DURECT Corporation (NASDAQ:DRRX) Q4 2019 Results Earnings Conference Call March 3, 2020 4:30 PM ET Company Participants Mike Arenberg - Chief Financial Officer Jim Brown - President, Chief Executive Officer WeiQi Lin - Executive Vice President of Research and Development, Principal Scientist Conference Call Participants Eli Merle - Cantor Fitzgerald Mayank Mamtani - FBR Francois Brisebois - Craig-Hallum Edwin Zhang - Stifel Ed Arce - H.C. Wainwright Operator Greetings and welcome and to the DURECT Corporati ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-31615 DURECT CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-3297098 (State or other jurisdiction of inc ...

DURECT Corp (NASDAQ:DRRX) Q3 2019 Earnings Conference Call November 4, 2019 4:30 PM ET Company Participants Michael Arenberg - CFO James Brown - Co-Founder, CEO, President & Director WeiQi Lin - SVP, Research & Development Conference Call Participants Eliana Merle - Cantor Fitzgerald & Co. Adam Walsh - Stifel, Nicolaus & Company Antonio Arce - H.C. Wainwright & Co. Operator Greetings, and welcome and to the DURECT's Third Quarter Conference Call. [Operator Instructions]. Please note this conference is being ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-31615 DURECT CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-3297098 (State or other jurisdiction of incorpor ...

DURECT Corporation (NASDAQ:DRRX) Q2 2019 Results Earnings Conference Call August 1, 2019 4:30 PM ET Company Participants Mike Arenberg - CFO Jim Brown - President and CEO Conference Call Participants Adam Walsh - Stifel Ed Arce - H.C. Wainwright and Co. François Brisebois - Laidlaw Doug Adams - Tocqueville Asset Management Operator Greetings and welcome to the DURECT Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to in ...

Financial Data and Key Metrics Changes - Total revenues increased to $4.1 million in Q1 2019 from $3.5 million in Q1 2018, representing a growth of approximately 17% [6] - Product revenue from ALZET pumps and LACTEL Polymers rose to $2.6 million in Q1 2019 compared to $2.4 million in Q1 2018, showing a 8.3% increase [6] - Gross margin for ALZET and LACTEL product lines was 57% in Q1 2019 [6] - R&D expenses decreased to $6.3 million in Q1 2019 from $7.0 million in Q1 2018, primarily due to lower costs associated with POSIMIR [7] - SG&A expenses increased to $3.5 million in Q1 2019 from $3.2 million in Q1 2018 [7] - Cash and investments at March 31, 2019, were $28.8 million, down from $34.5 million at December 31, 2018 [7] Business Line Data and Key Metrics Changes - DUR-928 is being developed for three indications: alcoholic hepatitis (AH), non-alcoholic steatohepatitis (NASH), and psoriasis [9] - The company initiated dosing in NASH and psoriasis trials of DUR-928 during Q1 2019 [8] - Preliminary data from the ongoing Phase IIa clinical trial of DUR-928 in AH showed that all patients dosed survived through the trial period of 4 weeks [40] Market Data and Key Metrics Changes - Alcoholic hepatitis is a significant health issue, with over 320,000 hospitalizations annually in the U.S. and a short-term mortality rate of 30% to 50% for severe cases [42][43] - Alcohol-related liver disease is now the leading indication for liver transplantation in the U.S. [36][43] Company Strategy and Development Direction - The company plans to submit a response to the Complete Response Letter for POSIMIR and anticipates a 6-month FDA review period [14] - The focus is on developing DUR-928 as a potential treatment for alcoholic hepatitis, with hopes of starting a pivotal trial in 2020 [57] - The company aims to address the significant unmet medical need in alcoholic hepatitis, where current treatment options are limited [73] Management's Comments on Operating Environment and Future Outlook - Management highlighted the encouraging preliminary data from the DUR-928 trial, indicating potential efficacy in treating alcoholic hepatitis [40][57] - The management expressed optimism about the potential for DUR-928 to reduce mortality in patients with alcoholic hepatitis [57] - The company recognizes the high mortality rates associated with alcoholic hepatitis and the need for novel therapies [36][57] Other Important Information - The company has completed 16 clinical trials in the POSIMIR program involving over 1,400 patients [15] - The company receives quarterly earnout payments based on a single-digit percentage of U.S. net sales of Indivior's PERSERIS product, which is projected to generate $200 million to $300 million in peak-year net revenue [17] Q&A Session Summary Question: What is the current status of the DUR-928 trial? - The trial has completed dosing in all 10 patients, with no drug-related safety issues reported [46] Question: What are the expected outcomes for the DUR-928 trial? - The company anticipates presenting data from the completed trial at the American Association of the Study of Liver Disease meeting this fall [41] Question: How does the company view the competitive landscape for alcoholic hepatitis treatments? - There are currently no approved treatments for alcoholic hepatitis, highlighting a significant unmet medical need [73]

```markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's financial statements, management's analysis, market risk disclosures, and controls [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section provides the company's condensed balance sheets, statements of comprehensive loss, cash flows, and related notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This section provides a detailed overview of the company's financial position, including assets, liabilities, and equity Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $27,641 | $31,644 | | Total current assets | $36,474 | $41,740 | | Operating lease right-of-use assets | $7,028 | $0 | | Total assets | $51,745 | $49,999 | | **Liabilities & Equity** | | | | Total current liabilities | $9,743 | $7,662 | | Operating lease liabilities, non-current | $5,440 | $0 | | Term loan, non-current portion, net | $20,670 | $20,533 | | Stockholders' equity | $14,358 | $20,000 | | Total liabilities and stockholders' equity | $51,745 | $49,999 | - The company adopted the new lease accounting standard (Topic 842) effective January 1, 2019, resulting in the recognition of operating lease right-of-use assets of **$7.3 million** and lease liabilities of **$7.7 million**[32](index=32&type=chunk)[43](index=43&type=chunk) [Condensed Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Loss) This section details the company's revenues, expenses, and net loss over the reporting period Statements of Comprehensive Loss (in thousands, except per share amounts) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Total revenues | $4,131 | $3,488 | | Research and development | $6,251 | $6,952 | | Selling, general and administrative | $3,454 | $3,194 | | Loss from operations | ($6,710) | ($7,832) | | Net loss | ($7,130) | ($8,297) | | Net loss per share (Basic & Diluted) | ($0.04) | ($0.05) | - Total revenues increased to **$4.1 million** in Q1 2019 from **$3.5 million** in Q1 2018, driven by higher product revenue. The **net loss narrowed year-over-year**, primarily due to lower research and development expenses[15](index=15&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities Statements of Cash Flows (in thousands) | Cash Flow Activity | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,656) | ($6,688) | | Net cash provided by investing activities | $1,596 | $2,535 | | Net cash provided by financing activities | $57 | $14,103 | | Net decrease/(increase) in Cash | ($4,003) | $9,950 | | Cash, cash equivalents, and restricted cash, end of period | $27,791 | $39,475 | - Cash used in operations decreased to **$5.7 million** in Q1 2019 from **$6.7 million** in Q1 2018. Financing activities provided significantly less cash (**$57,000**) compared to the prior year (**$14.1 million**), which had included proceeds from common stock issuances[23](index=23&type=chunk) [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail accounting policies, strategic agreements, financial instruments, debt, and capital needs - The company has an accumulated deficit of **$475.8 million** and expects negative cash flows to continue, requiring substantial funds for research and development. Management plans to seek additional funding through collaborative agreements and financing activities[28](index=28&type=chunk) - Sandoz AG **terminated its license agreement** for POSIMIR effective January 27, 2019. The parties are in dispute over Sandoz's obligation to pay a termination fee[58](index=58&type=chunk) - Pain Therapeutics **terminated its agreement** for REMOXY ER effective June 18, 2019, returning all commercialization rights to DURECT[52](index=52&type=chunk) - The company has a **$20.0 million term loan** with Oxford Finance. An amendment in November 2018 extended the first principal payment date to June 1, 2020, and the final maturity date to November 1, 2022[65](index=65&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's pipeline, operational results, and liquidity, focusing on DUR-928 and financial outlook [Overview and Pipeline](index=20&type=section&id=Overview%20and%20Pipeline) DURECT's strategy focuses on advancing product candidates like DUR-928, POSIMIR, and ORADUR-ADHD through collaborations - The lead candidate, DUR-928, is in Phase 1 and 2 development for multiple indications, including alcoholic hepatitis (AH), acute kidney injury (AKI), nonalcoholic steatohepatitis (NASH), and psoriasis[80](index=80&type=chunk) - In the ongoing Phase 2a trial for DUR-928 in alcoholic hepatitis (AH), preliminary data from 9 patients showed a **median Lille score of 0.04**, significantly better than a historical control cohort, suggesting a good prognosis[90](index=90&type=chunk)[92](index=92&type=chunk) - The company plans to submit a response to the FDA's Complete Response Letter for POSIMIR in the second quarter of 2019, expecting a 6-month review period[119](index=119&type=chunk) - Partner Indivior **commercially launched PERSERIS** in February 2019; DURECT receives **single-digit percentage earn-out payments** on U.S. net sales[120](index=120&type=chunk) - Partner Orient Pharma obtained marketing authorization for Methydur (ORADUR-Methylphenidate ER) in Taiwan for ADHD and expects a commercial launch in 2019[122](index=122&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes Q1 2019 financial performance, highlighting changes in revenues, R&D, and SG&A expenses Total Revenue Breakdown (in thousands) | Revenue Source | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Collaborative R&D and other | $1,500 | $1,096 | | Product revenue, net | $2,631 | $2,392 | | **Total revenues** | **$4,131** | **$3,488** | Research & Development Expenses by Program (in thousands) | Program | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | DUR-928 | $4,196 | $4,088 | | Depot injectable programs | $1,265 | $973 | | POSIMIR | $722 | $1,738 | | ORADUR-ADHD | $17 | $32 | | Others | $51 | $121 | | **Total R&D expenses** | **$6,251** | **$6,952** | - The decrease in R&D expenses was primarily due to lower costs for POSIMIR (**$1.0M decrease**), partially offset by higher spending on DUR-928 (**$0.1M increase**) and depot injectable programs (**$0.3M increase**)[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position and capital resources are discussed, along with future funding needs for operations - Cash, cash equivalents, and investments totaled **$28.8 million** at March 31, 2019[159](index=159&type=chunk) - Net cash used in operating activities was **$5.7 million** for the three months ended March 31, 2019[160](index=160&type=chunk) - The company has an effective shelf registration statement allowing it to offer up to **$175.0 million** of securities, including up to **$75.0 million** of common stock through a sales agreement with Cantor Fitzgerald[163](index=163&type=chunk) - Management believes existing cash and anticipated revenues are **sufficient to fund planned operations for at least the next 12 months**[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no significant changes in the company's market risks since the prior annual report - There were **no significant changes in market risks** during the three months ended March 31, 2019[171](index=171&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no significant changes in internal control over financial reporting - The principal executive and financial officers concluded that the company's **disclosure controls and procedures are effective**[172](index=172&type=chunk) - **No significant changes were made to the company's internal control over financial reporting** during the most recently completed fiscal quarter[173](index=173&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and required exhibits [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings - The company is **not currently a party to any material legal proceedings**[176](index=176&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.Risk%20Factors) Significant risks to the business, intellectual property, industry, and common stock are outlined, including regulatory and financial challenges - The company received a notification from Nasdaq on December 24, 2018, for failing to meet the **$1.00 minimum bid price requirement** and has until **June 24, 2019, to regain compliance**[230](index=230&type=chunk)[231](index=231&type=chunk) - The Epigenetic Regulator Program (DUR-928) is in **early development stages** and involves a **novel therapeutic approach**, which may face greater risks of failure, require more resources, and have a more demanding regulatory pathway[178](index=178&type=chunk) - **Prospects for POSIMIR are uncertain** following the failure of the PERSIST trial to meet its primary endpoint and the termination of the licensing agreement by Sandoz[183](index=183&type=chunk) - The company has a significant amount of debt (**$20M term loan**), and failure to comply with covenants could lead to acceleration of repayment obligations[188](index=188&type=chunk)[189](index=189&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - **None**[240](index=240&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications (Section 302 and 906) and XBRL data files - Exhibits filed include **certifications from the CEO and CFO** as required by the Sarbanes-Oxley Act, and XBRL interactive data files[240](index=240&type=chunk)[241](index=241&type=chunk) ```

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-31615 DURECT CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-3297098 (State or other jurisdiction of ...

DURECT Corporation (NASDAQ:DRRX) Q4 2018 Earnings Conference Call March 7, 2019 4:30 PM ET Company Participants Mike Arenberg - Chief Financial Officer Jim Brown - President and Chief Executive Officer Conference Call Participants François Brisebois - Laidlaw & Company Neil Carnahan - Stifel, Nicolaus & Company Thomas Yip - H.C. Wainwright Doug Adams - Tocqueville Asset Management Operator Greetings and welcome to the DURECT Corporation Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator I ...