DURECT (US:DRRX)2020-08-04 03:46Financial Data and Key Metrics Changes - Total revenue in Q2 2020 was $25.8 million, compared to $4 million in Q2 2019, primarily due to the recognition of $23.1 million in deferred revenue from the Gilead agreement [5] - Excluding deferred revenue, collaborative R&D and other revenue for Q2 2020 decreased by $1.4 million compared to Q2 2019, mainly due to reduced development work on the Gilead project [6] - Product revenue from ALZET pumps and LACTEL polymers was $2.5 million in Q2 2020, up from $2.3 million in Q2 2019 [6] - Gross margin for combined product lines was 61% in Q2 2020 [7] - R&D expenses were $6.7 million in Q2 2020, slightly up from $6.6 million in Q2 2019 [8] - SG&A expenses were $3.4 million in Q2 2020, compared to $3.3 million in Q2 2019 [8] - Cash and investments at June 30, 2020, were $51.3 million, down from $64.8 million at December 31, 2019 [9] Business Line Data and Key Metrics Changes - ALZET revenue saw a drop in April and May due to COVID-19 impacts, but June returned to normal levels [7] - DUR-928 program is advancing with a Phase IIb trial planned for alcoholic hepatitis [12][28] - Positive topline data reported from a 65 patient NASH study with DUR-928 [12][36] Market Data and Key Metrics Changes - There are 117,000 hospitalizations per year in the U.S. for alcoholic hepatitis, with no approved therapies available [14] - Hospitalization costs for alcoholic hepatitis exceed $50,000 per patient in the first year [23] Company Strategy and Development Direction - The company is focused on advancing DUR-928 for severe alcoholic hepatitis and COVID-19 related organ injuries [44][45] - Plans to initiate a Phase IIb trial for DUR-928 in severe alcoholic hepatitis patients in the second half of the year [44] - The company is also working on the POSIMIR NDA and expects to license it to a partner for commercialization [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of DUR-928 in treating severe conditions like alcoholic hepatitis and COVID-19 [47] - The company is preparing for potential challenges in enrollment due to the ongoing COVID-19 pandemic but believes it may enhance enrollment due to increased alcohol consumption [90] - Management is committed to advancing the NASH program while prioritizing immediate opportunities in ICU settings [101] Other Important Information - DUR-928 has shown a wide safety margin and significant improvements in liver fat and stiffness in NASH patients [39][46] - The company continues to respond to FDA inquiries regarding the POSIMIR NDA [47] Q&A Session Summary Question: Timing for COVID-19 study data readouts and NASH next steps - Management is setting up sites for the COVID-19 study and expects data over the next year, depending on infection rates [50][54] - For NASH, management is discussing next steps with KOLs and will design the next study based on comprehensive data analysis [72] Question: Nature of FDA information requests for POSIMIR - Management stated that the FDA is asking standard review questions and emphasized the importance of patience during the review process [61] Question: Dose selection for COVID-19 patients - The 150 mg dose was selected based on safety data from the AH trial and the need to target multiple organs in COVID-19 patients [66] Question: Enrollment challenges in the current environment - Management believes that increased alcohol consumption during the pandemic may lead to higher enrollment rates for the AH trial [90] Question: Rehospitalization rates for AH patients - Management noted that the rehospitalization rate for AH is about 23%, which could positively impact reimbursement levels [98] Question: Future of the NASH program - Management confirmed that the NASH program is not being shelved and will continue to be evaluated alongside other urgent opportunities [101]