Earnings call transcript Q3 2022

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Operator

Greetings. And welcome to the DURECT Corporation Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]

conference recorded. this reminder, a is being As It Tim Papp, my pleasure your host, to introduce Chief is now Financial Officer. Thank you, Mr. Papp.

You begin. may

Papp Tim

afternoon. Papp, our call. to DURECT And XXXX Good conference earnings Corporation. third This Financial Chief quarter Tim Officer of is welcome

I you our Before statement. would Safe to like Harbor remind beginning of

trials we During expected development our product call, forward or financial statements may clinical results. projected the course of regarding looking benefits, plans, make this DURECT’s development, future product

cause and actual risks those in involve forward-looking can our can XX-Qs the including materially statements. uncertainties These XX-K be filings, to and from under results that heading in Further statements differ information other found forward-looking Factors. such Risk SEC and regarding our these risks

Total $XX third of $XX payments quarter quarter with I to would like million compared to million of the our milestone POSIMIR review in results. in XXXX XXXX. quarter revenues our the were include $X.X of financial third million to for third Innocoll. pursuant Revenues the earned agreement quarter

expense million manufacturing The and costs. due for compared expenses. benefit prior due to our the to expenses consulting and expenses ongoing were contract benefit expenses primarily was as million expenses, $X.X $X.X to million $X AHFIRM to for for employee patent year. was primarily trial, increase as SG&A prior $X.X compared year, costs, R&D clinical higher trial million the employee higher

as $XX $X.X and of to had our As of was during in million million burn QX million. compared we at September XX, XX, cash XXXX, $XX investments December XXXX, cash

split, shareholders purpose meeting about and NASDAQ would their scheduled enable should to shareholder our listing. over voting to now, have reverse statements Jim, received Before DURECT which is a would for instructions. all I to By meeting I call upcoming potential approve this The turn remind shareholders like maintain to of the proxy November XX. the

to keeping vital the as shareholders the favor of strongly for We company's vote is listing success. encourage in this proposal

proxy your shares it essentially voting convenience. all at cards is against your not that your the the as proposal, that earliest important return is voting Given same shareholders

the As shareholders. our appreciate always, we continuing of support

let that, update for with our on call to Jim And over programs. turn certain an me of the

Jim Brown

for Thank you of XXXX We second expect third you, in developments number portfolio. had to of quarter our us we We update. of quarter IIb today Tim. in everyone. across strong previous third the our a enrolment with for that our trial AHFIRM XXXX joining recently Thank a Hello complete ahead our Phase positive announced quarter guidance. product

Enrolment continues progress to nicely.

our dosed patients of more XXX. of now XXX than target out have We

to to data successful, half We an report to line has continue expect top in support the AHFIRM If believe potential filing. second of NDA the we XXXX.

to Our no to possible therapeutics. goal advance AH, there in larsucosterol as approval as approved which are for indication is an quickly

product our that the last excited we're front, United launched Innocoll POSIMIR the the month. States On in partner commercial

enrolment in in As we the primary coming milestones the in $XX to in for seeing IIb forward AH. our launch the Tim mentioned, earned company third with patients focus from million remains quarters. on and the Innocoll a look quarter, of severe completing over of hospitalized The trial the we progress total larsucosterol AHFIRM Phase agreement

double each. dosing placebo AHFIRM arms XXX and active study of arm two a multinational placebo blind, XXX-patient, patients is with controlled, a

XXXX. enrolment now forward relating COVID second We schedule challenges the look of quarter of are We date. pleased enrolment expect reporting data of patients from with to than in now second the We topline enrolling This trials to in dosed half XXX ahead Pandemic. AHFIRM the progress is and complete during the have XXXX. on more to to the despite

the in the including EU, open, States, UK. United sites XX the over have currently and hospitals Australia, We leading

in some of AH. renowned the opportunity thought We leaders to including we where world's centers, sites, to with liver continue open work have preeminent new the

the is larsucosterol has a designation, could there in need be a for AH, patients. substantial an larsucosterol program unmet result With approved FDA positive where has for first treatment track granted this to The NDA mind, AH filing. AHFIRM our support potential and in the fast FDA

average, and AH As with XX%. therapy. We medical year disease that XXX,XXX about reminder, in results deaths need is over costly patients occur a a estimate approximately represents AH. of in XX,XXX disease. unmet alone, rate have a hospitalized hospitalizations mortality the States lethal United people from from States this AH die XXX United every This on approved a States an per that the in more the in than no United XX-day day suggests and

healthcare a both burden represent to continues significant system. to cost the AH patients and

For can range the a patient a $XXX,XXX. majority AH transplant, not receiving average from treating the hospitalized of vast to $XX,XXX cost

patients transplant, is a who are cost lifetime $XXX,XXX patient approximately and in liver of per United those the For the subject a immunosuppression. receive average they to States,

system. providing healthcare in the this cost opportunity alone, substantial a simultaneously With mind, to multi-billion larsucosterol US savings represents while potential in overall the dollar

We global opportunities. also AH that and market represent attractive markets believe additional a that concern ex-US is

Now, we'd treatment larsucosterol are optimistic of like the use about of the patients we to reemphasize with so and why severe AH.

the AH before IIA larsucosterol XX%, of in severe to face of from a patients mortality XX-day and rate there the this our treatment Therefore, is Phase were patient. excited approved approximately we moderate mentioned I disease. data for trial AH by no As

the XX XX-day the including severe AH All trial. patients survived patients, XX

after baseline. patients the trial, Lille compared The and this XX the biomarkers of larsucosterol. only of were in IV scores discharged single XX AH MELD in prognostic scores improved infusion other bilirubin less including as than Additionally, receiving to a patients from and four were days

all Larsucosterol all were reported no was in There in the trial. the evaluated trial. IIA of serious drug-related the the doses Phase well-tolerated events adverse patients at by also

also a trial multiple but reflects multi-organ patients, to results, have larsucosterol's not important in failure AH. in we to models. driver demonstrated highlight animal to This to preclinical potential supporting indications the addition against the larsucosterol's primary is in-vivo provide in as addition clinical that numerous in In data generated mortality failure multi-organ only protection of AH is benefit

mechanism on bias Larsucosterol endogenous an DNA action and the process modulator to to in DNA in the DNMT-X, results better enzymes and epigenetic These a inhibits understand as three patients. remarkable helps to us groups regulate called AH by epigenome methyltransferases, the Larsucosterol's activity its Xb. adding DNA Xa of we've observed methyl of three impact methylation.

cells. methylation In or some those In hypermethylated resulting including larsucosterol's that these potential cell DNA closer in methylation patients. patients is sterile AH for in whose threatening published severe path stress life DNA patients prior AH literature in medical a studies return mechanistic diseases, in benefit AH, DNMTs where are consequences. rate healthy observed liver to these demonstrated elevated liver abnormally of even of is high, DNA have levels Furthermore, sickle the suggesting treating

XX of provide our remaining And move not now is approved post-surgical Pharmaceuticals. analgesia legacy that States last opioid to POSIMIR, the on like and arthroscopic decompression. subacromial for we for Late FDA a POSIMIR licensed hours to POSIMIR I'd we released local to in sustained development is the last novel up year, to following United one Innocoll products. announced anesthetic to commercialization that rights

for $XX a our post-surgical in patent were milestone In August, POSIMIR because extending at the payments focused partnership, team issued earned We commercial US this and third we by market. because the XXXX. from Innocoll to new pain commercial the quarter. patent the Office their total of Patent least during coverage strong partner we million US Through they of on a are selected Innocoll as

Under agreement to Innocoll, $X within an our this milestone DURECT. million triggered

sale, We payment the also in commercial upon million earned September. a $X first which occurred

in $XXX remains Following million for payment upfront these commercial, regulatory payments. the milestone property DURECT initial and an eligible two payments additional $X and intellectual million

royalties net to We also receive product on States. tiered teen the double low United in sales mid digit

In and with XX running. make great XXX summary, sites we up with continue enrolled AHFIRM than and to more to patients clinical strides date over have

line on half complete in patient XXXX. results quarter enable in dosing last reporting XXXX, would are trial of to We track in of second the AHFIRM which the of the the second in top

we profound that AH, the into the confidence in compelling AHFIRM which injury directly where studies acute will observed relevant action benefit by of models. our be preclinical Our of Phase larsucosterol, data, mechanism biology ties successful the animal is survival study multiple driven organ our of and the IIA multiple trial

could a trial, positive We if outcome this filing. NDA in an we expect achieve support that the AHFIRM

like to have. you may questions now any would We that take

Operator

you. Thank

be instructions] you. Thank will a now [Operator conducting question-and-answer session. We

Fitzgerald. is question Kluska with proceed Kristen first Our Cantor your with Please question. from

Kristen Kluska

Hi. Good afternoon, everybody. Thanks for taking my questions.

that in first noticed I for we've suggesting rising. other putting The of for are AH out US cases of the similar you observed some research nations terms been number is one had to severe what's in trends

the starting working line? to you're agencies how maximizing a about is here, other think and ask perhaps global given to the down study regulatory it opportunity wanted with I So

Jim Brown

Western for also to at you're and to we if especially both Kristen. I States we've question, it's pretty it, and date hand That's commercialization start It's Keith one at are and have think problem who the similar Europe major over is development Louie, to right. responsible and for I'll it DURECT. so Thank everything a a EU patient here a but numbers asking you and problem. on great worldwide seen going from business the what But absolutely here United in looks at in the particular, I'll then

actually Some this working and Europe with on leaders and UK from who of disease from thought general come France best already. the we're the and

also regulatory them, to some to it local overseas. commercializing turn the there's shareholders internationally. get unmet we're healthcare be these need to help out I of by this and but a position help there -- started substantial and going obviously the we systems certainly this looking processes our So market bringing to is and be We ourselves a able and patients to think to aren't ourselves

will partnership putting We a place. most be in likely

potential? So want some Keith, the maybe to speak to you of

Keith Louie

efforts the today's similar it's as lead talked Sure. XXX,XXX to is developments, trends saw and data to we've US seeing stated. the Thanks And in discharges Thanks seen that here true, the Kristen as our commercialization Jim. Jim and in Keith Louie. is XXXX This I business in question. well. as Europe we're Jim had up you call for

with time end the AH across I efforts as of taking well are understand aware side European and And think the primary as work aware identification hope by timelines vendors to report the end around medical this our also educate and better on of and by data affairs year AH ensure the XXXX. both taking data secondary and and or severe in of Europe. to AH our that trial we Europe are of of physicians we to of to we diagnoses are

better we in So as the to understand market taking as that opportunity educate quantify and strides well are Europe.

Kristen Kluska

Thank that. the about around term. plan XX-plus up more love would and near And to you that thinking and ones have also running, you sites the in you color the to for get that open

does look@clinicaltrials.gov, that it major cities they're well. spread in pretty just also you but If seem out, as

strategy you particular should over specialized given where this see So, about, think this is the a and how you country chose this and centers then problem sites also to want you get And the translate users would data necessarily. is could all terms love to it getting in of these early if your thoughts that you commercialized? not be centers

Jim Brown

I on little Norman the like I the United question, up to a approval, were think with can then thought States, do with the of you on the then bit we'll to their out relationships to Europe, you think the of then and and from have great and breadth to we leaders follow and spreading UK. Australia, post only to first patients and where obviously normally, sites thought a but want up. thoughts Keith, leaders, speak I'd initially not reach out where to maybe the follow we both and in across and hear certainly how this But That's where but this, initially had from to looked expand Keith

Norman Sussman

Hi Kristen. Yeah.

trial frequently focused are running for where So, volume sites. being and transferred referral the admitted clinical Patients we trial evaluated a why requires who including possibility so on centers to that's the for this they clinicians, get are transplant. experienced high of have care, usual AH for

literally these community I this So as patients, we X. that also thousands of hospitals see and point think as are out, Phase you there see

behind this getting So step number is us. one

us is this we to if very use a that data But to want by definitely would trial know, currently, in do easy high a much much just the how and it's expand experienced base. clinical You approved, centers. to broader for it is and quality easier drug so doing assure to

Kristen Kluska

well. market presence this wanted you. you -- were to the right you've me as from had conducting the liver trial's if And to last past a planning shared ask now, obviously the Thank a at enrolling question but know around of I you research you're in if metrics have the then some weekend meeting,

Norman Sussman

Keith let address I'll finish of Well, last the and question up answering Right. also a bit little ASLD. then

So Keith.

Keith Louie

And our the not that's Europe. with that specialized, of given last it's the just the would disease I dosing both sterile, tertiary data of with given is to given just that on it's care agree thought question, the so that Norman nature dose, the say that very tracking nature just and in day centers the one is conversations a days maybe the Yeah, one super according leaders on protocols. and non-complicated in patient our that dosing six and hospitalized, and and it's administration four, still administration only the US

opportunity referrals that as and the feel straightforward AH, treaters that because care and is AH top fairly results. is tertiary seen like there with prescribers not we've hospital potentially following anywhere, IIA with positive line Our those could side to attributes that Phase larsucosterol that be admits effect of patients any we centers, it's diagnosed the just profile is because

So that of that will stock prescribe nature be we could and drug. any patients potentially the and opportunity admits it think large that do this hospital

showing to As primary It than on in it and are have were AH on a ASLD. some relates healthcare presenting AH at data that within at AH fact, relates position. healthcare secondary costly poster and looks to -- CMS and had those either the an we that admitted, as ASLD, don't diagnosed utilization diagnosis it cost with that worked who rates was DRG particular utilization we abstract worked for on in codes Sunday or patients and some the

to we our trial will there as alcohol associated and XX data booth affairs AHFIRM providing a just that bring booth light well well. have staffed to by excited we're XX education So medical around hepatitis around as as

Kristen Kluska

mean cut answer, didn't about on And the everyone. off previous to sorry that. Thanks you Great. so

Keith Louie

Thank you, Kristen. Great questions.

Operator

you. Thank

Please your [indiscernible] question next question. with Our from proceed is Oppenheimer.

UnidentifiedAnalyst

taking Hey, thanks question. the for

clear you could the on go that maybe transplant just changed, that mortality to it I here. Just was hoping again just quickly over liver endpoint or was make

Jim Brown

are Norman speak this, patients back Well as but C weren't really what's you. there it today Thank hot definitely livers now world is available more I'll because at was it that AH Sure. hepatitis in raging looking when as let mostly for was. is to available the happened

therapeutics of pharmaceutical transplanted. to With fewer available patients now now, patients the C patients being those Hep are of

That and XXX,XXX in other being and States. liver lot aren't that all conditions. year heard that has X,XXX per livers and transplant, the stated approximately just mention earlier, from And said, the Keith, for potential of diseases per still and around AH, the there's X,XXX, inherited year a hospitalizations as we United reasons for other doesn't they're only transplants

to available few but it's So only a patients, patients.

transplant. that That being to for to patient is able their we in we of then is patient very they so the liver sure our XX and and are trial chance a transplant, having a make and/or wanted now that a does received said, high if were we track that get liver endpoint so potential if an survival days mortality

of Norman think patient speak kind the eloquently of it than can liver think or death much of but way I, the about death more So I I the this would be

Norman Sussman

less think the It's more was Frank. alcohol it's and I transplants. written, summarized more Jim that issue, when big protocol -- wasn't but it's grown transplant an first or counts fast now we really as than in quite popularity a and up realized,

death you're and the a someone XX transplanted, XX%. a in the being have in US ending question of So for and got bad was it's days the high big hitting tracking disease is and lethal alive only you super if was over chance

a would very, that that give inaccurate felt picture. we very so us And

be transplant potential had point will to include that outcome. at felt as well, end looking a death we although as So we an as we

the you inclusion at know this, know look you XX. details our XX if meld of I but Sort of is if to you,

are XX So if and XX, you getting are get you your say above transplant chances you're worse when a of higher.

you the better, melt the get getting risk. lower the If lower start goes, your

time a thinking the we conclusion we we So was it's lot that better the spent and almost, to including of a transplant But, problem. of be self-correcting hope option. it'll about came definitely this, kind

UnidentifiedAnalyst

Yep.

endpoint, to trial? totally survived changing to is transplant just have someone to I not considered, you sense, just where they here got or in clarify this trying makes think prior them did the if it having I'm but count a

Jim Brown

Good, Good good. catch.

only end trial so remaining remainder the patient The category. as actually that -- point. the So one an actually transplant into of falls included

So who patients get a are terminated. to considered transplant

UnidentifiedAnalyst

So they -- survived, so find just would have another they wouldn't they be patient? considered just, having you'd to

Jim Brown

considered failed no. No, They're therapy. a

UnidentifiedAnalyst

the they -- it, point, the you so think -- end if answered is No, then the would would've I I it failed mortality therapy. think

placebo would basically effect. it So up the bring

Jim Brown

for surrogate a death, It's Correct.

UnidentifiedAnalyst

fast that post Excellent. that tracked, that just potential but sure designation potentially can therapy got for to something is Okay. data make happen you then And wanted only any breakthrough here?

Jim Brown

breakthrough have looks do. you need have, possible. Yeah, opportunity IIA, we the in need positive, And Phase in control so you then is for the favorable, that which What I didn't to very wasn't there a us breakthrough an point since control if group group. do a firm is a study, time. contemporaneous have is for have to that We at

Frank. you, Thank

would first in be would Well, would I was I be, with be a one think to was they that right? clear I think over? or that be question either the the as guess death rolled that case, patient question patient counted on patient then transplanted, who

UnidentifiedAnalyst

how single we'll event, So we to as are minor out still statistically very but trying have a deal single XXX, with of patient, probably to decide that a effect.

Jim Brown

Thank you. Right? would agree. I

Operator

you. Thank

next Please from proceed H.C. in Ed question Wainwright. your comes with question. Our Arce

UnidentifiedAnalyst

XXX October in XX, was the have questions couple how much Ed. just were, been is patients Thank update very update? can since patients. many since to enrolled It our us on firm first you Perhaps This Thomas tell everyone. Hello questions. you [ph] trying a asking for for taking here your of understand

here. timeline trying also understand better the then to And

in has release now and the to with up pointed a study data XXXX process the How second should long estimate we a is out As point? complete press been for you XX-day quarter that enrolment pushed period. from

Tim Papp

kind speak first every at we that beginning having did Okay, in to that were we're than October second to we XXX, the week to going and because we as suffice more at to But every many, the or we that I the say, want we'll announced give of we of updates had beginning we being enrol XXX. one, this that we How -- August well, and couple but one, achieved think not Norman, people were XXX concerned, then, start of announced far thing. as don't weeks

So, a math people can very enrol start on general question, but one, can a there two that be after like we was second last estimate and give maybe forward there looks do and to achieve, last the the we that project how days kind to many of XX that patients Norman, and reasonable able see months, if to approximately? quarter thing answer was a patient visit did

Norman Sussman

Right.

up, out you a So, of the there's XX that's with trial, patient plus on keeping as they point in a days doing the to Thomas, CTI ninth to collaborating gets records then and so date. We're end. the to XX-day last this you -- job so up they're follow fantastic have

XX% continuously So it running we are completion. about

it'll to I that So expect, us months probably -- don't several the collate data. take

make before analysis to decisions on we blind. un have We

will prior an give I So I use a number, want to and think a the don't to analyses data to of we well intense be positioned unblinding we'll very do months. so exact any period plan have other we few within, to discussing, but

UnidentifiedAnalyst

what enrolment target pointed you much as the Jim, to based pushed that that be you piece are additional enrolment efforts that can you well, been on of to can accelerated that expand seem enrolment? complete driving so some And of enrollment reasons out seem on you has the are Thank pace details. underlying and pace then have that some Understood. of for -- up,

Jim Brown

you. Thank

Another good Thomas. Thank question. you,

team and driving and think just I and effort doing environmental with are the Keith's there's then going team and that the an also out together the overall word on, circumstance to just getting fine Norman trial. there's

they're coordinators The more again, hospitals and wouldn't were kind up to COVID normal not and considered so and circumstance there, with workers that back waning, opened into a able where essential be study first of were be is have thing. back

the a was challenge. it During greater pandemic,

condition easier stayed during too have our hospitals and home into they been even the opened to ill a for study So more it's for too patients going as have pandemic. for they become the where hospital qualify comfortable long may feel and

fine And from team. environmental and really so an the work standpoint, the I helpful that's standpoint process Norman think from that and has by been the

can you that. Norman, to maybe So speak

Norman Sussman

doctors Normally were I'm coming patients disruptor, sort the and opposite, thank seeing a so their you the huge People of From to who just delaying positive. so their COVID going patients sicker was view asked sort hospital. are to two-sided. this at that we beginning, seeing a were weren't the for slanted of of in doctors, see delaying, and

trials In quite the addition, unavailable were suffered same problem. from really was frustrating, the and coordinators and of number

With this much seeing schedule. we're opening normal up we're people seeing more you a to back returning know,

it compliment. to -- so are issues by very we Australian closely weight sites the the while some we nearly of being their sites have then any lagging, the they took sure make sites follow have and with we than help can them sites call a full now that to up have pulled more European We and and we get have don't the very that a initially that

that Jim as to few on this volumes high a because that additional make this only adding assume what I sites finishing. always such but studies. that are dangerous completely an we'll they're and -- volume. in path I said support produced high about continue it's There prior I They've just I assumption, such we're think on And

UnidentifiedAnalyst

feedback POSIMIR appreciated. to if expect terms would XX line would initial POSIMIR the any be Understood. final us quarter also fourth that from and and of in you. you for Thank months well you next the for also Perhaps Thank top for AHFIRM. the for as from one the what there's related again from details field

Jim Brown

Okay. Yeah,

with partner that certainly for as going in call, I but for that, to that he's I of want our As pleased a back us, satisfied the to tremendously went. very and very know did wouldn't it. painful shoulder I with were hear would surgery that used from feedback be do, initial the surgeons the the to were them, launch way him information -- CEO anecdotal to They experience. in some be projecting front not who do through And far product talking that who's Louis, that's can sales to

saw finally see back this and reductions good and clinical in actually. get where narcotic in patients we is positive a use product physicians. everyday get from rewarding seemingly, dramatic in the to out pain. the And and results our really so these continuing nice. to feedback And you trial had the and patients market, in on everyday users use, it's from feedback It's hear these Very always

UnidentifiedAnalyst

you Thank again for Understood. taking questions.

AHFIRM. to in forward progress Looking

Operator

questions floor are like back this over Thank further no at turn I'd Brown for the you. any to time. There Jim comments. to closing

Jim Brown

Thank We'd feel time. you, as have reach to and happy always, And a please Thank evening. free you your Paul. your calls. out. to all to we thank of for And you, be take want wonderful

Operator

conference. This today's concludes

You may this Thank at lines disconnect your participation. your you for time.

DURECT (DRRX) 2 Nov 222022 Q3 Earnings call transcript