address FDA's issues raised in the CRL and that the data package meets the requirements for FDA approval.
  • POSIMIR has not been approved by the FDA for marketing in the U.S. for any indication and there can be no assurance that FDA will approve the planned submission described above.

Indivior Agreement and PERSERISIn September 2017, we entered into a patent purchase agreement with an affiliate of Indivior PLC, whereby we assigned certain of its U.S. patent rights to Indivior. This assignment may provide further intellectual property protection for PERSERIS (risperidone) extended-release injectable suspension for the treatment of schizophrenia in adults.  

  • Under the terms of the agreement, Indivior has paid us $12.5 million upfront and a $5 million milestone based on NDA approval of PERSERIS. We also receive quarterly earn-out payments based on a single digit percentage of U.S. net sales for certain products covered by the patent rights, including PERSERIS. The patent rights include granted patents extending into at least 2026.
  • According to its recent press releases, Indivior has stated that:
  • U.S. sales of long acting injectables to treat schizophrenia were in excess of $3 billion in 2017.
  • Full prescribing information for PERSERIS, including BOXED WARNING, and Medication Guide can be found at www.perseris.com.

Methydur Sustained Release Capsules (ORADUR®-methylphenidate ER Capsules).  In September 2018, our licensee, Orient Pharma, informed DURECT that it had obtained marketing authorization from the Ministry of Health and Welfare in Taiwan for Methydur Sustained Release Capsules.  This product is indicated for the treatment of attention deficit hyperactivity disorder (ADHD) and Orient Pharma has stated that it expects to make Methydur Sustained Release Capsules commercially available in Taiwan in 2019, while seeking a partner in China and pursuing regulatory approvals in selected other countries where it has commercialization rights and a commercial presence. DURECT retains rights to North America, Europe, Japan and all other countries not specifically licensed to Orient Pharma.  DURECT is entitled to receive a royalty on sales of Methydur Sustained Release Capsules by Orient Pharma. Orient Pharma has also committed to supply a portion of the commercial requirements in territories other than the United States for Methydur Sustained Release Capsules. 

Earnings Conference Call
A live audio webcast of a conference call to discuss first quarter 2019 results and provide a corporate update will be broadcast live over the internet at 8:30 a.m. Eastern Time on May 8, 2019 and is available by accessing DURECT's homepage at www.durect.com and clicking "Investors." A replay of the call will be archived on DURECT's website under Audio Archive in the "Investors" section.

About DURECT Corporation

DURECT is a biopharmaceutical company actively developing therapeutics based on its Epigenetic Regulator Program and proprietary drug delivery platforms.  DUR‑928, a new chemical entity in Phase 2 development, is the lead candidate in DURECT's Epigenetic Regulator Program.  An endogenous, orally bioavailable small molecule, DUR-928 has been shown in preclinical studies to play an important regulatory role in lipid homeostasis, inflammation, and cell survival.  Human applications may include acute organ injury such as Alcoholic Hepatitis (AH) and acute kidney injury (AKI), hepatic diseases such as nonalcoholic steatohepatitis (NASH), and inflammatory skin conditions such as psoriasis and atopic dermatitis.  DURECT's advanced oral and injectable delivery technologies are designed to enable new indications and enhanced attributes for small-molecule and biologic drugs.  Late stage product candidates in this category include POSIMIR®(bupivacaine extended-release solution), an investigational locally-acting, non-opioid analgesic intended to provide up to 3 days of continuous pain relief after surgery, and ORADUR®-Methylphenidate ER Capsules, approved in Taiwan as Methydur Sustained Release Capsules, where it is indicated for the treatment of attention deficit hyperactivity disorder (ADHD). In addition, for the assignment of certain patent rights, DURECT receives single digit sales-based earn-out payments from U.S. net sales of Indivior's PERSERIS (risperidone) drug for schizophrenia, which was commercially launched in February 2019. For more information, please visit www.durect.com.

NOTE: ORADUR®, POSIMIR® and SABER® are trademarks of DURECT Corporation. Other referenced trademarks belong to their respective owners. DUR-928 and POSIMIR are drug candidates under development and have not been approved for commercialization by the U.S. Food and Drug Administration or other health authorities.

DURECT Forward-Looking Statement

The statements in this press release regarding clinical development plans for DUR-928, including the ongoing Phase 2a trial in AH and its preliminary results, the Phase 2a trial in psoriasis and the Phase 1b trial in patients with NASH, and the anticipated disclosure of data from clinical trials, potential future payments from Indivior and Orient Pharma, potential regulatory approval of POSIMIR, and the potential benefits and uses of our drug candidates, including the potential use of DUR-928 to treat acute organ injury such as AH and AKI, hepatic diseases such as NASH, and inflammatory skin conditions such as psoriasis and atopic dermatitis, 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 future clinical trials of DUR-928 take longer to conduct than anticipated, do not replicate the results from earlier clinical or pre-clinical trials, or do not demonstrate the safety or efficacy of DUR-928 in a statistically significant or clinically meaningful manner, the risk that the FDA will not approve POSIMIR, the risk that Indivior's PERSERIS will not obtain marketplace acceptance, the risk that Orient Pharma will not launch sales of Methydur Sustained Release Capsules as planned, the risk that additional time and resources that may be required for development, testing and regulatory approval of DUR-928 or POSIMIR, potential adverse effects arising from the testing or use of our drug candidates, our potential failure to maintain our collaborative agreements with third parties or consummate new collaborations 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 with the Securities and Exchange Commission on May 7, 2019 under the heading "Risk Factors."

DURECT CORPORATION


CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share amounts)

(unaudited)
















Three months ended




 March 31 




2019


2018







Collaborative research and development and other revenue


$  1,500


$  1,096

Product revenue, net


2,631


2,392


Total revenues


4,131


3,488







Operating expenses:






Cost of product revenues 


1,136


1,174


Research and development


6,251


6,952


Selling, general and administrative 


3,454


3,194

Total operating expenses


10,841


11,320







Loss from operations


(6,710)


(7,832)







Other income (expense):






Interest and other income


209


158


Interest and other expense


(629)


(623)

Net other expense


(420)


(465)







Net loss


$ (7,130)


$ (8,297)







Net loss per share






Basic 


$   (0.04)


$   (0.05)


Diluted


$   (0.04)


$   (0.05)







Weighted-average shares used in computing net loss per share






Basic 


162,091


153,558


Diluted


162,091


153,558







Total comprehensive loss


$ (7,134)


$ (8,297)

 


DURECT CORPORATION


CONDENSED BALANCE SHEETS

(in thousands)








As of


As of



March 31, 2019


December 31, 2018(1)



(unaudited)



ASSETS





Current assets:





    Cash and cash equivalents


$         27,641


$                   31,644

    Short-term investments


989


2,671

    Accounts receivable


2,221


1,757

    Inventories, net


3,410


3,421

    Prepaid expenses and other current assets


2,213


2,247

Total current assets


36,474


41,740






Property and equipment, net


589


605

Operating lease right-of-use assets


7,028


-

Goodwill


6,399


6,399

Long-term restricted Investments


150


150

Other long-term assets


1,105


1,105

Total assets


$         51,745


$                   49,999






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





    Accounts payable


$           1,933


$                     1,589

    Accrued liabilities


4,322


4,668

    Contract research liability


1,489


1,405

    Operating lease liabilities, current portion


1,999


-

Total current liabilities


9,743


7,662






Deferred revenue, noncurrent portion


812


812

Term loan, noncurrent portion, net


20,670


20,533

Operating lease liabilities, noncurrent portion


5,440


-

Other long-term liabilities


722


992






Stockholders' equity


14,358


20,000

Total liabilities and stockholders' equity 


$         51,745


$                   49,999


(1)  Derived from audited financial statements.

 

Cision

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