• Total Revenue: $1.9 million in Q3 2024, up from $1.7 million in Q3 2023.
• R&D Expense: $2.2 million in Q3 2024, down from $7.2 million in Q3 2023.
• SG&A Expenses: $3.2 million in Q3 2024, down from $3.8 million in Q3 2023.
• Cash and Investments: $10.5 million as of September 30, 2024.
• Cash Utilization: $5.3 million in Q3 2024.

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

Release Date: November 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 an increase in total revenues to $1.9 million in Q3 2024, up from $1.7 million in 2023, primarily due to higher product sales.
• R&D expenses significantly decreased to $2.2 million in Q3 2024 from $7.2 million in the previous year, attributed to lower clinical trial-related and employee costs.
• SG&A expenses were reduced to $3.2 million in Q3 2024 from $3.8 million in the prior year, mainly due to lower employee, professional services, and legal expenses.
• Durect Corp (NASDAQ:DRRX) has sufficient cash and investments of $10.5 million to fund operations through the first quarter of 2025.
• The company is making progress in initiating a Phase 3 clinical trial for larsucosterol in alcohol-associated hepatitis, with positive dialogue and agreement on trial design with the FDA.

Negative Points

• Durect Corp (NASDAQ:DRRX) experienced a decrease in revenue from collaborations, partially offsetting the increase in product sales.
• The company is facing the termination of the licensing agreement for POSIMIR by Innocoll, although it is not expected to have a material financial impact.
• Durect Corp (NASDAQ:DRRX) requires additional funding to initiate the Phase 3 trial for larsucosterol, with estimated costs between $20 million to $25 million.
• The company's cash utilization in Q3 2024 was $5.3 million, indicating a high burn rate.
• No royalty revenue was recognized from Innocoll in the third quarter, impacting potential income streams.

Q & A Highlights

Q: Are you targeting the same sites in the US for the Phase 3 trial as in the AHFIRM trial? A: Yes, we plan to include at least 60% to 70% of the AHFIRM trial sites in the US for our Phase 3 trial. We are currently working on confidentiality agreements and legal paperwork to expedite the process. - James Brown, President, CEO, Director and WeiQi Lin, EVP of Research and Development, Principal Scientist

Q: Were there any geographical differences in time to treatment within the US, or was it mainly a US versus ex-US issue? A: There were significant regional differences in time to treatment, which will be presented at the AASLD meeting. Within the US, there was some site-to-site variation, but the larger sample size in the US helped mitigate this. - WeiQi Lin, EVP of Research and Development, Principal Scientist

Q: Besides funding, what other preparations are needed for larsucosterol to enter Phase 3? A: Funding is the most critical aspect. We are currently establishing legal relationships and contracts with clinical sites and have selected our CRO. These preparations will allow us to start the trial quickly once funding is secured. - James Brown, President, CEO, Director

Q: Can you provide an estimated cost for the Phase 3 study? A: The estimated external cost for the Phase 3 trial is between $20 million to $25 million. Additionally, our burn rate is expected to be $3 million to $4 million per quarter once the trial is underway. - Timothy Papp, CFO, Company Secretary

Q: Were there any royalty revenues recognized from Innocoll in the third quarter? A: No, there were no royalty revenues recognized from Innocoll in the third quarter. - Timothy Papp, CFO, Company Secretary

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