Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the DURECT Corporation Fourth Quarter 2022 Earnings Call. [Operator Instructions].

I will now turn the conference over to our host, Tim Papp, Chief Financial Officer. Thank you.

You may begin.

Timothy Papp

to Fourth welcome Conference XXXX and Call. afternoon, DURECT Quarter Corporation's Earnings Good Papp, of Financial is Chief This Tim Officer DURECT.

Before we our of remind to begin, I safe would harbor like you statement.

statements this benefits, can that results the product these development and These plans, and or may course such forward-looking development, actual trials our cause call, risks clinical found forward-looking and financial to regarding the products and Further of make information During uncertainties forward-looking XX-Qs projected regarding Factors. future from SEC in statements DURECT's can our differ expected those risks statements. XX-K other we results. filings, heading, be in our materially including involve Risk under

Innocoll, year million results. were of million XXXX license in XXXX included sale commercially I included payments with XXXX compared agreement XXXX revenues and financial our begin, excipients. To in approximately related launched like upfront an full while to to Innocoll Total $XX.X POSIMIR million with would September million $X.X milestone $XX payment manufacturing attributed supplies review XXXX. POSIMIR revenues our of to in $XX of XXXX. and and fourth quarter revenue

XXXX, million $X.X Innocoll This revenues quarter compared with revenue million we $X.X license upfront For fourth is due the XXXX. QX for of year. prior the the were decrease to recorded in

spending decline POSIMIR. larsucosterol and partially benefit AHFIRM trial for quarter for year. ongoing for fourth contract compared to as on offset in prior for R&D the year trial, manufacturing costs, with clinical for XXXX $XX $XX.X to due expenses and higher $XX.X million R&D expense million in increases expenses million was primarily the prior $X.X by a were The employee and the compared million our

primarily were $XX.X employee to expenses. higher due costs year, for to expenses prior and million million patent benefit SG&A the $XX.X compared as

revenues flat. million $X.X were fourth compared so relatively million For prior the $X.X year, SG&A with the quarter, for

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

We million sufficient bringing also the quarter We pro $XX.X offering fund cash registered of is hand February operations in proceeds, to forma net million. into raising cash $X.X a first on our to direct believe XXXX. completed XXXX, our in

Now call for I turn would update to our to certain the Jim programs. like of an over on

James Brown

Thank today for fourth quarter you, for us update. Tim. XXXX Hello, Thank everyone. joining you our

trial. The quarter AHFIRM strong one, consistent on fourth with a forward was progress our

second to IIb top We this of are our year. on track half from results excited to line in trial announce remain the Phase AHFIRM

nicely. progress to continues Enrollment

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

We continue to of expect in quarter enrollment second XXXX. completion the of

believe support successful, we AHFIRM the an NDA has potential to If filing.

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

IIb on is trial and the focus company for our in primary of AH. Phase hospitalized patients larsucosterol The AHFIRM enrollment completing with severe

U.K. XXX-patient a the We AHFIRM double-blind, in a Australia, arms the leading including E.U. the two have of study multinational currently with dosing over sites placebo-controlled, hospitals States, patients each. placebo open, United is XX arm and XXX active and

in are renowned with thought working preeminent world's and the centers leaders AH. We liver of some

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

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

goal the effective lives. and help and treatment a these to a save patients company alleviate to safe bring suffering Our as to is

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

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

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

allowing additional alone, opportunity in to system. a attractive health represents Larsucosterol care a care the health overall global simultaneously potential providing is potential serve opportunities. and cost their to ex-U.S. market multibillion-dollar systems. ex-U.S. AH markets while concern, the savings represent also larsucosterol U.S. the AH patients substantial These

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

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

in last dosing half on the second in potential the to has year. the which NDA AHFIRM AHFIRM this we quarter this of complete believe reporting We volume successful, are in to of top patient track results the enable second the support year, of trial filing. an would If

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

Operator

Instructions]. [Operator

with Brisebois Our first question comes from Oppenheimer. Francois

Francois Brisebois

wouldn't gives data of just that have you potential NDA filing, terms staying was confidence another to before track the Congrats what on on of the wondering, filing? need you that trial here. in I an

James Brown

a it's well, that up, today I XX is MELD, no Norman north so even It for of it's one And is comes let this think but depending higher. XX-day it and on gets significantly But mortality there The your rate mortality higher. the high. XX%. primary it approved couple as from the be therapies MELD speak to I'll is directions. are disease this score, If can of

there. mortality that's potential data the a the have we've So as they That very they where the indicated FDA hand. no out but sit Quite some will being FDA for with in and the you've got we the have with well both they right until now, but anything said, have in to EMA. never hand, frankly, until had therapy commit high communications and that the that, submission

add anything would to you want Norman, that? to

Norman Sussman

No, I -- Frank. think Hello,

that the think -- It's it the is all. that is that qualify that sorry, the covers circumstances addressed, I FDA one topic FDA confirmed under regulations. a Jim mentioned. does and specific -- specifically of it just that It

Francois Brisebois

of second alcohol? just a -- maybe of in you transplant, just one Norman, discuss patients of age patients eligible they liver how of been on the eligibility because with And here, here have getting recently that can the aren't consuming a for even maybe percentage terms

Norman Sussman

an centers that people until requirement years observed requirement to was the most to absolute months. moving a it's few have be and a the -- started by X that for target away So because centers rule dropped for had fall increasingly abstinent months. X there abstinent ago, was That

going a so it said never even ASLD their about to than solution patient. problem those that, transplants of be other for And available, the only to changed it's alcohol. things are half in X,XXX severe could are because the you Having a guidance consider to say there

has If through social you comes to to it admissions, more solve it see We'll be time X,XXX transplants numerous The imbalance. and it huge down now behavioral less factor rigid, become never is factors and factors. transplant. XXX,XXX able a

Francois Brisebois

ahead, Jim. -- Understood. And go then

James Brown

also say just for comes whether insurance, going already you I to the it play, the to it, No, have whether factors, can social unfortunately. mentioned or pay you Norman was not

Francois Brisebois

expect that percentage to insured And of is treated people there be here? a you would be

James Brown

patients we transplant -- but much. XX% insurance, needs order over pretty so to have Well, a who that there's or have AH, in one get

Francois Brisebois

yes. Yes, Right.

Norman Sussman

transplant work transferred experts in of trial, the who are get an patients isn't lot of gets transplant places a of there where lot to out The unless but a there. patient option, centers, admitted

Francois Brisebois

Got you.

data lastly, coming here. where -- we're as is Okay. And the then year just this is the

ex-U.S. guess, is you any exciting opportunity large a thoughts I for, larsucosterol commercialization? the So the on DUR-XXX just about But of -- as it's well, which talked opportunity. U.S., in old unfortunately very It's terms now. the

will was just in what thoughts to U.S.? just a to feel be to any get are thoughts is necessary be order commercial build would able better commercial any own I necessary on color on about amount this your a And ready take commercial own? the this on data that just just take reps if off But to thoughts file get would to helpful. of in or maybe the Or wondering it or E.U. for be your the the in

James Brown

Yes.

that would First would a in expect place. ex-U.S., we we yes, have off, partnership

so process a that's And that's ongoing.

at there as DURECT, who speak Within and And underway, Keith the here Development U.S., it Head and we look initiatives. his forward are to can doing that Business some things already Commercial some of he to of is half is well our ourselves. long-tail Lui,

Keith Lui

access delivered in we're aspect processes. activities of the is and Francois. I on would status say certainly inpatient likely under and of a into far things, the system looking to We've market good a this be Thanks, that work it's at given as the process, current landscaping done going care development point this Yes, those question. of commercial under DRG. lot as

marketing of plan teams as results same As line all our on soon going ensure turn strategy, aligned we cross-functional readiness card. as review top that underway we various to that processes have already far and the launch are into as

move right of can't at get and line surely, But sales the be I the level very force upon think all state results. we're able work by on results, is give preparation sizing in we specifics quickly I to now. ongoing top you to right and So the time that the right positive mind

James Brown

think it's I be say under would XXX safe Yes, reps. to it

Keith Lui

on again, that between range hospital this. I with applicable. for And that, products launch for start like is And worked always still X,XXX. we on product Yes, I've every think a like hospital-based somewhere somewhere --

James Brown

some longer-tail the the we've motion. Yes. got like, in the And of like for and codes already process things the

Keith Lui

Good. Yes.

Francois Brisebois

something something, that's Okay, a that working and really still time, is lot have that a for much is there's docs nothing on been aware there's working great. awareness been for and transplant based the that whatnot, terms long really needed? of? liver that's education Or steroids MSLs it of age very are the of in And fact

James Brown

follow then Maybe, Keith, two up speak, perspectives can that there's about and different on the because can you Norman same.

Keith Lui

one great we site launched. certainly took AH actually called point entry heart. for very to Yes. And good point disease Explore it's No, epigenetics. it's that a awareness It's our and a just we new that actually

of AH, over and past gastros couple years past with folks' there years. the has course over of radar the so the on AH. couple is increase become of higher in incidence Unfortunately, seen the hepatologists. screens awareness so of an pandemic, particularly of it And for We've

epigenetics we AH, and and educational treatment intersection website. alcohol-associated the of all the why there's need, That's intersection high still the But this again, which AH medical play the that are the -- reason think at role why unmet an between paradigms, think purely looking that hepatitis. hepatologists unbranded, epigenetics may and current is and developed a subpar we between just intersection

encourage would epigenetics certainly, you AH priority that line and to I So the around role the between we that a and But [indiscernible] are may now able and top to actually in results, high us. for website. product, and others is that until in play launch education

James Brown

awareness it and And can Absolutely. the maybe of you speak perspective this from molecule? Norman, clinician's to

Norman Sussman

for especially Yes, that the get patients admitted.

the people and come into a spectrum risk very hospitalized, disease rate. broad between XX% and low for pretty somewhere admission to be sort a very hospital from expect AH where So with we of a can XX% death mild level

worked can't see For It become Most I displayed transplant hepatology and who -- transplant completely with from no -- a most we crisis are people else. it's having surprise. it's work people it's programs. so stuff AH the much most a of overwhelmed in many not transferred community It's hospitals, hospital. of severe in ways. in sort practices somewhere

sure in reasonably because people acuity you take of that sort get those gastroenterologist hospitals that second called level my hospitals, that I've pretty patients I'm got AH." not patient high with practice, always saying, would "Hey, I know this So where have from

product. practices. a wide States to of be United very is So hospital Keith's the hepatologist AH of -- of prepared there's or I unaware add the to to is I there terms the At -- is in comments, think recognition either this in hepatologists, not would who there say in

big are received good we as are hope has issue. but I very is results scrutiny. about going to excited the close extremely not awareness extremely, them to it. It a People And be be, expect as

more to to that Keith it's the sort that people know of site AH. next of the really mentioned, And need level about for

were. it's So it designed as downstream word to really the spread

Operator

next with Kluska Cantor Fitzgerald. Our comes question Kristen from

Kristen Kluska

you're line. very And to close finish getting that

is is the differently if to what are behave expect So not Or the whether populations? first phenotypes on different question address was would had or histopathological I mechanism to of different across your that indeed patients? these XXX this? the And understanding quite is case, there you even broad

James Brown

there of I known. that let where population But I maybe possibility. much I'll genetic populations isn't generally, that's definitely. to subtle some once saw think with Yes, Norman speak a do some certain America in what about sure. one a components certain suggestions But are you Norman, South speak there for think? But

Norman Sussman

or previous our diagnosis -- less well, these you one no U.S. In practicing, discussion. this Yes. the The has more histopathological from know patients. biopsy

the object findings. is -- There's It's there Some term histologic of biopsy constellation people really actually the just of proven. to no AH. finding that defines including a classic this

It diagnostic number the or biopsy I number. prognostic opinion more mixed value. there would of been and biopsy, or very a the of opinion usually a senior value additional that of colleagues XX% my little the of but few of is it, the in, papers prognostic is cases shows clinical. have a gives several that features. It's refer guess, my to diagnosis And The

last somewhat people And who don't people's biopsy value. it's [indiscernible] believe there that -- not any think but much adds people regard. biopsy that are opinions, the lot shows And the of -- do mean in the those to some I really a

Kristen Kluska

how you've you're trial? natural of And time? point? you published into light citing that on shared at around what's your latest behave to the would in us about what Okay. or the remind related powering Can history XX-day mortality understanding like arm and findings this placebo this XX% It sounds this publicly way expectation

Norman Sussman

Yes, think. we are. But I

James Brown

Go ahead.

Norman Sussman

Okay.

study. it's So a blinded

endpoints our are to close worked who's other the prior don't several we statistician and projected coming what observed very up endpoint protocol. But with a falling So -- people on -- that which our I and endpoints at into group. DURECT to know final

on track. or So we're less more

James Brown

rate demonstrated paper low to was sure, a but above on that not no this for And mortality, our that papers that. historic surprising have other and well number. You're is surprisingly event that referring published very low is

Kristen Kluska

liver some whether you're Okay. are that And then at you can going key liver at transplant, injury? factors or remind going measures endpoint outcome primary to markers, of other you outside the the And us cell mortality to understand the you're XX-day looking be well? secondary contribution or to of looking counts help as different

Norman Sussman

The So two we mortality. are a have lot endpoints. both at of most promines for outcomes second XX-day looking

transplant then by all a of the followed of or the So Lille And in or score I death, events, death, then we mortality. have that, also MELD by followed transplant hierarchical by stratify death, it followed variety biomarkers meaning transplant my remember enrollment top off MELD. by XX-day progression. head, XX-day like we'll can't And a of the things

Operator

[Operator Instructions].

Our next Wainright. Arce question H.C. comes from with Ed

Antonio Arce

my wanted enrollment. track. Let of me questions come we've just to couple full ask and on reached June continued XX, the congrats on pace, I sure a make that progress to add staying that around

First, on have just you X looking enrolled pace given at now XXX patients update, and the over over as were of today. the XXX November

a month. the That about June. that a way of the of indeed, XX thinking XXX get progression? the current patients fair of months, to And about you to target would wondering if comes that's the over the by from end I'm last out So point, X just

number activities second that are And a lines, to just question, data for last activities is involved. the the the then again, point second also those readout, with of what are but along of the of the last necessary if in From last that dose, process patient patient dose time involved months?

James Brown

Sure.

-- just the we'll First I where my I squeaking in. better fine. sit, is I certainly -- calculation, pessimistic -- side. hope off, in do barely probably on your a than yes, bit It's think, my from

it they the occurs, doing enrolling. last that great Day dose, the patient, when a last the they But whenever visit in And dose. -- isn't from the enrolled and starts. job from XX-day get first last it's were the clock is when actually of team That's X, study.

And doing so with it's Norman one real-time of forward looking that's And percentage process a are already days. clean count patient to clinical constant last up. very cleanup. now, us And as specific but from and can a we dosed, a even that data give any we're number, high that can trial. the -- XX Then

can, To -- as any of that the be kind that missing as real-time, discrepancies like. like well anything in patients the of the or queried any needs to data iron keep the extent to, you you'd each organized and data for and out points are that query and

last but X-month -- we we we X, X. by go the optimistic. then of where team to until And feels saying have comfortable -- to we're they just will be to very down, so or patient we have in up to X- get wrapped and probably feel, hands let's got data last up we say -- point that I'm continue They closer lock. the XX% the another frame. to enough hand it north of clean you've kind to that will in that visit, of time want pencils that time and get feel going data the

just we'll that and within a have forward the at days, information, the that point, have look the very short we'll a data we'll we time to within announcing. few And just -- have

sure the So of just you go matter quickly, and should and lock come never really you it's it database, will difficult it's to the cleaning because back. pretty really up -- data once make actually a

as you lock a you've done If it. pivotal to be really you want it to use trial, got when

and critical in understood those piece that well And where so in well sure through last everything most few got making months that's actually the and going you've you're Norman? hand.

Norman Sussman

than little your bit. slow with -- the just -- trials activities down most pace. don't projection the is holidays, a we're I during decent a because at I'm typically optimistic -- We're agree I said. Jim the proceeding trial Yes, think more what

confident time. that the have finish pace So picked pretty will I'm we on we again. up And

we're to of for the final preparing do, what analysis. In terms

we're -- we're So populated the of the preparing at there. the shelves are reporting to tables ready of the sort all -- all be moment, the of and

can of imagine, a are data trial you As of size, this thousands points. there

And our make we of then as all to we decided Jim sure that on says, analysis. want

analysis, it You more but prospectively doing a can always a do post-hoc everyone lot gives confidence.

trying so the before out haven't make to do data anything sure And we lock. we left we're

Antonio Arce

that. a side. couple anyone, more the course, open me, I'll very it to up And comments, Great. I but some of on helpful. Maybe to for commercial wants appreciate give [indiscernible] That's just more

Jim, hospital think as So think, I it in earlier, the had or Norman. recognition actually was the I you problem mentioned of wide there's -- a

also in AH larsucosterol, which hepatologists no either the perspective. very is unaware is And from encouraging the U.S. of of or also, prescriber's course,

payer given have that that that just So comment of about degree that background, sits you XX% sort any was of the wondering your you've degree I insurance? if do even interactions, are on what tangentially, on And the just could What to breakdown side? had patients of the you receptivity the think at? thoughts

James Brown

speak far Yes. of glean, speak majority. say, XX%, as per Well, the I'll year, can maybe it's I the those of of payer percentage what insurance XXX-some-odd of would From as let patients to hospitalizations -- north thousand But vast the we have Keith piece. the of who XX% patients. north

that And the clearly horrific. It's $X-plus XX,XXX running And multiply right place the in huge between XXX,XXX. bill. put of so billion by you unfortunately, range. disease, take somewhere of number is and a you're standpoint. cost that And that's would When the XXX,XXX, this number it them a in you that from

of There's million which, transplant, the And as tells that that's odd, available. us, cost X almost many taking X,XXX account livers Norman X,XXX-some but each. at all into liver there maybe not aren't that's

as component expensive very well. a that's So

you're in a you system the cost together about States. all and So the to United care talking substantial health add this

well is not but than the around I in less large markets world. Europe and little Europe, quite as think, patient still because population Somewhat other a bigger, much. It's bit the that in

very shareholders about well. and very So to up well Remember, as people a our rewarding these we think XX% dying that have that product sets us to can save can are of be lives.

DURECT, save still think that money be lives. we product for health we amount So the to save very and be that equal an there system range, a create in successful care to able can of

specifically in But maybe, enhancing speak awareness you to Keith, can more payers.

Keith Lui

the Medicare, And Ed, bit question. previously. we XXXX is probably are a we that and a XX% published Keith. more private little that that this the Good say on insurance, data or heavily mix it's of when I so Medicare NIS and Medicaid towards insured, of look Medicaid would at being

as the But going doing proposition our certainly hospitals, around to the for livers of would wait deter and of the a I in to and a reduction too the in that itself the mortality primary statistically to of list just benefit list previously, of and supply endpoint there's off value and them the way people liver transplant are them a transplant because, for liver firm that be think take much research huge we have being and building transplant. stated lot limited But off a demand Norman of significant case. back

like But access in addition and other and primary decreasing of there's endpoint, things help think hopefully, length in in realization, the -- AH time health decreasing to ICU severe factors decreasing reimbursement that stay, offset spent care comprise. these a patients diagnostics larsucosterol typically obviously, number of care health market the that that could I hospital

that between market our line now data. that there top reimbursement in certainly line So potential the are are commercial top I will after one And division results. of depth after cost active line data, number and and certainly ramp up think access we obviously, upsets be will is and team investigating a of top now

Operator

are closing to There hand this further remarks. back the time. you. Thank for at questions floor no I'll management

James Brown

Take up. With like always, And to or you just forward give time. care. We for call look us. as free feel to we'd please to contact that, us a your thank catching

Operator

All concludes great Have evening. This disconnect. may today's a you. parties Thank conference.

DURECT (DRRX) 7 Mar 232022 Q4 Earnings call transcript