CUPERTINO, Calif., Feb. 8 /PRNewswire-FirstCall/ — DURECT Corporation
(Nasdaq: DRRX) announced today financial results for the three months and year
ended December 31, 2006. Total revenues were $5.4 million for the three months
ended December 31, 2006, compared to $5.8 million for the same period in 2005.
Net loss for the three months ended December 31, 2006 was $9.6 million,
compared to a net loss of $6.0 million for the same period in 2005. As a
result of the upfront license fee of $14 million received from our
collaboration with Nycomed related to POSIDUR(TM), cash provided by operating
activities was $7.0 million for the three months ended December 31, 2006,
compared to $5.6 million of cash used in operating activities for the same
period in 2005.
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For the fiscal year ended December 31, 2006, total revenues were $21.9
million, compared to $28.6 million for the same period in 2005. Net loss for
the year ended December 31, 2006 was $33.2 million, compared to a net loss of
$18.1 million for the same period in 2005. Cash used in operating activities
was $9.5 million for the year ended December 31, 2006, compared to $7.2
million of cash used in operating activities for the same period in 2005.
At December 31, 2006, DURECT had cash and investments of $81.6 million,
including $1.3 million in restricted investments, compared with cash and
investments of $74.3 million at September 30, 2006 and $91.0 million at
December 31, 2005.
“DURECT closed the year on a strong note and with considerable momentum,”
stated James E. Brown, D.V.M., President and CEO of DURECT. “DURECT currently
has 5 investigational drugs in Phase II or III, and an additional
investigational drug in Phase I. In the last three months, we signed a
landmark collaboration with Nycomed around POSIDUR, unveiled a new wholly-
owned Phase II program (TRANSDUR(TM)-Bupivacaine), and reported positive Phase
I results for our second ORADUR-opioid in development.”
Highlights for DURECT in Fiscal Year 2006 include:
- POSIDUR Post-Operative Pain Relief Depot. Our POSIDUR program
advanced on both a development and business front during 2006.- Development Progress. During 2006, our US IND was accepted,
and we commenced multiple Phase II clinical trials in the U.S.
and in other countries in a variety of soft-tissue and
orthopedic surgeries for the purpose of selecting the optimal
dosing and the surgical procedures for our pivotal Phase III
trials. - Business Progress. In November 2006, we signed a $202 million
collaboration agreement with Nycomed, one of the top 25
pharmaceutical companies in the world. Under the terms of the
agreement, DURECT has licensed to Nycomed the exclusive
commercialization rights to POSIDUR for the European Union
(E.U.) and select other countries. Nycomed has paid DURECT an
upfront license fee of $14 million, with future potential
additional milestone payments of up to $188 million upon
achievement of defined development, regulatory and sales
milestones. The two parties will jointly direct and equally
fund a development program for POSIDUR intended to secure
regulatory approval in both the U.S. and the E.U. In addition,
DURECT will manufacture and supply the product to Nycomed for
commercial sale in the territory licensed to Nycomed. Nycomed
will pay DURECT blended royalties on sales in the defined
territory of 15-40% depending on annual sales, as well as a
manufacturing markup. Nycomed has a strong surgical suite
salesforce, along with excellent clinical and regulatory
capabilities. DURECT has retained full commercial rights to
POSIDUR in the U.S., Canada, Asia and other countries.
- Development Progress. During 2006, our US IND was accepted,
- Remoxy(TM). Remoxy, an abuse-resistant long-acting form of
oxycodone based on our ORADUR(TM) technology, completed a Special
Protocol Assessment (SPA) with the United States Food and Drug
Administration (FDA) and then commenced a pivotal Phase III trial in
the first half of 2006 in accordance with that SPA. Remoxy is
licensed to Pain Therapeutics, which has in turn sublicensed
commercialization rights to King Pharmaceuticals. - TRANSDUR-Sufentanil. During 2006, our main activity under this
program involved supply of product for on-going clinical and non-
clinical studies conducted by Endo Pharmaceuticals. In addition, we
were engaged in technology transfer to the commercial transdermal
patch manufacturer (3M Company) contracted by Endo to produce
additional Phase II supplies, Phase III supplies and then commercial
supplies. - TRANSDUR-Bupivacaine. We announced that we had successfully
completed Phase I clinical trials in December 2006 and announced the
initiation of Phase II clinical studies in January 2007 for our
TRANSDUR-Bupivacaine (DUR-843) drug candidate, a patch based on our
proprietary TRANSDUR transdermal technology that is intended to
provide continuous delivery of bupivacaine for up to three days from
a single application, as compared to a wearing time limited to 12
hours with currently available lidocaine patches. DURECT’s Phase II
program for TRANSDUR-Bupivacaine has begun in the U.S. under an FDA-
accepted Investigational New Drug (IND) application with a
randomized, multi-center, double-blind, placebo controlled, two-way
crossover trial in approximately 50 patients with Post-Herpetic
Neuralgia (PHN or post-shingles pain). DURECT retains full
commercial rights to this drug candidate. - Other ORADUR Products. During 2006, we worked with King and Pain
Therapeutics on the development of a second ORADUR abuse-resistant
opioid product. In August 2006, King and Pain Therapeutics
announced the initiation of a Phase I clinical trial for a new
ORADUR-based opioid investigational drug, and that the FDA had
accepted the IND for this investigational drug. In November 2006,
Pain Therapeutics announced positive results from that Phase I
clinical trial.
Financial Guidance for 2007 and Major Potential Milestones Over the Next
12-18 Months
- Financial Guidance. Our cash burn rate is heavily influenced by the
timing and structure of new corporate collaborations. While we
anticipate entering into new collaborations in 2007 and beyond,
assuming no new collaborations and aggressive funding of our R&D
programs, many of which are in clinical development, we anticipate
cash burn in 2007 of approximately $32-36 million. - Business Development Activities. We have multiple programs that may
potentially be partnered over the next 12-18 months. These include
TRANSDUR-Bupivacaine, TRANSDUR-Sufentanil for Europe and for Asia,
POSIDUR for Asia, as well as various internal programs which we have
not described publicly in detail. - POSIDUR(TM) Post-Operative Pain Relief Depot. During the course of
2007, we expect to provide data from our on-going Phase II trials.
Pending the successful completion of our on-going Phase II trials
and approval of regulatory authorities, we anticipate commencing our
Phase III program in 2007. - Remoxy. Our partner, Pain Therapeutics, has stated that they
believe that they remain on track to announce results of a Phase III
trial with Remoxy in the first half of 2007, followed by an NDA
filing for Remoxy three quarters after data release. - TRANSDUR-Sufentanil Patch. Based on public disclosures, Endo
Pharmaceuticals has stated that it expects to conduct additional
Phase II studies with the TRANSDUR-Sufentanil patch in the first
half of 2007 with patches supplied from its contract manufacturer
(3M Company). - TRANSDUR-Bupivacaine Patch. During the course of 2007, we
anticipate announcing the results of our current Phase II clinical
trial. - Memryte(TM) Program. Our collaborator, Voyager Pharmaceutical, has
informed DURECT that Voyager has truncated its Phase III clinical
trial for Memryte for the treatment of Alzheimer’s Disease in order
to get an early look at potential efficacy. Voyager anticipates
that data from this truncated trial will be available in the first
half of 2007.
About DURECT Corporation
DURECT Corporation is an emerging specialty pharmaceutical company focused
on the development of pharmaceutical systems based on its proprietary drug
delivery platform technologies. The company is developing pharmaceutical
systems to deliver the right drug to the right place in the right amount at
the right time to treat chronic and episodic diseases and conditions. For more
information, please visit www.www.durect.com.
NOTE: POSIDUR(TM), SABER(TM), ORADUR(TM), DURIN(TM), TRANSDUR(TM) and
MICRODUR(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 DURECT’s products in
development, product development plans, anticipated regulatory, clinical and
development milestones and timing thereof, future clinical trial results,
anticipated future collaborative agreements, projected financial results and
DURECT’s emergence as a specialty pharmaceutical company 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 (and that of
its 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, enter into additional
collaborative agreements and manufacture and commercialize the product
candidate, as well as marketplace acceptance of the product candidate, manage
and obtain capital to fund its growth, operations and expenses. Further
information regarding these and other risks is included in DURECT’s Form 10-Q
on November 3, 2006 under the heading “Risk Factors.”
DURECT CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months ended Year ended
December 31, December 31,
2006 2005 2006 2005
Collaborative research and
development and other revenue $3,522 $4,136 $13,786 $20,032
Product revenue, net 1,919 1,640 8,108 6,939
Revenue from sale of
intellectual property rights - - - 1,600
Total revenues 5,441 5,776 21,894 28,571
Operating expenses:
Cost of revenues (1) 981 882 3,246 2,815
Research and development (1) 11,497 7,840 37,140 29,141
Selling, general and
administrative (1) 2,829 2,672 12,369 11,034
Amortization of intangible
assets 8 300 424 1,209
Total operating expenses 15,315 11,694 53,179 44,199
Loss from operations (9,874) (5,918) (31,285) (15,628)
Other income (expense):
Interest and other income 991 911 3,832 2,270
Interest expense (717) (1,034) (3,436) (4,363)
Debt conversion expense - - (2,287) (403)
Net other income (expense) 274 (123) (1,891) (2,496)
Loss before income taxes (9,600) (6,041) (33,176) (18,124)
Income tax provision - - - 4
Net loss $(9,600) $(6,041) $(33,176) $(18,128)
Net loss per common share,
basic and diluted $(0.14) $(0.10) $(0.50) $(0.34)
Shares used in computing basic
and diluted net loss per share 68,980 58,201 65,961 53,719
(1) Stock-based compensation
related to the following:
Cost of revenues $26 $- $72 $-
Research and development 699 131 2,784 237
Selling, general and
administrative 372 7 1,384 354
$1,097 $138 $4,240 $591
DURECT CORPORATION
CONDENSED BALANCE SHEETS
(in thousands)
December 31, December 31,
2006 2005 (1)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $41,554 $65,542
Short-term investments 28,297 18,022
Restricted investments - 321
Accounts receivable, net 2,152 4,488
Inventories 2,052 2,047
Prepaid expenses and other
current assets 1,744 3,659
Total current assets 75,799 94,079
Property and equipment, net 7,451 7,304
Goodwill 6,399 6,399
Intangible assets, net 111 536
Long-term investments 10,472 5,459
Restricted investments 1,284 1,653
Other long-term assets 969 1,984
Total assets $102,485 $117,414
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $864 $1,835
Accrued liabilities 4,522 3,874
Contract research liabilities 1,624 1,418
Interest payable on convertible notes 97 149
Deferred revenue, current portion 5,348 2,367
Equipment financing obligations
and term loan, current portion 34 34
Bonds payable, current portion 210 200
Total current liabilities 12,699 9,877
Bonds payable, equipment financing
obligations and term loan,
noncurrent portion 606 702
Convertible subordinated notes 37,337 57,337
Deferred revenue, noncurrent portion 14,507 6,016
Other long-term liabilities 304 130
Stockholders' equity 37,032 43,352
Total liabilities and
stockholders' equity $102,485 $117,414
(1) Derived from audited financial statements.
SOURCE DURECT Corporation
02/08/2007
CONTACT: Schond L. Greenway, Vice President, Investor Relations and
Strategic Planning of DURECT Corporation, +1-408-777-1417; or Jeremiah Hall,
Senior Vice President of Feinstein Kean Healthcare, +1-415-677-2700, or
jeremiah.hall@fkhealth.com
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Web site: http://www.www.durect.com
(DRRX)