Durect (DRRX) Q2 Earnings call transcript Aug 13, 2024
In DURECT Corporation's Second Quarter 2024 Earnings Conference Call, management provided updates on the company's financial performance, business developments, and plans for the future. The call was highlighted by a positive discussion about the company's ongoing efforts to bring larsucosterol, a potential treatment for alcohol-associated hepatitis (AH), to market.
Financial Performance
DURECT reported total revenues of $2.2 million for the second quarter of 2024, a slight increase from the previous year. The decrease in research and development (R&D) expenses, from $7.9 million in 2023 to $2.2 million in 2024, was attributed to lower clinical trial-related expenses, facility costs, and employee-related expenses. Selling, General and Administrative (SG&A) expenses also decreased, from $3.8 million in 2023 to $3 million in 2024, due to lower employee facility, market research, and professional services expenses. The company ended the quarter with $15.8 million in cash and investments, with a cash burn of $5.8 million. DURECT believes its cash on hand is sufficient to fund operations through the end of 2024.
Larsucosterol and Alcohol-Associated Hepatitis
The highlight of the call was the update on larsucosterol, a potential treatment for AH, which has shown promising results in the Phase IIb trial AHFIRM. The trial demonstrated a 41% reduction in mortality with the 30-milligram dose and a 35% reduction with the 90-milligram dose as compared with placebo. These results were even more impressive in U.S. patients, with reductions of 57% and 58% in the 90-day mortality for the 30 and 90-milligram arms, respectively. The safety profile of larsucosterol was also notable, with no serious adverse events in either arm and reductions in treatment-emergent adverse events for both active arms.
The FDA has granted breakthrough therapy designation for larsucosterol, recognizing its potential to provide a clinically meaningful survival benefit in AH patients. This designation allows for more intensive interaction with the FDA throughout the development process. DURECT is preparing to initiate a confirmatory Phase III clinical trial before the end of the year, with top-line data expected in the second half of 2026.
Future Outlook
The positive interaction with the FDA and the granting of breakthrough therapy designation for larsucosterol indicate a strong focus on this potential treatment for AH. DURECT's management expressed confidence in the product's potential to establish a new standard of care for this disease, which is currently responsible for tens of thousands of deaths and billions of dollars in healthcare costs annually in the U.S. The company's financial health, with a sufficient cash reserve and a focus on reducing operating expenses, positions it well for the upcoming Phase III trial.
In conclusion, DURECT Corporation's Second Quarter 2024 Earnings Conference Call presented a positive outlook for the company, with a focus on the potential of larsucosterol as a treatment for AH and the company's financial health. The granting of breakthrough therapy designation by the FDA underscores the potential impact of larsucosterol on the healthcare landscape, particularly in the treatment of AH. DURECT's commitment to bringing this potential treatment to market and its strategic focus on financial management position it well for the future.