CUPERTINO, Calif., Jan. 28 /PRNewswire-FirstCall/ —
DURECT Corporation (Nasdaq: DRRX) announced today financial results for the
three months and year ended December 31, 2002.
DURECT’s net loss for the three months ended December 31, 2002 was $8.5
million or 17 cents per share, compared to $10.1 million or 21 cents per share
for the same period in 2001. DURECT’s results for the three months ended
December 31, 2002 included non-cash charges for the amortization of intangible
assets and stock-based compensation of $103,000, compared to $1.3 million for
the same period in 2001.
DURECT’s net loss for the year ended December 31, 2002 was $37.2 million
or 77 cents per share, compared to $44.9 million or 97 cents per share for the
same period in 2001. DURECT’s results for the year ended December 31, 2002
included non-cash charges for the amortization of intangible assets and stock-
based compensation of $2.5 million, compared to $5.3 million for the same
period in 2001. DURECT’s net loss for the year ended December 31, 2001
included a one-time, non-cash charge of $14.0 million for acquired in-process
research and development associated with the acquisition of Southern
BioSystems, Inc.
“Over the past year, we have made significant progress in our product
development efforts as we move closer towards our goal of developing products
that will improve the quality of life for patients with chronic diseases and
enable biotechnology products,” stated Jim Brown, President and CEO of DURECT.
“Last year, we stated that our major corporate objectives for 2002 were to
sign a commercialization agreement for our lead development program,
CHRONOGESIC, and capture value from the additional drug delivery technology
platforms acquired by us along with Southern BioSystems.”
Dr. Brown added, “Over the last 10 months, we have announced six strategic
partnerships using our drug delivery technologies. This includes the announced
collaboration with Endo Pharmaceuticals for our CHRONOGESIC product for the
U.S. and Canadian markets. These collaborations help to reduce the risk
profile of the Company by broadening our product portfolio mix, validating our
technology platforms and providing us with a substantial source of funding.”
Research and development expenses were $5.8 million and $29.6 million for
the three months and the year ended December 31, 2002, compared to $7.9
million and $24.6 million for the same periods in 2001. The decrease in the
three months ended December 31, 2002 was primarily attributable to the
reduction in force in November 2002 as a result of an increased focus on cash
conservation and product development activities. The increase in fiscal year
2002 was primarily attributable to expanded research and development
activities, especially related to preparation and initiation of the company’s
pivotal Phase III clinical trial and continuing animal toxicological studies
for the CHRONOGESIC product. The increase in research and development expenses
in fiscal year 2002 was also attributable to continued research and
development of other pharmaceutical systems based on SABER and DURIN
technologies and the hiring of additional research and development personnel.
Selling, general and administrative expenses were $4.0 million and $11.0
million in the three months and twelve months ended December 31, 2002,
compared to $2.4 million and $8.8 million for the same periods in 2001. The
increases were primarily related to a one-time expense of $1.7 million for
strategic partner advisory services in connection with the Endo partnership in
the fourth quarter of 2002.
At December 31, 2002, DURECT had cash and investments of $48.3 million,
including $2.9 million in restricted investments.
Fourth Quarter and Fiscal Year 2002 Accomplishments
DURECT signed six corporate collaborations in 2002. These collaborations
include the following:
-
Collaboration with Endo Pharmaceuticals for the CHRONOGESIC product for
the treatment in pain management. -
Agreement with Cardinal Health using DURECT’s SABER(TM) delivery system
to develop long acting oral gel-cap products; -
Development and commercialization agreement with Voyager Pharmaceutical
for a DURIN-based Alzheimer’s Disease therapy; -
Biotechnology partnership with BioPartners to develop a SABER-based
sustained release alpha interferon product for the treatment of
Hepatitis C; -
Expansion of an existing licensing agreement with Thorn BioScience to
develop selected SABER-based veterinary products. Thorn’s first product
using the SABER technology has already received approval for the
efficacy portion of its NADA. The safety portion of the NADA has also
been submitted and the remainder of the filing is expected to be
submitted to the FDA this year. This is the first SABER product to be
reviewed by the FDA. -
Collaboration with Pain Therapeutics to formulate certain long-acting
opioid drugs in oral dosage forms.
First Quarter and Fiscal Year 2003 Financial Guidance
-
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 to $5.0 million for the fiscal year of 2003. -
DURECT expects its net loss for the first quarter of 2003 will range
from $7.0 million to $7.5 million or 14 to 15 cents per share. -
Total cash burn for the fiscal year 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 addition to its rights to the CHRONOGESIC
product, 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), SABER(TM), MICRODUR(TM) and DURIN(TM) are trademarks 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, manage relationships with third parties,
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, DURECT’s Quarterly
Report on Form 10Q for the quarter ended September 30, 2002 filed with the SEC
on November 14, 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 BALANCE SHEETS
(in thousands)
December 31, December 31,
2002 2001(1)
Assets
Current assets:
Cash, cash equivalents and short-term
investments $42,800 $55,204
Inventories and other current assets 4,241 5,007
Total current assets 47,041 60,211
Property and equipment, net 11,625 13,136
Goodwill 4,716 4,716
Intangible assets, net 4,121 5,462
Long-term investments and other non-current assets 5,468 21,418
Total assets $72,971 $104,943
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $4,568 $5,065
Long-term obligations, current portion 617 683
Total current liabilities 5,185 5,748
Long-term obligations and other 6,604 2,147
Stockholders' equity 61,182 97,048
Total liabilities and stockholders' equity $72,971 $104,943
(1) Derived from audited financial statements.
DURECT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Quarter ended Year ended
December 31, December 31,
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) *
Revenue, net $2,006 $1,597 $7,185 $6,524
Operating expenses:
Cost of goods sold (1) 873 850 3,158 3,398
Research and development 5,810 7,889 29,554 24,570
Selling, general and
administrative 3,981 2,441 10,970 8,779
Amortization of intangible
assets 335 554 1,340 1,844
Stock-based
compensation (1) (243) 701 1,132 3,305
Acquired in-process
research and development -- -- -- 14,030
Total operating expenses 10,756 12,435 46,154 55,926
Loss from operations (8,750) (10,838) (38,969) (49,402)
Other income (expense):
Interest income 339 837 2,076 4,796
Interest expense (48) (85) (280) (322)
Net other income 291 752 1,796 4,474
Net loss $(8,459) $(10,086) $(37,173) $(44,928)
Net loss per share,
basic and diluted $(0.17) $(0.21) $(0.77) $(0.97)
Shares used in computing
basic and diluted net
loss per share 49,251 47,304 48,318 46,414
(1) Stock-based compensation related to the following:
Cost of goods sold $11 $29 $72 $146
Research and development (321) 438 622 2,235
Selling, general and
administrative 78 263 510 1,070
Total stock-based
compensation $(232) $730 $1,204 $3,451
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