Full Press Release Details
DURECT Corporation Announces Second Quarter 2007 Financial Results
CUPERTINO, Calif., August 7,
2007/PRNewswire-FirstCall/ DURECT Corporation (Nasdaq: DRRX) announced today financial results for the three months ended June 30, 2007. Total revenues were $13.4 million for the three months ended June 30, 2007, compared to $6.1
million for the same period in 2006; revenues in the second quarter of 2007 include the earning of an $8.0 million milestone payment under our Nycomed collaboration related to the clinical development of POSIDUR . Net loss for the three months
ended June 30, 2007 was $479,000, compared to a net loss of $8.7 million for the same period in 2006. Cash used in operating activities was $6.1 million for the three months ended June 30, 2007, compared to $10.2 million in the three
months ended June 30, 2006. At June 30, 2007, we had cash and investments of $65.8 million, including $1.3 million in restricted investments, compared with cash and investments of $81.6 million at December 31, 2006. Cash flow in the
second quarter of 2007 and the reported cash and investments balance at June 30, 2007 do not reflect the $8.0 million milestone payment that had been earned but not received as of June 30, 2007; this payment was received on August 1,
Based on our financial results in the first half of 2007, the receipt of an $8.0 million milestone payment from Nycomed and a reexamination of
anticipated financial results in the second half of 2007, we are now providing revised financial guidance for cash burn in 2007 of approximately $25-27 million as compared to prior guidance of $32-36 million. This reforecast continues to assume
no major new collaborations during 2007, although we are pursuing potential collaborations on multiple fronts including ELADUR, TRANSDUR-Sufentanil for Europe and Asia, POSIDUR for Asia, as well as various other programs.
Our development programs continued to progress in the second quarter of this year, as evidenced by positive results from our POSIDUR Phase IIb hernia study,
completion of enrollment in the Remoxy pivotal Phase III trial and the initiation by Endo of their Phase II program with our TRANSDUR -Sufentanil patch, stated James E. Brown, D.V.M., President and CEO of DURECT. We expect
further clinical developments in the second half of 2007 with respect to POSIDUR, Remoxy and ELADUR.
Recent Company Highlights:
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 DURECT has retained commercialization rights in the US, Canada and Asia.
Remoxy, an abuse-resistant long-acting form of oxycodone based on our ORADUR technology intended
for the treatment of chronic pain, is currently in a pivotal Phase III trial in accordance with a Special Protocol Assessment (SPA) with the FDA. Remoxy is licensed to Pain Therapeutics, which has in turn sublicensed commercialization rights to King
TRANSDUR-Sufentanil is our proprietary transdermal patch intended to provide sufentanil for a period of up to seven days
from a single application for chronic pain sufferers. TRANSDUR-Sufentanil is licensed to Endo for commercialization in the US and Canada, and DURECT has retained commercialization rights for the rest of the world.
ELADUR is our proprietary transdermal patch intended to provide bupivacaine for a period of up to three days from a single application. DURECT retains full commercial rights to this drug candidate.
Earnings Conference Call
A live audio webcast of a conference call
to discuss second quarter 2007 results will be broadcast live over the internet at 4:30 p.m. Eastern Time 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 Corporation is an emerging specialty pharmaceutical company developing
pharmaceutical systems based on its proprietary drug delivery platform technologies. The Company currently has a number of late-stage pharmaceutical products in development addressing large markets in pain management, with a number of research
programs underway targeting chronic disease and other therapeutic areas. For more information, please visit www.durect.com.
SABER , ORADUR , TRANSDUR , and ELADUR are trademarks of DURECT Corporation. Other referenced trademarks belong to their respective owners.
DURECT Forward-Looking Statement
The statements in this press release regarding our products in development, product development plans, our
intended end-of-Phase II meeting with the FDA and other anticipated regulatory, clinical and development milestones and timing thereof, future clinical trial results, our intended emergence as a specialty pharmaceutical company and anticipated
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,
our (and that of our 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, manufacture and commercialize the product candidate and manage and obtain capital to fund our growth, operations and expenses. Further
information regarding these and other risks is included in our Form 10-Q filed on May 9, 2007 under the heading Risk Factors.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Collaborative research and development revenue | $ | 3,408 | $ | 4,048 | $ | 6,866 | $ | 7,106 | ||||||||
| Milestone revenue | 8,000 | 8,000 | ||||||||||||||
| Product revenue, net | 2,024 | 2,060 | 4,292 | 4,213 | ||||||||||||
| Total revenues | 13,432 | 6,108 | 19,158 | 11,319 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues (1) | 778 | 770 | 1,638 | 1,599 | ||||||||||||
| Research and development (1) | 9,630 | 8,549 | 19,982 | 15,713 | ||||||||||||
| Selling, general and administrative (1) | 3,683 | 3,189 | 7,221 | 6,194 | ||||||||||||
| Amortization of intangible assets | 8 | 94 | 15 | 394 | ||||||||||||
| Total operating expenses | 14,099 | 12,602 | 28,856 | 23,900 | ||||||||||||
| Loss from operations | (667 | ) | (6,494 | ) | (9,698 | ) | (12,581 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest and other income | 908 | 978 | 1,886 | 1,884 | ||||||||||||
| Interest expense | (720 | ) | (932 | ) | (1,434 | ) | (2,009 | ) | ||||||||
| Debt conversion expense | (2,287 | ) | (2,287 | ) | ||||||||||||
| Net other income (expense) | 188 | (2,241 | ) | 452 | (2,412 | ) | ||||||||||
| Net loss | $ | (479 | ) | $ | (8,735 | ) | $ | (9,246 | ) | $ | (14,993 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.01 | ) | $ | (0.14 | ) | $ | (0.13 | ) | $ | (0.24 | ) | ||||
| Shares used in computing basic and diluted net loss per share | 69,364 | 64,207 | 69,298 | 63,040 | ||||||||||||
| (1) Includes stock-based compensation related to the following: | ||||||||||||||||
| Cost of revenues | 33 | $ | 18 | $ | 67 | $ | 26 | |||||||||
| Research and development | 1,097 | 697 | 2,253 | 1,311 | ||||||||||||
| Selling, general and administrative | 555 | 323 | 1,223 | 644 | ||||||||||||
| Total stock-based compensation | $ | 1,685 | $ | 1,038 | $ | 3,543 | $ | 1,981 |
CONDENSED BALANCE SHEETS
| As of June 30, 2007 | As of December 31, 2006 (1) | |||||
| (unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 32,231 | $ | 41,554 | ||
| Short-term investments | 29,342 | 28,297 | ||||
| Accounts receivable | 11,658 | 2,152 | ||||
| Inventories | 2,039 | 2,052 | ||||
| Prepaid expenses and other current assets | 2,054 | 1,744 | ||||
| Total current assets | 77,324 | 75,799 | ||||
| Property and equipment, net | 7,769 | 7,451 | ||||
| Goodwill | 6,399 | 6,399 | ||||
| Intangible assets, net | 96 | 111 | ||||
| Long-term investments | 2,947 | 10,472 | ||||
| Restricted Investments | 1,284 | 1,284 | ||||
| Other non-current assets | 740 | 969 | ||||
| Total assets | $ | 96,559 | $ | 102,485 | ||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,123 | $ | 864 | ||
| Accrued liabilities | 5,210 | 4,522 | ||||
| Contract research liability | 2,168 | 1,624 | ||||
| Interest payable on convertible notes | 97 | 97 | ||||
| Deferred revenue, current portion | 5,324 | 5,348 | ||||
| Equipment financing obligations, current portion | 36 | 34 | ||||
| Bonds payable, current portion | 210 | 210 | ||||
| Other short-term liabilities | 141 | |||||
| Total current liabilities | 14,309 | 12,699 | ||||
| Bond payable and equipment financing obligations, noncurrent portion | 587 | 606 | ||||
| Convertible subordinated notes due 2008 | 37,337 | 37,337 | ||||
| Deferred revenue, noncurrent portion | 11,887 | 14,507 | ||||
| Other long-term liabilities | 498 | 304 | ||||
| Stockholders equity | 31,941 | 37,032 | ||||
| Total liabilities and stockholders equity | $ | 96,559 | $ | 102,485 |
SOURCE DURECT Corporation
Matthew J. Hogan, Chief Financial Officer, DURECT
Corporation, +1-408-777-4936
Jeremiah Hall, Senior Vice President, +415 677-2700, jeremiah.hall@fkhealth.com