• Total Revenue: $2.2 million in Q2 2024, compared to $2.1 million in Q2 2023.
• R&D Expense: $2.2 million in Q2 2024, down from $7.9 million in Q2 2023.
• SG&A Expense: $3 million in Q2 2024, compared to $3.8 million in Q2 2023.
• Cash and Investments: $15.8 million as of June 30, 2024.
• Cash Burn: $5.8 million for Q2 2024.

• Warning! GuruFocus has detected 7 Warning Signs with DRRX.

Release Date: August 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Durect Corp (NASDAQ:DRRX) reported a slight increase in total revenues for Q2 2024, reaching $2.2 million compared to $2.1 million in 2023.
• R&D expenses significantly decreased to $2.2 million in Q2 2024 from $7.9 million in the previous year, primarily due to lower clinical trial-related expenses.
• The company received Breakthrough Therapy designation for larsucosterol, which expedites the development and review process with the FDA.
• Larsucosterol showed a 57% and 58% reduction in 90-day mortality in US patients during the Phase IIb trial, indicating strong potential efficacy.
• Durect Corp (NASDAQ:DRRX) has sufficient cash and investments of $15.8 million to fund operations through the end of 2024.

Negative Points

• Despite the revenue increase, the overall financial performance remains modest with only a $0.1 million increase year-over-year.
• The cash burn for Q2 2024 was $5.8 million, which could be a concern if additional funding is not secured.
• The company is awaiting written minutes from the FDA meeting, which could delay further updates on the Phase III trial design.
• There are regional differences in trial results, with US patients showing better outcomes than those in the EU, which may complicate global trial strategies.
• The cost of the upcoming Phase III trial is expected to be around $25 million, requiring significant funding beyond current cash reserves.

Q & A Highlights

Q: Is it fair to assume that the next update to the investing community would be around the meeting minutes from the FDA? How long does it usually take to get the minutes back? A: Yes, we are waiting for the meeting minutes, which typically take about 4-plus weeks to receive. We will provide an update once we have them. We feel comfortable about the timeline but want confirmation from the FDA before discussing further. - James Brown, President, CEO, Director

Q: Have you disclosed any differences between the EU and US sites in the trial? How does the patient experience differ? A: We will provide more details as the year unfolds. There are regional differences, such as dosing schedules and biopsy requirements, which may explain data differences. More data will be shared in upcoming presentations. - James Brown, President, CEO, Director and WeiQi Lin, EVP of R&D, Principal Scientist

Q: What further details can we expect once you review the FDA meeting minutes? A: We expect to confirm details like the primary endpoint, trial powering, and patient numbers. The Breakthrough Therapy designation allows us to have open conversations with the FDA, who recognize the unmet need in AH. - James Brown, President, CEO, Director

Q: Is it your intention for the Phase III trial to be conducted only in US sites? What is the expected cost of the trial? A: We are currently focusing on US sites due to continuity in the healthcare system. The expected outside cost for the trial is around $25 million, with additional G&A expenses. - James Brown, President, CEO, Director and Timothy Papp, CFO, Company Secretary

Q: Can you provide guidance on operating expenses for the second half of the year? A: We expect operating expenses to remain in the $3.5 million to $4 million range per quarter, excluding debt service. Most incremental expenses for Phase III will be external costs. - Timothy Papp, CFO, Company Secretary

For the complete transcript of the earnings call, please refer to the full earnings call transcript.