Financial Data and Key Metrics Changes - Total revenues in 2024 were $2 million, a decrease from $2.6 million in 2023, and $0.5 million for the fourth quarter of 2024 compared to $0.9 million for the prior year [5] - R&D expenses were $10.4 million in 2024, down from $29.4 million in the prior year, with fourth quarter expenses at $1.9 million compared to $5.6 million in 2023 [6] - SG&A expenses were $10 million in 2024, compared to $12.7 million in the prior year, and $2 million for the fourth quarter of 2024 compared to $2.2 million for the prior year [7] - Cash and investments at the end of 2024 were $12 million, down from $29.8 million at the end of 2023, with sufficient funds to support operations through the third quarter of 2025 [8] Business Line Data and Key Metrics Changes - The decrease in revenues was attributed to lower earn-out revenue from Indivior, reduced revenue from feasibility agreements, and lower sales of excipients [6] Company Strategy and Development Direction - The company completed the sale of the Allset product line in the fourth quarter of 2024, using proceeds to repay its term loan, resulting in a debt-free status [9] - The focus is on developing larsucosterol for alcohol-associated hepatitis, with plans to explore funding options through strategic partnerships and capital markets [10] Management's Comments on Operating Environment and Future Outlook - Management highlighted the significant mortality associated with alcohol-associated hepatitis, with larsucosterol showing nearly 60% reductions in mortality in Phase 2b trials [11][13] - The FDA granted breakthrough therapy designation for larsucosterol, and the company is committed to advancing its Phase 3 trial, expecting to report top-line data in approximately two years [14][15] Other Important Information - The company is actively exploring strategic partnerships and business development opportunities to support the Phase 3 study [38] Q&A Session Summary Question: Estimated cost of the Phase 3 trial - The estimated cost for the Phase 3 trial is approximately $20 million [18] Question: Clarification on hospitalization to first dose variations - Management explained the importance of timely intervention, noting that in the US, patients are typically treated within four days, while in poorer performing regions, it can take up to two weeks [30] Question: Updates on potential strategic partnerships - The company is actively exploring various possibilities for partnerships to advance the product, though specifics could not be disclosed [38] Question: Possibility of a smaller Phase 2b study - Management indicated that conducting a Phase 3 trial is more efficient than a smaller Phase 2b study, given the need for a larger patient cohort [46] Question: Opportunities for non-funded studies in ex-US countries - There is potential for conducting regional studies with ex-US partners, although the current focus remains solely on alcohol-associated hepatitis [50]

Company Performance - Durect reported a quarterly loss of $0.06 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.27 per share a year ago, representing an earnings surprise of -200% [1] - The company posted revenues of $0.45 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 93.44%, and down from $2.67 million in the same quarter last year [2] - Over the last four quarters, Durect has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - Durect shares have increased by approximately 13.1% since the beginning of the year, contrasting with a decline of -1.8% in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on $2 million in revenues, and for the current fiscal year, it is -$0.52 on $7.05 million in revenues [7] Industry Outlook - The Medical - Drugs industry, to which Durect belongs, is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Durect's stock performance [5][6]

Financial Performance - Total revenues for Q4 2024 were $0.5 million, a decrease of 44.4% compared to $0.9 million in Q4 2023[9] - Net income for Q4 2024 was $7.8 million, compared to a net loss of $1.4 million in Q4 2023[9] - For the full year 2024, total revenues were $2.0 million, down from $2.6 million in 2023, representing a decline of 23.1%[9] - The net loss for the full year 2024 was $7.9 million, significantly improved from a net loss of $27.6 million in 2023[9] - The net loss for Q4 2024 was $7,754,000, compared to a net loss of $1,441,000 in Q4 2023[17] - Loss from continuing operations for the twelve months ended December 31, 2024, was $17,964,000, compared to $27,630,000 in 2023[17] - Income from discontinued operations for Q4 2024 was $9,469,000, significantly higher than $307,000 in Q4 2023[17] - Net income per share for Q4 2024 was $0.25, compared to a loss of $0.05 per share in Q4 2023[17] - The total comprehensive income for Q4 2024 was $7,753,000, compared to a loss of $1,443,000 in Q4 2023[17] Cash and Equity - As of December 31, 2024, cash, cash equivalents, and investments totaled $12.0 million, down from $29.8 million at the end of 2023[9] - DURECT's stockholders' equity decreased to $9.6 million as of December 31, 2024, from $14.8 million at the end of 2023[16] Revenue Breakdown - Total revenues for Q4 2024 were $453,000, a decrease of 49% compared to $894,000 in Q4 2023[17] - Product revenue, net for the twelve months ended December 31, 2024, was $135,000, down 57% from $313,000 in 2023[17] Expenses - Research and development expenses for Q4 2024 were $1,853,000, a decrease of 67% compared to $5,615,000 in Q4 2023[17] - Selling, general and administrative expenses for the twelve months ended December 31, 2024, totaled $10,032,000, down 21% from $12,653,000 in 2023[17] Clinical Trials and Product Development - The company plans to initiate a Phase 3 trial for larsucosterol in 2025, contingent on securing sufficient funding[3] - The Phase 2b AHFIRM trial results were published in NEJM Evidence in January 2025, validating larsucosterol's potential for treating alcohol-associated hepatitis (AH)[2] - The Phase 2b trial enrolled 307 patients, with a primary endpoint of 90-day survival[7] Asset Sales - DURECT completed the sale of the ALZET product line for $17.5 million, using the proceeds to repay its term loan[3]

Core Insights - DURECT Corporation has made significant progress in the development of larsucosterol for alcohol-associated hepatitis (AH), with the publication of Phase 2b AHFIRM trial results in a prestigious journal, validating its potential as a treatment [2][9] - The company has strengthened its financial position by selling the ALZET product line, using the proceeds to repay its term loan, which aligns with its strategic goal of advancing larsucosterol development [2][9] - DURECT is planning a Phase 3 trial for larsucosterol, contingent on securing sufficient funding, with topline results expected within two years of trial initiation [9] Financial Highlights - For Q4 2024, DURECT reported total revenues of $0.5 million, a decrease from $0.9 million in Q4 2023, while net income was $7.8 million compared to a net loss of $1.4 million in the same period last year [9] - For the full year 2024, total revenues were $2.0 million, down from $2.6 million in 2023, with a net loss of $7.9 million compared to a net loss of $27.6 million in 2023 [9] - As of December 31, 2024, the company had cash, cash equivalents, and investments totaling $12.0 million, a significant decrease from $29.8 million at the end of 2023 [9] AHFIRM Trial Overview - The AHFIRM trial was a Phase 2b study involving 307 patients with severe AH, evaluating the safety and efficacy of larsucosterol [6] - The primary outcome measure was the 90-day incidence of mortality or liver transplantation, with key secondary endpoints including 90-day survival [6] - The trial received Fast Track and Breakthrough Therapy Designation from the U.S. FDA, highlighting the urgent need for effective treatments for AH [6][11] Larsucosterol Mechanism - Larsucosterol is an epigenetic modulator that inhibits DNA methylation, potentially improving cell survival and reducing inflammation in patients with AH [8][10] - The drug's mechanism of action provides a scientific rationale for its development in treating acute organ injury and chronic diseases [10][11] Future Plans - DURECT aims to initiate the Phase 3 trial for larsucosterol in 2025, with the design incorporating feedback from the FDA and insights from the AHFIRM trial [9] - The company is actively exploring funding options to support the continued development of larsucosterol [2][9]

Company Overview - DURECT Corporation is a late-stage biopharmaceutical company focused on developing epigenetic therapies targeting dysregulated DNA methylation to treat serious conditions, including acute organ injury [3] - The lead drug candidate, larsucosterol, inhibits DNA methyltransferases associated with hypermethylation in acute hepatitis (AH) patients and is in clinical development [3] Financial Results Announcement - DURECT Corporation will report its fourth quarter and full year 2024 financial results on March 26, 2025, followed by a conference call and webcast at 4:30 pm Eastern Time [1][2] Drug Development and Designations - Larsucosterol has received Fast Track and Breakthrough Therapy designations from the FDA for the treatment of AH, indicating its potential significance in addressing this condition [3] - The company is also exploring larsucosterol for other indications, including MASH [3] Additional Product Information - POSIMIR® (bupivacaine solution) is FDA-approved for infiltration use and utilizes the SABER® platform technology, representing another product in DURECT's portfolio [3]

Core Insights - DURECT Corporation will present at the Oppenheimer 35th Annual Healthcare Life Sciences Conference on February 11-12, 2025, with CEO James E. Brown leading the presentation [1][2] - The company is focused on developing epigenetic therapies, particularly targeting dysregulated DNA methylation to treat serious conditions like acute organ injury [3] Company Overview - DURECT is a late-stage biopharmaceutical company known for its lead drug candidate, larsucosterol, which inhibits DNA methyltransferases associated with alcohol-associated hepatitis (AH) [3] - Larsucosterol is currently in clinical development for AH and has received Fast Track and Breakthrough Therapy designations from the FDA [3] - The company is also exploring larsucosterol for metabolic dysfunction-associated steatohepatitis (MASH) [3] - DURECT's POSIMIR® (bupivacaine solution) is FDA-approved for infiltration use and utilizes the SABER® platform technology [3] Presentation Details - The presentation is scheduled for February 11, 2025, from 2:00 to 2:30 PM ET, and will be available via webcast [2] - DURECT management will engage in one-on-one investor meetings during the conference [2]

Core Insights - DURECT Corporation announced the publication of peer-reviewed data from the AHFIRM trial, focusing on the efficacy of larsucosterol for treating alcohol-associated hepatitis (AH) [1][2] - The AHFIRM trial was a Phase 2b study involving 307 patients, assessing the safety and efficacy of larsucosterol compared to placebo [2][4] - The company plans to initiate a Phase 3 trial in 2025, with the FDA indicating that a single successful trial could support a New Drug Application (NDA) [3][6] Trial Details - The AHFIRM trial was a randomized, double-blind, placebo-controlled study with three arms: placebo, larsucosterol 30 mg, and larsucosterol 90 mg [2][4] - The primary outcome measure was the 90-day incidence of mortality or liver transplantation [4][5] - The trial enrolled patients across 62 centers, with 76% of participants from the U.S. [2][4] Efficacy Results - Both larsucosterol doses showed trends in reducing 90-day mortality: 41% reduction (p=0.068) for 30 mg and 35% reduction (p=0.124) for 90 mg compared to placebo [5] - In U.S. patients, mortality reductions were more pronounced: 57% (p=0.014) for 30 mg and 58% (p=0.008) for 90 mg [5] - The overall mortality rates for AH patients are significant, with a third of severe AH patients not surviving beyond three months [3][7] Safety Profile - Larsucosterol was reported to be safe and well-tolerated, with treatment-emergent adverse events similar to those in the placebo group [5][6] - The study highlighted the importance of timely treatment for severe AH patients [5] Regulatory Status - The FDA has granted larsucosterol Fast Track and Breakthrough Therapy Designations for the treatment of AH, reflecting the urgent need for effective therapies in this area [6][9] - The company is focused on developing epigenetic therapies targeting dysregulated DNA methylation, with larsucosterol as its lead candidate [9]

Core Viewpoint - Durect (DRRX) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Durect's Earnings Outlook - For the fiscal year ending December 2024, Durect is expected to earn -$0.50 per share, reflecting a 68.2% change from the previous year's reported number [8]. - Over the past three months, the Zacks Consensus Estimate for Durect has increased by 49%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Durect's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - Durect (DRRX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [3]. - For Durect, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to an increase in stock price [4]. Earnings Estimate Revisions - Durect is expected to earn -$0.50 per share for the fiscal year ending December 2024, representing a 68.2% change from the previous year's reported number [7]. - Over the past three months, the Zacks Consensus Estimate for Durect has increased by 38.2%, indicating a positive trend in earnings expectations [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6]. - Durect's upgrade to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Core Viewpoint - DURECT Corporation has sold its ALZET® line of osmotic pumps to Lafayette Instrument Co. for $17.5 million, allowing the company to focus on its lead drug candidate, larsucosterol, and strengthen its financial position [1][2][3]. Financial Transaction - Lafayette Instrument Co. paid DURECT $17.5 million for certain assets and liabilities associated with the ALZET product line [2]. - The transaction enabled DURECT to pay off all remaining obligations under its term loan agreement with Oxford Finance LLC, enhancing its financial flexibility [2][3]. Strategic Focus - DURECT is prioritizing the development of larsucosterol for alcohol-associated hepatitis (AH) and has determined that the ALZET product line no longer aligns with its long-term strategic priorities [3]. - The sale strengthens DURECT's cash position and extends its cash runway through the first half of 2025, which is crucial for funding the planned Phase 3 clinical trial for larsucosterol [3]. Product Information - The ALZET product line consists of miniature, implantable osmotic pumps designed for research use in laboratory animals, capable of delivering drugs and hormones at controlled rates [5]. - These pumps have been referenced in over 22,000 published scientific studies, indicating their wide application in laboratory research [5]. Company Overview - DURECT Corporation is a late-stage biopharmaceutical company focused on developing epigenetic therapies for serious conditions, including acute organ injury [6]. - Larsucosterol, the company's lead drug candidate, is in clinical development for the treatment of AH and has received Fast Track and Breakthrough Therapy designations from the FDA [6].