DURECT (DRRX) 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 05, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	DRRX
Entity Registrant Name	DURECT CORP
Entity Central Index Key	1,082,038
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		141,966,536

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 4,272	$ 5,404
Short-term investments	12,406	19,600
Accounts receivable (net of allowances of $87 at March 31, 2017 and $73 at December 31, 2016)	2,076	1,154
Inventories	3,462	3,782
Prepaid expenses and other current assets	2,905	2,486
Total current assets	25,121	32,426
Property and equipment (net of accumulated depreciation of $21,488 and $21,376 at March 31, 2017 and December 31, 2016, respectively)	1,191	1,297
Goodwill	6,399	6,399
Long-term restricted investments	150	150
Other long-term assets	236	236
Total assets	33,097	40,508
Current liabilities:
Accounts payable	1,138	2,086
Accrued liabilities	3,289	5,060
Contract research liabilities	787	783
Deferred revenue, current portion	1,016	968
Term loan, current portion, net	1,272	19,853
Total current liabilities	7,502	28,750
Deferred revenue, non-current portion	1,822	1,879
Term loan, non-current portion, net	18,597
Other long-term liabilities	1,929	1,541
Commitments and contingencies
Stockholders’ equity:
Common stock	14	14
Additional paid-in capital	451,429	448,404
Accumulated other comprehensive income (loss)	(5)	(3)
Accumulated deficit	(448,191)	(440,077)
Stockholders’ equity	3,247	8,338
Total liabilities and stockholders’ equity	$ 33,097	$ 40,508

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Allowances for accounts receivable	$ 87	$ 73
Accumulated depreciation on property and equipment	$ 21,488	$ 21,376

Condensed Statements of Compreh

Condensed Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Collaborative research and development and other revenue	$ 434	$ 419
Product revenue, net	4,133	3,189
Total revenues	4,567	3,608
Operating expenses:
Cost of product revenues	1,543	1,242
Research and development	7,548	6,625
Selling, general and administrative	3,043	3,062
Total operating expenses	12,134	10,929
Loss from operations	(7,567)	(7,321)
Other income (expense):
Interest and other income	36	27
Interest expense	(583)	(558)
Net other income (expense)	(547)	(531)
Net loss	(8,114)	(7,852)
Net change in unrealized gain (loss) on available-for-sale securities, net of reclassification adjustments and taxes	(2)	17
Total comprehensive loss	$ (8,116)	$ (7,835)
Net loss per share
Basic	$ (0.06)	$ (0.06)
Diluted	$ (0.06)	$ (0.06)
Weighted-average shares used in computing net loss per share
Basic	141,815	122,149
Diluted	141,815	122,149

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net loss	$ (8,114)	$ (7,852)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	112	101
Stock-based compensation	665	710
Amortization of debt issuance cost	16	34
Net accretion/amortization on investments	(42)	(54)
Changes in assets and liabilities:
Accounts receivable	(922)	500
Inventories	320	(91)
Prepaid expenses and other assets	(419)	68
Accounts payable	(948)	(292)
Accrued and other liabilities	220	827
Contract research liabilities	4	(121)
Deferred revenue	(9)	(215)
Total adjustments	(1,003)	1,467
Net cash used in operating activities	(9,117)	(6,385)
Cash flows from investing activities
Purchases of property and equipment	(6)	(12)
Purchases of available-for-sale securities		(5,132)
Proceeds from maturities of available-for-sale securities	7,234	10,479
Net cash provided by investing activities	7,228	5,335
Cash flows from financing activities
Payments on equipment financing obligations	(3)	(6)
Net proceeds from issuances of common stock	760	1,326
Net cash provided by financing activities	757	1,320
Net (decrease) increase in cash and cash equivalents	(1,132)	270
Cash and cash equivalents, beginning of the period	5,404	3,583
Cash and cash equivalents, end of the period	$ 4,272	$ 3,853

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies. Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at March 31, 2017, the operating results and comprehensive loss for the three months ended March 31, 2017 and 2016, and cash flows for the three months ended March 31, 2017 and 2016. The balance sheet as of December 31, 2016 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Liquidity and Need to Raise Additional Capital As of March 31, 2017, the Company had an accumulated deficit of $448.2 million as well as negative cash flows from operating activities. In May 2017, the Company signed an agreement with Sandoz AG (Sandoz) whereby Sandoz will have the exclusive commercialization rights to POSIMIR ® ® There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected. Inventories Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. In addition, these circumstances may cause the Company to record a liability related to minimum purchase agreements that the Company has in place for raw materials. As of March 31, 2017, the remaining carrying value of the excipients in the Company’s inventory was $626,000. In addition, the Company has remaining unrecorded future purchase commitments totaling $1.0 million through 2018. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory and a reserve for future purchase commitments. The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782 Revenue Recognition Revenue from the sale of products is recognized when there is persuasive evidence that an arrangement exists, the product is shipped and title transfers to customers, provided no continuing obligation on the Company’s part exists, the price is fixed or determinable and the collectability of the amounts owed is reasonably assured. The Company enters into license and collaboration agreements under which it may receive upfront license fees, research funding and contingent milestone payments and royalties. The Company’s deliverables under these arrangements typically consist of granting licenses to intellectual property rights and providing research and development services. The accounting standards contain a presumption that separate contracts entered into at or near the same time with the same entity or related parties were negotiated as a package and should be evaluated as a single agreement. Research and development revenue related to services performed under the collaborative arrangements with the Company’s third-party collaborators is recognized as the related research and development services are performed. These research payments received under each respective agreement are not refundable and are generally based on reimbursement of qualified expenses, as defined in the agreements. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. Milestone payments under collaborative arrangements are triggered either by the results of the Company’s research and development efforts or by specified sales results by a third-party collaborator. Milestones related to the Company’s development-based activities may include initiation of various phases of clinical trials, successful completion of a phase of development or results from a clinical trial, acceptance of a New Drug Application by the FDA or an equivalent filing with an equivalent regulatory agency in another territory, or regulatory approval by the FDA or by an equivalent regulatory agency in another territory. Due to the uncertainty involved in meeting these development-based milestones, the development-based milestones are considered to be substantial (i.e., not just achieved through passage of time) at the inception of the collaboration agreement. In addition, the amounts of the payments assigned thereto are considered to be commensurate with the enhancement of the value of the delivered intellectual property as a result of the Company’s performance. The Company’s involvement is generally necessary to the achievement of development-based milestones. The Company would account for development-based milestones as revenue upon achievement of the substantive milestone events. Milestones related to sales-based activities may be triggered upon events such as the first commercial sale of a product or when sales first achieve a defined level. Under the Company’s collaborative agreements, the Company’s third-party collaborators will take the lead in commercialization activities and the Company is typically not involved in the achievement of sales-based milestones. These sales-based milestones would be achieved after the completion of the Company’s development activities. The Company would account for the sales-based milestones in the same manner as royalties, with revenue recognized upon achievement of the milestone. In addition, upon the achievement of either development-based or sales-based milestone events, the Company has no future performance obligations related to any milestone payments. Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Condensed Statements of Comprehensive Loss. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. Options to purchase approximately 26.3 million and 20.4 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016, respectively, as the effect would be anti-dilutive. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which amends the guidance in former ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). The standard will be effective for the Company in the first quarter of 2018. The Company has not yet completed its final analysis of the impact of this guidance. To date, the Company’s revenues have been derived from product sales and from license and collaboration agreements. Based on the Company’s preliminary analysis, it does not currently anticipate a material quantitative impact on product revenue as the timing of revenue recognition for product sales is not expected to significantly change. For the Company’s license and collaboration agreements, the consideration the Company is eligible to receive under these agreements typically consists of upfront payments, research and development funding, milestone payments, and royalties. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process under the new standard. The Company continues to review the impact that this new standard will have on collaboration and license arrangements as well as on its financial statement disclosures. The Company has not yet concluded as to the method it will select to adopt the standard. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This ASU becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. This ASU is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial statements.

Strategic Agreements

Strategic Agreements	3 Months Ended
	Mar. 31, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Strategic Agreements	Note 2. Strategic Agreements The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended March 31, 2017 2016 Collaborator Santen Pharmaceutical Co. Ltd. (Santen) (1) $ 94 $ 162 Zogenix, Inc. (Zogenix) (2) 44 246 Pain Therapeutics, Inc. (Pain Therapeutics) 24 4 Other collaborators 272 7 Total collaborative research and development and other revenue $ 434 $ 419 (1) Amounts related to ratable recognition of upfront fees were $57,000 for each of the three months ended March 31, 2017 and 2016. (2) Amounts related to ratable recognition of upfront fees were $42,000 and $52,000 for the three months ended March 31, 2017 and 2016, respectively. Agreement with Pain Therapeutics, Inc. In December 2002, the Company entered into an exclusive agreement with Pain Therapeutics, Inc. (Pain Therapeutics) to develop and commercialize on a worldwide basis REMOXY ER and other oral sustained release, abuse deterrent opioid products incorporating four specified opioid drugs, using the ORADUR technology. Total collaborative research and development revenue recognized under the agreements with Pain Therapeutics was $24,000 and $4,000 for the three months ended March 31, 2017 and 2016, respectively. The cumulative aggregate payments received by the Company from Pain Therapeutics as of March 31, 2017 were $40.3 million under this agreement. Under the terms of this agreement, Pain Therapeutics paid the Company an upfront license fee of $1.0 million, with the potential for an additional $3.0 million in performance milestone payments based on the successful development and approval of REMOXY ER. Of these potential milestones, all $3.0 million are development-based milestones. There are no sales-based milestones under the agreement. As of March 31, 2017, the Company had received $1.5 million in cumulative milestone payments. In March 2016, Pain Therapeutics resubmitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA), and in September 2016, Pain Therapeutics received a Complete Response Letter from the FDA for REMOXY ER. Based on its review, the FDA has determined that the NDA cannot be approved in its present form and specifies additional actions and data that are needed for drug approval. Total collaborative research and development revenue recognized for REMOXY-related work performed by the Company for Pain Therapeutics was $24,000 and $4,000 for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017 and 2016, the Company recognized zero and $279,000 of product revenue, respectively, related to key excipients for REMOXY ER and the associated cost of goods sold was zero and $124,000, respectively. Pursuant to the Company’s 2002 agreement with Pain Therapeutics, the Company is to be the exclusive supplier of certain defined excipients for products in the collaboration. Agreement with Zogenix, Inc. On July 11, 2011, the Company and Zogenix, Inc. (Zogenix) entered into a Development and License Agreement (the Zogenix Agreement). The Company and Zogenix had previously been working together under a feasibility agreement pursuant to which the Company’s research and development costs were reimbursed by Zogenix. Under the Zogenix Agreement, Zogenix will be responsible for the clinical development and commercialization of a proprietary, long-acting injectable formulation of risperidone using the Company’s SABER controlled-release formulation technology potentially in combination with Zogenix’s DosePro® needle-free, subcutaneous drug delivery system. DURECT will be responsible for non-clinical, formulation and CMC development activities. The Company will be reimbursed by Zogenix for its research and development efforts on the product. Zogenix paid a non-refundable upfront fee to the Company of $2.25 million in July 2011. The Company’s research and development services are considered integral to utilizing the licensed intellectual property and, accordingly, the deliverables are accounted for as a single unit of accounting. The $2.25 million upfront fee is being recognized as collaborative research and development revenue ratably over the term of the Company’s continuing research and development involvement with Zogenix with respect to this product candidate. Zogenix is obligated to pay the Company up to $103 million in total future milestone payments with respect to the product subject to and upon the achievement of various developments, regulatory and sales milestones. Of these potential milestones, $28 million are development-based milestones (none of which has been achieved as of March 31, 2017), and $75 million are sales-based milestones (none of which has been achieved as of March 31, 2017). Zogenix is also required to pay a mid single-digit to low double-digit percentage patent royalty on annual net sales of the product determined on a jurisdiction-by-jurisdiction basis. The patent royalty term is equal to the later of the expiration of all DURECT technology patents or joint patent rights in a particular jurisdiction, the expiration of marketing exclusivity rights in such jurisdiction, or 15 years from first commercial sale in such jurisdiction. After the patent royalty term, Zogenix will continue to pay royalties on annual net sales of the product at a reduced rate for so long as Zogenix continues to sell the product in the jurisdiction. Zogenix is also required to pay to the Company a tiered percentage of fees received in connection with any sublicense of the licensed rights. The Company granted to Zogenix an exclusive worldwide license, with sub-license rights, to the Company’s intellectual property rights related to the Company’s proprietary polymeric and non-polymeric controlled-release formulation technology to make and have made, use, offer for sale, sell and import risperidone products, where risperidone is the sole active agent, for administration by injection in the treatment of schizophrenia, bipolar disorder or other psychiatric related disorders in humans. The Company retains the right to supply Zogenix’s Phase III clinical trial and commercial product requirements on the terms set forth in the Zogenix Agreement. Zogenix may terminate the Zogenix Agreement without cause at any time upon prior written notice, and either party may terminate the Zogenix Agreement upon certain circumstances including written notice of a material uncured breach. The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of March 31, 2017 were $20.1 million under these agreements. Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 42 $ 52 Research and development expenses reimbursable by Zogenix 2 194 Total collaborative research and development revenue $ 44 $ 246 Agreement with Santen Pharmaceutical Co., Ltd. On December 11, 2014, the Company and Santen Pharmaceutical Co., Ltd. (Santen) entered into a definitive agreement (the Santen Agreement). Pursuant to the Santen Agreement, the Company granted Santen an exclusive worldwide license to the Company’s proprietary SABER formulation platform and other intellectual property to develop and commercialize a sustained release product utilizing the Company’s SABER technology to deliver an ophthalmology drug. Santen controls and funds the development and commercialization program, and the parties established a joint management committee to oversee, review and coordinate the development activities of the parties under the Santen Agreement. In connection with the Santen agreement, Santen agreed to pay the Company an upfront fee of $2.0 million in cash and to make contingent cash payments to the Company of up to $76.0 million upon the achievement of certain milestones, of which $13.0 million are development-based milestones and $63.0 million are commercialization-based milestones including milestones requiring the achievement of certain product sales targets (none of which has been achieved as of March 31, 2017). Santen will also pay for certain Company costs incurred in the development of the licensed product. If the product is commercialized, the Company would also receive a tiered royalty on annual net product sales ranging from single-digit to the low double digits, determined on a country-by-country basis. As of March 31, 2017, the cumulative aggregate payments received by the Company under this agreement were $3.3 million. The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 57 $ 57 Research and development expenses reimbursable by Santen 37 105 Total collaborative research and development revenue $ 94 $ 162

Financial Instruments

Financial Instruments	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Financial Instruments	Note 3. Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments are valued using quoted prices in active markets or based upon other observable inputs. Money market funds are classified as Level 1 financial assets. Certificates of deposit, commercial paper, corporate debt securities, and U.S. Government agency securities are classified as Level 2 financial assets. The fair value of the Level 2 assets is estimated using pricing models using current observable market information for similar securities. The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The fair value of commercial paper is based upon the time to maturity and discounted using the three-month treasury bill rate. The average remaining maturity of the Company’s Level 2 investments as of March 31, 2017 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1 or P1 for commercial paper. The following is a summary of available-for-sale securities as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 40 $ — $ — $ 40 Certificates of deposit 150 — — 150 Commercial paper 3,078 — — 3,078 Corporate debt 2,631 — (1 ) 2,630 U.S. Government agencies 9,780 — (4 ) 9,776 $ 15,679 $ — $ (5 ) $ 15,674 Reported as: Cash and cash equivalents $ 3,118 $ — $ — $ 3,118 Short-term investments 12,411 — (5 ) 12,406 Long-term restricted investments 150 — — 150 $ 15,679 $ — $ (5 ) $ 15,674 December 31, 2016 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 693 $ — $ — $ 693 Certificates of deposit 150 — — 150 Commercial paper 4,947 — — 4,947 Corporate debt 2,644 — (1 ) 2,643 U.S. Government agencies 14,461 1 (3 ) 14,459 $ 22,895 $ 1 $ (4 ) $ 22,892 Reported as: Cash and cash equivalents $ 3,142 $ — $ — $ 3,142 Short-term investments 19,603 1 (4 ) 19,600 Long-term restricted investments 150 — — 150 $ 22,895 $ 1 $ (4 ) $ 22,892 The following is a summary of the cost and estimated fair value of available-for-sale securities at March 31, 2017, by contractual maturity (in thousands): March 31, 2017 Amortized Cost Estimated Fair Value Mature in one year or less $ 15,639 $ 15,634 Mature after one year through two years — — $ 15,639 $ 15,634 There were no securities that have had an unrealized loss for more than 12 months as of March 31, 2017. As of March 31, 2017, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	Note 4. Stock-Based Compensation In the first quarter of 2017, the Company elected to adopt ASU 2016-09, Improvement to Employee Share-based Payment, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross share compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company elected to account for forfeitures as they occur and therefore, share-based compensation expense for the three months ended March 31, 2017 has been calculated based on actual forfeitures, rather than our previous approach which was net of estimated forfeitures. The Company’s adoption of ASU 2016-09 in the first quarter of 2017 did not have a material impact on its financial statements. As of March 31, 2017, the Company has three stock-based compensation plans. The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended March 31, 2017 2016 Cost of product revenues $ 28 $ 27 Research and development 369 353 Selling, general and administrative 268 330 Total stock-based compensation $ 665 $ 710 As of March 31, 2017 and December 31, 2016, $14,000 of stock-based compensation cost was capitalized in inventory on the Company’s balance sheets. The Company uses the Black-Scholes option pricing model to value its stock options. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. The Company considered its historical volatility in developing its estimate of expected volatility. The Company used the following assumptions to estimate the fair value of stock options granted (including fully vested options issued in January 2017 and January 2016) and shares purchased under its employee stock purchase plan for the three and nine months ended March 31, 2017 and 2016: Stock Options Employee Stock Purchase Plan Three months ended March 31, Three months ended March 31, 2017 2016 2017 2016 Risk-free rate 2.2-2.5% 1.6-1.9% 0.6% 0.3% Expected dividend yield — — — — Expected life of option (in years) 6.8-10.0 6.5-9.3 0.5 0.5 Volatility 75-82% 77-83% 81% 68%

Term Loan

Term Loan	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Term Loan	Note 5. Term Loan In July 2016, the Company renegotiated the terms of its $20.0 million secured single-draw term loan with Oxford Finance LLC (Oxford Finance) with such renegotiated terms being formalized in a new Loan and Security Agreement (the “2016 Loan Agreement”). The 2016 Loan Agreement supersedes the 2014 Loan Agreement with Oxford Finance and the 2015 amendment to such agreement. The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018 and continuing through the maturity date of the term loan of August 1, 2020. The 2016 Loan Agreement also provides for a floating interest rate (7.95% initially) based on an index rate plus a spread, a $150,000 facility fee that was paid at closing and an additional payment equal to 9.25% of the principal amount of the term loan, which is due when the term loan becomes due or upon the prepayment of the facility. If the Company elects to prepay the loan, there is also a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing of prepayment. The facility fee and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheet and together with the final $1.9 million payment and interest rate payments are being amortized to interest expense during the life of the term loan using the effective interest rate method. The term loan is secured by substantially all of the assets of the Company, except that the collateral does not include any intellectual property (including licensing, collaboration and similar agreements relating thereto), and certain other excluded assets. The 2016 Loan Agreement contains customary representations, warranties and covenants by the Company, which covenants limit the Company’s ability to convey, sell, lease, transfer, assign or otherwise dispose of certain assets of the Company; engage in any business other than the businesses currently engaged in by the Company or reasonably related thereto; liquidate or dissolve; make certain management changes; undergo certain change of control events; create, incur, assume, or be liable with respect to certain indebtedness; grant certain liens; pay dividends and make certain other restricted payments; make certain investments; and make payments on any subordinated debt. The 2016 Loan Agreement also contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations of the Company under the 2016 Loan Agreement and the occurrence of a material adverse change which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan, or a material impairment in the perfection or priority of lender’s lien in the collateral or in the value of such collateral. In the event of default by the Company under the 2016 Loan Agreement, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the 2016 Loan Agreement, which could harm the Company’s financial condition. The conditionally exercisable call option related to the event of default is considered to be an embedded derivative which is required to be bifurcated and accounted for as a separate financial instrument. In the periods presented, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. As of March 31, 2017, the Company was in compliance with all material covenants under the Loan Agreement and the Company believes that there have been no material adverse changes. In accordance with ASC 470-10-45-2, the term loan had been reclassified to a current liability from a non-current liability on the Company’s balance sheet as of December 31, 2016 due to recurring losses, liquidity concerns and a subjective acceleration clause in the Company’s 2016 Loan Agreement. In May 2017, the Company signed an agreement with Sandoz whereby Sandoz will have the exclusive commercialization rights to POSIMIR (SABER-bupivacaine) in the United States. Assuming expiration or termination of the application waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) and the closing of the Company’s license agreement with Sandoz, the Company has sufficient resources to meet its plans for the next twelve months following the issuance of these financial statements. As a result, that portion of the term loan that is due more than 12 months after March 31, 2017 has been reclassified to a non-current liability from a current liability as of March 31, 2017. The fair value of the term loan approximates the carrying value. Future maturities and interest payments under the term loan as of March 31, 2017, are as follows (in thousands): Nine months ended December 31, 2017 $ 1,215 2018 8,698 2019 8,724 2020 6,641 Total minimum payments 25,278 Less amount representing interest (5,278 ) Gross balance of term loan 20,000 Less unamortized debt discount (131 ) Carrying value of term loan 19,869 Less term loan, current portion, net (1,272 ) Term loan, non-current portion, net 18,597

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stockholders' Equity	Note 6. Stockholders’ Equity During the three months ended March 31, 2017, the Company raised net proceeds (net of commissions) of approximately $731,000 from the sale of 573,612 shares of the Company’s common stock in the open market at a weighted average price of $1.31 per share, through its Controlled Equity Offering sales agreement with Cantor Fitzgerald, entered into in November 2015 (Controlled Equity Offering). As of May 5, 2017, the Company had up to approximately $29.5 million of common stock available for sale under the Controlled Equity Offering program and approximately $67.8 million of common stock available for sale under its shelf registration statement.

Subsequent Event

Subsequent Event	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Event	Note 7. Subsequent Event In May 2017, the Company and Sandoz entered into a license agreement to develop and market POSIMIR in the United States. POSIMIR is the Company’s investigational post-operative pain relief depot currently in Phase III clinical development in the United States that utilizes the Company’s patented SABER ®

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies.
Basis of Presentation	Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at March 31, 2017, the operating results and comprehensive loss for the three months ended March 31, 2017 and 2016, and cash flows for the three months ended March 31, 2017 and 2016. The balance sheet as of December 31, 2016 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.
Liquidity and Need to Raise Additional Capital	Liquidity and Need to Raise Additional Capital As of March 31, 2017, the Company had an accumulated deficit of $448.2 million as well as negative cash flows from operating activities. In May 2017, the Company signed an agreement with Sandoz AG (Sandoz) whereby Sandoz will have the exclusive commercialization rights to POSIMIR ® ® There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected.
Inventories	Inventories Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. In addition, these circumstances may cause the Company to record a liability related to minimum purchase agreements that the Company has in place for raw materials. As of March 31, 2017, the remaining carrying value of the excipients in the Company’s inventory was $626,000. In addition, the Company has remaining unrecorded future purchase commitments totaling $1.0 million through 2018. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory and a reserve for future purchase commitments. The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782
Revenue Recognition	Revenue Recognition Revenue from the sale of products is recognized when there is persuasive evidence that an arrangement exists, the product is shipped and title transfers to customers, provided no continuing obligation on the Company’s part exists, the price is fixed or determinable and the collectability of the amounts owed is reasonably assured. The Company enters into license and collaboration agreements under which it may receive upfront license fees, research funding and contingent milestone payments and royalties. The Company’s deliverables under these arrangements typically consist of granting licenses to intellectual property rights and providing research and development services. The accounting standards contain a presumption that separate contracts entered into at or near the same time with the same entity or related parties were negotiated as a package and should be evaluated as a single agreement. Research and development revenue related to services performed under the collaborative arrangements with the Company’s third-party collaborators is recognized as the related research and development services are performed. These research payments received under each respective agreement are not refundable and are generally based on reimbursement of qualified expenses, as defined in the agreements. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. Milestone payments under collaborative arrangements are triggered either by the results of the Company’s research and development efforts or by specified sales results by a third-party collaborator. Milestones related to the Company’s development-based activities may include initiation of various phases of clinical trials, successful completion of a phase of development or results from a clinical trial, acceptance of a New Drug Application by the FDA or an equivalent filing with an equivalent regulatory agency in another territory, or regulatory approval by the FDA or by an equivalent regulatory agency in another territory. Due to the uncertainty involved in meeting these development-based milestones, the development-based milestones are considered to be substantial (i.e., not just achieved through passage of time) at the inception of the collaboration agreement. In addition, the amounts of the payments assigned thereto are considered to be commensurate with the enhancement of the value of the delivered intellectual property as a result of the Company’s performance. The Company’s involvement is generally necessary to the achievement of development-based milestones. The Company would account for development-based milestones as revenue upon achievement of the substantive milestone events. Milestones related to sales-based activities may be triggered upon events such as the first commercial sale of a product or when sales first achieve a defined level. Under the Company’s collaborative agreements, the Company’s third-party collaborators will take the lead in commercialization activities and the Company is typically not involved in the achievement of sales-based milestones. These sales-based milestones would be achieved after the completion of the Company’s development activities. The Company would account for the sales-based milestones in the same manner as royalties, with revenue recognized upon achievement of the milestone. In addition, upon the achievement of either development-based or sales-based milestone events, the Company has no future performance obligations related to any milestone payments.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Condensed Statements of Comprehensive Loss.
Net Loss Per Share	Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. Options to purchase approximately 26.3 million and 20.4 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016, respectively, as the effect would be anti-dilutive.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which amends the guidance in former ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). The standard will be effective for the Company in the first quarter of 2018. The Company has not yet completed its final analysis of the impact of this guidance. To date, the Company’s revenues have been derived from product sales and from license and collaboration agreements. Based on the Company’s preliminary analysis, it does not currently anticipate a material quantitative impact on product revenue as the timing of revenue recognition for product sales is not expected to significantly change. For the Company’s license and collaboration agreements, the consideration the Company is eligible to receive under these agreements typically consists of upfront payments, research and development funding, milestone payments, and royalties. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process under the new standard. The Company continues to review the impact that this new standard will have on collaboration and license arrangements as well as on its financial statement disclosures. The Company has not yet concluded as to the method it will select to adopt the standard. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This ASU becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. This ASU is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial statements.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Summary of Components of Inventories	The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782

Strategic Agreements (Tables)

Strategic Agreements (Tables)	3 Months Ended
	Mar. 31, 2017
Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators	The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended March 31, 2017 2016 Collaborator Santen Pharmaceutical Co. Ltd. (Santen) (1) $ 94 $ 162 Zogenix, Inc. (Zogenix) (2) 44 246 Pain Therapeutics, Inc. (Pain Therapeutics) 24 4 Other collaborators 272 7 Total collaborative research and development and other revenue $ 434 $ 419 (1) Amounts related to ratable recognition of upfront fees were $57,000 for each of the three months ended March 31, 2017 and 2016. (2) Amounts related to ratable recognition of upfront fees were $42,000 and $52,000 for the three months ended March 31, 2017 and 2016, respectively.
Agreement with Zogenix, Inc. [Member]
Summary of Collaborative Research and Development Revenue Recognized	The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of March 31, 2017 were $20.1 million under these agreements. Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 42 $ 52 Research and development expenses reimbursable by Zogenix 2 194 Total collaborative research and development revenue $ 44 $ 246
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Summary of Collaborative Research and Development Revenue Recognized	The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 57 $ 57 Research and development expenses reimbursable by Santen 37 105 Total collaborative research and development revenue $ 94 $ 162

Financial Instruments (Tables)

Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Summary of Money Market Funds and Available-for-Sale Securities	The following is a summary of available-for-sale securities as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 40 $ — $ — $ 40 Certificates of deposit 150 — — 150 Commercial paper 3,078 — — 3,078 Corporate debt 2,631 — (1 ) 2,630 U.S. Government agencies 9,780 — (4 ) 9,776 $ 15,679 $ — $ (5 ) $ 15,674 Reported as: Cash and cash equivalents $ 3,118 $ — $ — $ 3,118 Short-term investments 12,411 — (5 ) 12,406 Long-term restricted investments 150 — — 150 $ 15,679 $ — $ (5 ) $ 15,674 December 31, 2016 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 693 $ — $ — $ 693 Certificates of deposit 150 — — 150 Commercial paper 4,947 — — 4,947 Corporate debt 2,644 — (1 ) 2,643 U.S. Government agencies 14,461 1 (3 ) 14,459 $ 22,895 $ 1 $ (4 ) $ 22,892 Reported as: Cash and cash equivalents $ 3,142 $ — $ — $ 3,142 Short-term investments 19,603 1 (4 ) 19,600 Long-term restricted investments 150 — — 150 $ 22,895 $ 1 $ (4 ) $ 22,892
Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity	The following is a summary of the cost and estimated fair value of available-for-sale securities at March 31, 2017, by contractual maturity (in thousands): March 31, 2017 Amortized Cost Estimated Fair Value Mature in one year or less $ 15,639 $ 15,634 Mature after one year through two years — — $ 15,639 $ 15,634

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss	The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended March 31, 2017 2016 Cost of product revenues $ 28 $ 27 Research and development 369 353 Selling, general and administrative 268 330 Total stock-based compensation $ 665 $ 710
Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased	The Company used the following assumptions to estimate the fair value of stock options granted (including fully vested options issued in January 2017 and January 2016) and shares purchased under its employee stock purchase plan for the three and nine months ended March 31, 2017 and 2016: Stock Options Employee Stock Purchase Plan Three months ended March 31, Three months ended March 31, 2017 2016 2017 2016 Risk-free rate 2.2-2.5% 1.6-1.9% 0.6% 0.3% Expected dividend yield — — — — Expected life of option (in years) 6.8-10.0 6.5-9.3 0.5 0.5 Volatility 75-82% 77-83% 81% 68%

Term Loan (Tables)

Term Loan (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of Future Maturities and Interest Payments under Term Loan	Future maturities and interest payments under the term loan as of March 31, 2017, are as follows (in thousands): Nine months ended December 31, 2017 $ 1,215 2018 8,698 2019 8,724 2020 6,641 Total minimum payments 25,278 Less amount representing interest (5,278 ) Gross balance of term loan 20,000 Less unamortized debt discount (131 ) Carrying value of term loan 19,869 Less term loan, current portion, net (1,272 ) Term loan, non-current portion, net 18,597

Summary of Significant Accoun19

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) shares in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]
State of incorporation	Delaware
Date of incorporation	Feb. 6, 1998
Accumulated deficit	$ 448,191,000		$ 440,077,000
Inventories	$ 3,462,000		$ 3,782,000
Options to purchase common stock excluded from computation of diluted net loss per share	26.3	20.4
Agreement with Pain Therapeutics, Inc. [Member]
Summary Of Significant Accounting Policies [Line Items]
Inventories	$ 626,000
Remaining unrecorded future purchase commitments	$ 1,000,000

Summary of Significant Accoun20

Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory Net [Abstract]
Raw materials	$ 704	$ 745
Work in process	1,364	1,672
Finished goods	1,394	1,365
Total inventories	$ 3,462	$ 3,782

Strategic Agreements - Summary

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue	$ 434	$ 419
Agreement with Zogenix, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue	44	246
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue	94	162
Agreement with Pain Therapeutics, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue	24	4
Agreements With Other Third Party Collaborators [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue	$ 272	$ 7

Strategic Agreements - Summar22

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amounts related to the ratable recognition of upfront fees	$ 57	$ 57
Agreement with Zogenix, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amounts related to the ratable recognition of upfront fees	$ 42	$ 52

Strategic Agreements - Agreemen

Strategic Agreements - Agreement with Pain Therapeutics, Inc. - Additional Information (Detail)	1 Months Ended	3 Months Ended
	Dec. 31, 2002Drug	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development and other revenue		$ 434,000	$ 419,000
Product revenue, net		4,133,000	3,189,000
Cost of goods sold		1,543,000	1,242,000
Agreement with Pain Therapeutics, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of specified opioid drugs | Drug	4
Total collaborative research and development and other revenue		24,000	4,000
Cumulative aggregate payments received by the Company		40,300,000
Upfront license fee		1,000,000
Performance milestone payments based on successful development		3,000,000
Product revenue, net		0	279,000
Cost of goods sold		0	$ 124,000
Agreement with Pain Therapeutics, Inc. [Member] | Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development		3,000,000
Revenue recognition milestone achieved		1,500,000
Agreement with Pain Therapeutics, Inc. [Member] | Sales-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development		$ 0

Strategic Agreements - Agreem24

Strategic Agreements - Agreement with Zogenix, Inc. - Additional Information (Detail) - Agreement with Zogenix, Inc. [Member] - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2011	Mar. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Patent royalty term		15 years
Cumulative aggregate payments received by the Company		$ 20,100,000
Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments		103,000,000
Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments		28,000,000
Revenue recognition milestone achieved		0
Sales-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments		75,000,000
Revenue recognition milestone achieved		0
Up-front Payment Arrangement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Non-refundable upfront fee	$ 2,250,000	$ 2,250,000

Strategic Agreements - Summar25

Strategic Agreements - Summary of Collaborative Research and Development Revenue Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue	$ 434	$ 419
Agreement with Zogenix, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Ratable recognition of upfront payment	42	52
Research and development expenses reimbursable by the Company	2	194
Total collaborative research and development revenue	44	246
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Ratable recognition of upfront payment	57	57
Research and development expenses reimbursable by the Company	37	105
Total collaborative research and development revenue	$ 94	$ 162

Strategic Agreements - Agreem26

Strategic Agreements - Agreement with Santen Pharmaceutical Co., Ltd. - Additional Information (Detail) - Agreement with Santen Pharmaceutical Co., Ltd. [Member] - USD ($)	Dec. 11, 2014	Mar. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront license fee	$ 2,000,000
Cumulative aggregate payments received by the Company		$ 3,300,000
Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	76,000,000
Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	13,000,000
Commercialization-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	$ 63,000,000
Revenue recognition milestone achieved		$ 0

Financial Instruments - Summary

Financial Instruments - Summary of Money Market Funds and Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 15,679	$ 22,895
Unrealized Gain		1
Unrealized Loss	(5)	(4)
Estimated Fair Value	15,674	22,892
Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	40	693
Estimated Fair Value	40	693
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	150	150
Estimated Fair Value	150	150
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,078	4,947
Estimated Fair Value	3,078	4,947
Corporate debt [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,631	2,644
Unrealized Loss	(1)	(1)
Estimated Fair Value	2,630	2,643
U.S. Government agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	9,780	14,461
Unrealized Gain		1
Unrealized Loss	(4)	(3)
Estimated Fair Value	9,776	14,459
Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,118	3,142
Estimated Fair Value	3,118	3,142
Short-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	12,411	19,603
Unrealized Gain		1
Unrealized Loss	(5)	(4)
Estimated Fair Value	12,406	19,600
Long-term restricted investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	150	150
Estimated Fair Value	$ 150	$ 150

Financial Instruments - Summa28

Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in Thousands	Mar. 31, 2017USD ($)
Investments Debt And Equity Securities [Abstract]
Mature in one year or less, Amortized Cost	$ 15,639
Amortized Cost	15,639
Mature in one year or less, Estimated Fair Value	15,634
Estimated Fair Value	$ 15,634

Financial Instruments - Additio

Financial Instruments - Additional Information (Detail)	Mar. 31, 2017USD ($)
Investments Debt And Equity Securities [Abstract]
Unrealized loss of securities	$ 0

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total employee stock-based compensation cost	$ 665	$ 710
Cost of product revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total employee stock-based compensation cost	28	27
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total employee stock-based compensation cost	369	353
Selling, general and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total employee stock-based compensation cost	$ 268	$ 330

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-based compensation cost capitalized in inventory	$ 14,000	$ 14,000

Stock-Based Compensation - Su32

Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employees Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate	0.60%	0.30%
Expected dividend yield	0.00%	0.00%
Expected life of option (in years)	6 months	6 months
Volatility	81.00%	68.00%
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate, minimum	2.20%	1.60%
Risk-free rate, maximum	2.50%	1.90%
Expected dividend yield	0.00%	0.00%
Volatility, minimum	75.00%	77.00%
Volatility, maximum	82.00%	83.00%
Stock Option Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life of option (in years)	6 years 9 months 18 days	6 years 6 months
Stock Option Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life of option (in years)	10 years	9 years 3 months 18 days

Term Loan - Additional Informat

Term Loan - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2016	Mar. 31, 2017
Debt Instrument [Line Items]
Debt instrument, covenants in compliance		The Company was in compliance with all material covenants under the Loan Agreement and the Company believes that there have been no material adverse changes.
Oxford Finance 2016 Term Loan [Member]
Debt Instrument [Line Items]
Secured term loan	$ 20,000,000
Term loan repayment description		The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018
First principal payment date	Mar. 1, 2018
Term loan, maturity date	Aug. 1, 2020
Interest rate on term loan	7.95%
Term loan, floating interest rate basis		index rate plus a spread
Facility fee paid at final payment	$ 150,000
Percentage of an additional payment equal to principal amount	9.25%
Debt offering/issuance costs	$ 1,900,000
Oxford Finance 2016 Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee	1.00%
Oxford Finance 2016 Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee	3.00%

Term Loan - Schedule of Future

Term Loan - Schedule of Future Maturities and Interest Payments under Term Loan (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Future maturities and interest payments under the term loan:
Nine months ended December 31, 2017	$ 1,215
2,018	8,698
2,019	8,724
2,020	6,641
Total minimum payments	25,278
Less amount representing interest	(5,278)
Gross balance of term loan	20,000
Less unamortized debt discount	(131)
Carrying value of term loan	19,869
Less term loan, current portion, net	(1,272)	$ (19,853)
Term loan, non-current portion, net	$ 18,597

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	May 05, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission	$ 760,000	$ 1,326,000
Scenario Forecast [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for sale			$ 67,800,000
Controlled Equity Offering Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission	$ 731,000
Sale of common stock during period	573,612
Common stock weighted average price	$ 1.31
Cantor Fitzgerald Co [Member] | Maximum [Member] | Scenario Forecast [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for sale			$ 29,500,000

Subsequent Event - Additional I

Subsequent Event - Additional Information (Detail) - Agreement with Sandoz AG [Member] - Scenario Forecast [Member]	1 Months Ended
	May 31, 2017USD ($)
Subsequent Event [Line Items]
Upfront license fee	$ 20,000,000
Maximum [Member]
Subsequent Event [Line Items]
Performance milestone payments based on successful development	43,000,000
Sales-Based Milestones [Member] | Maximum [Member]
Subsequent Event [Line Items]
Performance milestone payments based on successful development	$ 230,000,000