Full Press Release Details
DURECT Corporation Announces Fourth Quarter and Year End 2008 Financial Results
CUPERTINO, CA, February 9, 2009/PRNewswire-FirstCall/ DURECT Corporation (Nasdaq: DRRX) announced today financial results for the three months and year ended December 31, 2008. Total revenues were $6.6 million for the three
months ended December 31, 2008 and December 31, 2007. Net loss for the three months ended December 31, 2008 was $19.5 million, compared to a net loss of $7.2 million for the same period in 2007; net loss in the fourth quarter of 2008
included a $13.5 million non-cash write-down associated with a research and development program (Chronogesic ) that we are no longer actively pursuing.
For the fiscal year ended December 31, 2008, total revenues were $26.0 million, compared to $30.7 million for the same period in 2007. Net loss for the year ended
December 31, 2008 was $45.1 million (including the $13.5 million write-down described above), compared to a net loss of $24.3 million for the same period in 2007.
At December 31, 2008, DURECT had cash and investments of $52.7 million, compared with cash and investments of $62.0 million at December 31, 2007, including restricted investments of $1.0 million at
December 31, 2008 and 2007. DURECT s net decrease in cash and investments during 2008 was $9.3 million, as compared to a net decrease in cash and investments during 2007 of $19.6 million.
DURECT continued to advance our late stage pipeline in 2008, licensed ELADUR on attractive terms including a $20 million upfront payment, and strengthened
our balance sheet through the elimination of our convertible debt, stated James E. Brown, D.V.M., President and CEO of DURECT. Our goals for 2009 include commencing the Phase III program with POSIDUR , advancing our other
development programs in clinical studies, and pursuing favorable collaborations around selected programs.
Highlights for DURECT in Fiscal Year
REMOXY, an investigational drug, is a long acting oral
formulation of oxycodone intended to treat moderate to severe pain. Based on DURECT s ORADUR technology, which is covered by issued patents and pending patent applications owned by
us, REMOXY is designed to resist common methods of prescription drug misuse and abuse.
POSIDUR is our post-operative
pain relief depot that utilizes our patented SABER technology to deliver bupivacaine to provide up to three days of pain relief after surgery. POSIDUR is licensed to Nycomed for commercialization in Europe and select other countries, and we have
retained commercialization rights in the US, Canada and Asia.
In September 2008, we entered into a development and license agreement with Alpharma Ireland Ltd.,
an affiliate of Alpharma, Inc., granting Alpharma exclusive worldwide rights to develop and commercialize ELADUR. This Agreement became effective in October 2008 after passing clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Under this agreement, Alpharma paid us an upfront license fee of $20 million in the fourth quarter of 2008, with possible additional payments of up to $93 million upon the achievement of predefined development and regulatory milestones spread over
multiple clinical indications and geographical territories as well as possible additional payments of up to $150 million in sales-based milestones. If ELADUR is commercialized, DURECT would also receive royalties on product sales. Alpharma will
control and fund the further development program. Alpharma, Inc., including its rights and obligations under our agreement, was acquired by King Pharmaceuticals in December 2008.
ELADUR is our proprietary transdermal patch intended to deliver bupivacaine for a period of up to three days from a single application.
is our proprietary transdermal patch intended to deliver sufentanil to chronic pain sufferers for a period of up to seven days from a single application.
Financial Guidance for 2009 and Major
Potential Milestones over the Next 12-18 Months
Earnings Conference Call
A live audio webcast of a conference call to discuss 2008 results will be broadcast live over the internet at 4:30 p.m. Eastern Time on February 9 and is available
by accessing DURECT s homepage at www.durect.com and clicking Investor Relations. If you are unable to participate during the live webcast, the call will be archived on DURECT s website under Audio Archive in the
Investor Relations section.
About DURECT Corporation
DURECT is an emerging specialty pharmaceutical company developing innovative drugs for pain and other chronic
diseases, with late-stage development programs including REMOXY , POSIDUR , ELADUR , and TRANSDUR -Sufentanil. DURECT s proprietary oral, transdermal and injectable
depot delivery technologies enable new indications and superior clinical/commercial attributes such as abuse deterrence, improved convenience, compliance, efficacy and safety for small molecule and biologic drugs. For more information, please visit
NOTE: POSIDUR , SABER , ORADUR , TRANSDUR , and ELADUR are trademarks of DURECT Corporation. Other referenced trademarks belong to their respective owners. REMOXY, POSIDUR, ELADUR and TRANSDUR-Sufentanil are drug candidates under
development and have not been approved for commercialization by the US Food and Drug Administration or other health authorities.
DURECT Forward-Looking Statement
The statements in this press release under the heading Financial Guidance for 2009 and Major Potential Milestones over the Next 12-18 Months, other statements regarding development and potential uses of
REMOXY, POSIDUR, ELADUR and TRANSDUR-Sufentanil, and potential milestone payments or royalties based on the sale of such products 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, delays and additional costs due to requirements imposed by regulatory agencies, DURECT s (and that of its third party
collaborators where applicable) difficulty or failure to obtain approvals from regulatory agencies with respect to its development activities and products, design, enroll, conduct and complete clinical trials, complete the design, development, and
manufacturing process development of the referenced product candidates, consummate collaborative agreements relating to our product candidates and technologies, manufacture and commercialize the referenced product candidates, obtain marketplace
acceptance of the referenced product candidates, avoid infringing patents held by other parties and secure and defend patents of our own, and 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 4, 2008 under the heading Risk Factors.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Collaborative research and development revenue | $ | 4,715 | $ | 4,559 | $ | 17,192 | $ | 22,417 | ||||||||
| Product revenue, net | 1,867 | 2,026 | 8,765 | 8,258 | ||||||||||||
| Total revenues | 6,582 | 6,585 | 25,957 | 30,675 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues (1) | 691 | 807 | 3,365 | 3,225 | ||||||||||||
| Research and development (1) | 8,456 | 9,502 | 39,411 | 38,342 | ||||||||||||
| Selling, general and administrative (1) | 3,684 | 3,262 | 15,462 | 13,618 | ||||||||||||
| Write down of deferred royalties and commercial rights | 13,480 | 13,480 | ||||||||||||||
| Amortization of intangible assets | 13 | 8 | 48 | 31 | ||||||||||||
| Total operating expenses | 26,324 | 13,579 | 71,766 | 55,216 | ||||||||||||
| Loss from operations | (19,742 | ) | (6,994 | ) | (45,809 | ) | (24,541 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest and other income | 262 | 753 | 1,547 | 3,545 | ||||||||||||
| Interest expense | (16 | ) | (475 | ) | (789 | ) | (2,625 | ) | ||||||||
| Debt conversion expense | (495 | ) | (718 | ) | ||||||||||||
| Net other income (expense) | 246 | (217 | ) | 758 | 202 | |||||||||||
| Net loss | $ | (19,496 | ) | $ | (7,211 | ) | $ | (45,051 | ) | $ | (24,339 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.24 | ) | $ | (0.10 | ) | $ | (0.58 | ) | $ | (0.35 | ) | ||||
| Shares used in computing basic and diluted net loss per share | 81,927 | 73,641 | 78,332 | 70,483 | ||||||||||||
| (1) Includes stock-based compensation related to the following: | ||||||||||||||||
| Cost of revenues | $ | 25 | $ | 32 | $ | 135 | $ | 130 | ||||||||
| Research and development | 1,308 | 995 | 5,575 | 4,286 | ||||||||||||
| Selling, general and administrative | 722 | 553 | 2,790 | 2,273 | ||||||||||||
| Total stock-based compensation | $ | 2,055 | $ | 1,580 | $ | 8,500 | $ | 6,689 |
CONDENSED BALANCE SHEETS
| As of December 31, 2008 | As of December 31, 2007 (1) | |||||
| (unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 29,445 | $ | 37,589 | ||
| Short-term investments | 20,836 | 19,710 | ||||
| Accounts receivable | 4,055 | 3,622 | ||||
| Inventories | 3,475 | 1,963 | ||||
| Prepaid expenses and other current assets | 1,849 | 1,904 | ||||
| Total current assets | 59,660 | 64,788 | ||||
| Property and equipment, net | 5,971 | 7,658 | ||||
| Goodwill | 6,399 | 6,399 | ||||
| Intangible assets, net | 157 | 180 | ||||
| Long-term investments | 1,362 | 3,697 | ||||
| Restricted Investments | 1,049 | 1,020 | ||||
| Other non-current assets | 276 | 278 | ||||
| Total assets | $ | 74,874 | $ | 84,020 | ||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,018 | $ | 1,834 | ||
| Accrued liabilities | 5,204 | 5,499 | ||||
| Contract research liability | 995 | 1,946 | ||||
| Interest payable on convertible notes | 61 | |||||
| Deferred revenue, current portion | 9,033 | 5,728 | ||||
| Equipment financing obligations, current portion | 43 | 38 | ||||
| Bonds payable, current portion | 240 | 225 | ||||
| Convertible subordinated notes due 2008 | 23,599 | |||||
| Other short-term liabilities | 148 | 158 | ||||
| Total current liabilities | 16,681 | 39,088 | ||||
| Bond payable and equipment financing obligations, noncurrent portion | 60 | 343 | ||||
| Deferred revenue, noncurrent portion | 21,118 | 9,268 | ||||
| Other long-term liabilities | 596 | 740 | ||||
| Stockholders equity | 36,419 | 34,581 | ||||
| Total liabilities and stockholders equity | $ | 74,874 | $ | 84,020 |
SOURCE DURECT Corporation
Matt Hogan, Chief Financial Officer, DURECT
Corporation, +1-408-777-4936