DURECT CORPORATION This Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three and six months ended
Overview
We are a biopharmaceutical company advancing novel and potentially lifesaving investigational therapies derived from our Epigenetic Regulator Program. Larsucosterol (also known as "DUR928"), a new chemical entity in clinical development, is the lead candidate in our Epigenetic Regulator Program. An endogenous, orally bioavailable small molecule, larsucosterol has been shown in both in vitro and in vivo studies to play an important regulatory role in lipid metabolism, stress and inflammatory responses, and cell death and survival. We are developing larsucosterol for alcohol-associated hepatitis ("AH"), a life-threatening acute liver condition with no approved therapeutics and a 28-Day and 90-Day historical mortality rate of 20%-26% and 29%-31%, respectively. After completing a Phase 2a trial in which 100% of AH patients treated with larsucosterol survived the 28-Day study period, we are now conducting a ~300-patient, double-blind, placebo-controlled Phase 2b clinical trial called AHFIRM (trial in AH to evaluate saFety and effIcacy of laRsucosterol treatMent). Through our AHFIRM trial, we are evaluating larsucosterol's potential to reduce mortality or liver transplantation compared to a placebo with or without steroids at the investigators' discretion. Currently we anticipate dosing the last patient in the AHFIRM trial in mid-2023. If the AHFIRM trial is successful, it may support a New Drug Application ("NDA") filing and we may decide to develop our own commercial, sales and marketing organization. We have also investigated larsucosterol in patients with nonalcoholic steatohepatitis ("NASH") with encouraging results in a Phase 1b clinical trial and are considering further development for this and other indications.
In addition to our Epigenetic Regulator Program, we developed a novel and
proprietary post-surgical pain product called POSIMIR that utilizes our
innovative SABER platform technology to enable continuous sustained delivery of
bupivacaine, a non-opioid local analgesic, over three days in adults. In
NOTE: POSIMIR® is a trademark of
19
--------------------------------------------------------------------------------
As a result of the assignment of certain patent rights,
Additional details of these programs and related strategic agreements are
contained in our annual report on Form 10-K for the year ended
Epigenetic Regulator Program and New Chemical Entities
Epigenetic regulation influences the expression of genes through the silencing or initiation of gene activity without modifying the DNA sequence. For instance, methylation of cytosine nucleotides in promoter regions of DNA, facilitated by DNMTs, will generally result in downregulation of gene expression, while demethylation generally results in upregulation. DNA methylation/demethylation can thus regulate the expression of relevant genes, especially clusters of master genes that further modulate crucial cellular activities.
In
The biological activity of larsucosterol has been demonstrated in over a dozen different animal disease models involving three animal species. Some of these models represent acute organ injuries (e.g., LPS-induced endotoxin shock, drug-induced acute oxidative stress injury, ischemic-reperfusion-induced kidney and brain injury, and some represent chronic metabolic disorders (e.g., diabetes-NASH and NAFLD).
Our major product research and development efforts for larsucosterol are described in the following table:
[[Image Removed]]
20--------------------------------------------------------------------------------
In pharmacokinetic ("PK") and toxicology studies conducted in mice, rats, rabbits, dogs, minipigs and monkeys, larsucosterol has been found to be well tolerated and safe by all routes of administration tested to date. These results support the use of larsucosterol in completed and ongoing human safety, PK, proof-of-concept, and efficacy trials. The chronic toxicity of larsucosterol was further assessed in a 6-month oral study in rats and in a 9-month oral study in dogs. These studies support the use of larsucosterol in long duration human trials.
Acute Organ Injury Program with Injectable larsucosterol
Market Opportunity. Alcohol-associated hepatitis (also called "alcoholic
hepatitis" or "AH"), an acute form of alcohol-associated liver disease, is
associated with long-term heavy intake of alcohol and often occurs after a
recent period of increased alcohol consumption. AH is typically characterized by
recent onset jaundice and hepatic failure. AH was associated with approximately
137,000
A Model of End-Stage Liver Disease ("MELD") score is a commonly used scoring system to assess the severity and prognosis of AH patients. There are no FDA approved therapies for AH and stopping alcohol consumption is necessary, but frequently not sufficient for recovery in many moderate and severe patients. Corticosteroids do not improve survival at 90 days or one year, and have demonstrated an increased risk of infection. In addition, fewer than 50% of AH patients are eligible for corticosteroids. According to a recent study, the healthcare costs associated with treating hospitalized AH patients and their length of hospital stay are significant.
Each hospitalization Average length of stay Average total charges
episode with AH diagnosis during hospital stay
for patients who:
Died during the 9 days $147,000
hospitalization
Were discharged 6 days $53,000
Marlowe, N., Lam, D., Krebs, W., Lin, W. & Liangpunsakul, S. (2022) Prevalence,
co-morbidities, and in-hospital mortality of patients hospitalized with
alcohol-associated hepatitis in
The rate of AH patients undergoing liver transplantation has been increasing in
recent years, although the total number of such transplants is still relatively
small. Average charges for a liver transplant exceed
Clinical Program. In 2019, we completed a Phase 2a clinical trial evaluating
safety and PK of intravenously infused larsucosterol in patients with moderate
and severe AH. This was an open label, dose escalation (30 mg, 90 mg and 150
mg), multi-center
In this Phase 2a trial, dose escalation was permitted following review of safety
and PK results of the prior dose level by a Dose Escalation Committee. The
target number of patients for the study was 4 per dose group. Final enrollment
included 19 patients with moderate (7 of 19) and severe AH (12 of 19), who
received larsucosterol intravenously at 30 mg, 90 mg, or 150 mg doses. Eight
patients (four moderate and four severe) were dosed at 30mg, seven patients
(three moderate and four severe) were dosed at 90mg and four patients (all
severe) were dosed at 150mg. After being discharged on Day 2, one patient did
not return for the scheduled Day 7 and Day 28 follow-up visits; therefore
In
21
--------------------------------------------------------------------------------
All 19 patients treated with larsucosterol in this trial survived the 28-day
follow-up period and there were no drug-related serious adverse events. Using an
alternative measure of AH severity to MELD, Maddrey's Discrimination Function
("DF"), 15 of the 19 patients had DF scores of 32 or greater, indicating that
they had severe AH. Patients treated with larsucosterol had a statistically
significant reduction from baseline in bilirubin at Day 7 and 28 and MELD at Day
28.
[[Image Removed]]
1) Our advisor, Dr. Craig McClain from UL, shared anonymized data from his
study, in which 15 AH patients with initial MELD scores ranging from 15-30
received either supportive care alone (n=8 moderate AH patients) or
supportive care with corticosteroids (n=7 severe AH patients). Two of the
UL control patients died by Day 28.
2) One patient in the larsucosterol (also known as "DUR-928") group did not
return for the Day 7 or 28 visit. All 19 patients, including this one,
treated with larsucosterol in this trial survived the 28-Day follow-up
period.
3) Lille scores in the larsucosterol group were significantly lower than that
of the UL patients (p=0.01; Wilcoxon's Rank Sum Test).
22--------------------------------------------------------------------------------
As shown in the table below, all patients in the 30 mg and 90 mg larsucosterol
dosing groups were treatment responders based on their
AH Patient Category n1 Responders Lille
(Lille<0.45) Median (Quartile)
All Patients2 18 89% 0.10 (0.04, 0.20)
30 mg or 90 mg larsucosterol 3 14 100% 0.05 (0.04, 0.19) DF?32 (SAH)2, 4
15 87% 0.19 (0.05, 0.22)
30 mg or 90 mg larsucosterol 3 11 100% 0.12 (0.05, 0.19) MELD 21-302
12 83% 0.19 (0.11, 0.25)
30 mg or 90 mg larsucosterol 3 8 100% 0.19 (0.10, 0.19) Baseline bilirubin >8mg/dl2 11 82% 0.10 (0.05, 0.20) 30 mg or 90 mg larsucosterol 3 8 100% 0.10 (0.05, 0.19)
1) One patient did not return for Day 7 and 28 visits.
2) Including patients receiving 30 mg, 90 mg and 150 mg of larsucosterol.
3) Excluding patients receiving 150 mg of larsucosterol.
4) DF is calculated using the patient's prothrombin time and serum bilirubin
level. DF was introduced in 1978 as a predictor of significant mortality
risk for AH patients. A DF?32 identified AH patients with a 30-Day
mortality rate of ?50%.
The
A sub-group analysis was conducted to compare severe AH patients in the 30 mg and 90 mg dosing groups (n=8) with well-matched severe AH patients (n=13) who received corticosteroids for 28 days in a contemporaneous study at UL. Patients shown in the chart below in the UL steroid group had a mean baseline MELD of 24.46 and mean baseline Maddrey's DF score of 62.98. The 8 patients in the larsucosterol group had baseline mean MELD of 24.50 and mean baseline Maddrey's DF score of 61.25. All patients treated with larsucosterol survived the 28-Day follow up period, while 3 of the 13 patients (23%) in the UL steroid group died within the first 28 days.
[[Image Removed]]
The steroid group in the above graph includes the 7 severe AH patients treated with steroids from the UL group shown in the MELD vs Lille graph above plus an additional 6 severe AH patients subsequently treated in the UL study.
23
--------------------------------------------------------------------------------
Bilirubin
Bilirubin is formed by the breakdown of red blood cells in the body. The level of total bilirubin in the blood is an indication of how the liver is functioning. Elevated bilirubin levels usually signify liver dysfunction and disease. In this trial (shown in the chart below), patients treated with larsucosterol had a significant early reduction from baseline in bilirubin by Day 7. Patients with more elevated bilirubin at baseline (serum bilirubin >8 mg/dL) had a median reduction from baseline of 25% by Day 7 and 48% by Day 28.
[[Image Removed]]
*p<0.05 compared to baseline (Wilcoxon's Signed Rank Test)
As discussed above, MELD is another commonly used scoring system used to assess
the severity and prognosis of AH patients. Patients with MELD scores of 11-20
are classified as having moderate AH and patients with MELD scores of 21-30 are
classified as having severe AH. As with
[[Image Removed]]
*p<0.05 compared to baseline (Wilcoxon's Signed Rank Test)
24
--------------------------------------------------------------------------------
MELD is calculated based on (a) bilirubin, (b) serum creatinine (sCr), and (c) International Normalized Ratio (INR), which is a measure of prothrombin time.
Safety and Pharmacokinetics
In the Phase 2a study of larsucosterol in AH, larsucosterol was well tolerated at all doses tested. There were no drug-related serious adverse events and only three adverse events designated as possibly or probably related to larsucosterol: one occurrence of moderate generalized pruritus, one mild rash and one grade two alkaline phosphatase elevation. There were no discontinuations, early withdrawals or termination of study drug or study participation due to adverse events. All patients treated with larsucosterol survived through the 28-Day follow-up period. Drug exposures were dose proportional and were not affected by the severity of the disease.
In
In
Phase 1 trials of larsucosterol administered through injection have supported the development of larsucosterol in AH. The initial Phase 1 trial in healthy subjects was a single-site, randomized, double-blinded, placebo-controlled, single-ascending-dose study that evaluated the safety, tolerability and PK of intramuscular (IM) injected larsucosterol. The 24-subject study (16 healthy volunteers on larsucosterol and 8 on placebo) of four escalating dose levels resulted in dose proportional systemic exposure of larsucosterol. Larsucosterol was well-tolerated at all dose levels, with no serious treatment-related adverse events reported. We also conducted a multiple-dose study involving 10 healthy subjects, in which participants received IM-injected larsucosterol for five consecutive days (8 subjects on larsucosterol, 2 on placebo) using the next to highest dose from the single dose study. No serious treatment related adverse events were reported, no subjects withdrew from the study, no accumulation in plasma concentrations were observed with repeat dosing, and the pain scores and injection site reactions were minimal. We also conducted a single-ascending dose intravenous (IV) infusion study with 16 healthy subjects and observed no treatment-related serious adverse events. The systemic exposure following IV infusion was dose proportional.
A Phase 1 drug-drug interaction study conducted in healthy subjects demonstrated that neither orally administered nor intravenously injected larsucosterol at doses tested affected the safety and PK of midazolam, a drug metabolized by CYP3A4, which is one of the important enzymes associated with clinically relevant drug-drug interactions.
We have also conducted a Phase 1b study with injected larsucosterol in patients with impaired kidney function (stage 3 and 4 chronic kidney disease (CKD)) and matched control subjects (MCS), matched by age, body mass and gender with normal kidney function. This study was a single-site, open-label, single-ascending-dose study in two successive cohorts (first a low dose of 30 mg and then a high dose of 120 mg) evaluating safety and PK of intramuscular injected larsucosterol. The low dose cohort consisted of 6 patients with CKD and 3 MCS; the high dose cohort consisted of 5 CKD patients and 3 MCS. In this trial, larsucosterol was well tolerated among all subjects and the PK parameters between the kidney function impaired patients and the MCS were comparable.
Chronic Liver Disease Program with Orally Administered Larsucosterol
Market Opportunity. Non-alcoholic fatty liver disease (NAFLD) is the most
common form of chronic liver disease in both children and adults. It is
estimated that NAFLD affects approximately 30% to 40% of adults and 10% of
children in
Clinical Program. In 2020, we completed a Phase 1b randomized, multi-center,
and open-label clinical study in
25
--------------------------------------------------------------------------------
(ALT, AST and GGT), serum lipids (e.g., triglycerides), biomarkers (e.g., CK-18s, inflammatory cytokines), and insulin resistance (i.e., HOMA-IR), as well as liver fat content and liver stiffness by imaging (e.g., MRI-PDFF (as defined below) and FibroScan®).
Both the 50 mg and 600 mg dose groups showed a statistically significant median reduction at Day 28 from baseline of serum alanine aminotransferase ("ALT") levels at -16% and -17%, respectively. The 600 mg dose group also showed statistically significant median reductions at Day 28 from baseline of serum aspartate aminotransferase ("AST") (-18%) and gamma-glutamyl transferase ("GGT") (-8%), and the 50 mg dose group had a statistically significant reduction at Day 28 from baseline in liver stiffness as measured by Fibroscan (-10%).
Patients in the 50 mg or 150 mg dose groups also had statistically significant median reduction at Day 28 from baseline of serum triglycerides (-13% in the 50 mg group) or LDL-C (-11% in the 150 mg group). Patients with elevated baseline triglycerides (?200 mg/dL; n=16) across all dose groups had a median reduction at Day 28 from baseline of -24% (p <0.01). Furthermore, patients in the 50 mg and 150 mg groups had 22% and 18% median reductions (not statistically significant) of HOMA-IR from baseline respectively after 4 weeks of daily oral dosing of larsucosterol. The 600 mg group did not show a change in HOMA-IR.
At Day 28, 43% of patients in all three dose groups showed ? 10% liver fat reduction from baseline as measured by magnetic resonance imaging - proton density fat fraction (MRI-PDFF). In this subgroup, there was a significant reduction from baseline in median liver fat content (-18%, -19%, and -23%, in the 50 mg, 150 mg and 600 mg groups respectively). The reduction of liver fat content was accompanied by a significant median reduction from baseline of serum ALT (-21%, -19%, and -32%, in the 50 mg, 150 mg and 600 mg groups respectively), as well as both CK-18, M30 and M65 in the 50 mg and 600 mg groups.
Larsucosterol was well tolerated at all three doses evaluated. There were no serious adverse events reported during the study, and no discontinuations, early withdrawals or termination of study drug or study participation due to adverse events. PK parameters after repeat dosing were comparable to those after a single dose (from a prior study), indicating no accumulation of the drug after repeat dosing. We are working with a number of disease experts to determine next steps for larsucosterol in NASH.
We have completed multiple Phase 1 trials in healthy subjects with orally administered larsucosterol. These include single-ascending-dose and multiple-ascending-dose studies as well as a food effect study. In all of these studies larsucosterol was well-tolerated at all dose levels, with no serious treatment-related adverse events reported. Dose-related increases in plasma concentrations were observed and no accumulation in plasma concentrations or food effects were observed with repeat dosing.
We also conducted a Phase 1b trial in cirrhotic and non-cirrhotic NASH patients
and matched control subjects ("MCS") (matched by age, body mass index and gender
with normal liver function) utilizing orally administered larsucosterol. This
was an open-label, single-ascending-dose safety and PK study conducted in
While this study was not designed to assess efficacy, we observed statistically significant reductions from baseline levels of several biomarkers after both doses of larsucosterol. A single oral dose of larsucosterol significantly reduced the levels of both full-length (M65) and cleaved (M30) cytokeratin-18 (CK-18), bilirubin, hsCRP, and IL-18 in these subjects. The mean reduction of full-length CK-18 (a generalized cell death marker) at the measured time point of greatest effect (12 hours after dosing) was 33% in the low dose cohort and 41% in the high dose cohort. The mean decrease of cleaved CK-18 (a cell apoptosis marker) at the measured time point of greatest effect (12 hours after dosing) was 37% in the low dose cohort and 47% in the high dose cohort. The mean reduction of total bilirubin (a liver function marker) at the measured time point of greatest effect (12 hours after dosing) was 27% in the low dose cohort and 31% in the high dose cohort. The mean decrease of high sensitivity C-Reactive Protein (hsCRP) (a marker of inflammation) at the measured time point of greatest effect (24 hours after dosing) was 8% in the low dose cohort and 13% in the high dose cohort. The mean decrease of IL-18 (an inflammatory mediator) at the measured time point of greatest effect (8 hours after dosing) was 4% in the low dose cohort and 8% in the high dose cohort.
We have also conducted a Phase 1b open-label, multi-center
26
--------------------------------------------------------------------------------
Collectively, the biological signals observed in NASH and HI patients plus results from our animal models and cell culture studies suggest potential therapeutic activity of larsucosterol for patients with liver diseases. However, additional studies are required to evaluate the safety and efficacy of larsucosterol, and there is no assurance that these biomarker, clinical chemistry and liver imaging effects will be associated with clinically relevant benefits, or that larsucosterol will demonstrate safety or efficacy in treating liver diseases in our ongoing or future trials.
Approved and
[[Image Removed]]
POSIMIR® (bupivacaine solution)
POSIMIR (bupivacaine solution) for infiltration use is a novel and proprietary product that combines the strength of 660 mg of bupivacaine base with the innovative SABER® platform technology, enabling continuous sustained delivery of a non-opioid local analgesic over three days in adults, which we believe coincides with the time period of the greatest need for post-surgical pain control in most patients. POSIMIR contains more bupivacaine than any other approved single-dose sustained-release bupivacaine product. At the end of surgery, POSIMIR is administered into the subacromial space under direct arthroscopic visualization, where it continuously releases bupivacaine for 72 hours or more.
In
In
27
--------------------------------------------------------------------------------
POSIMIR in
PERSERIS™(risperidone)
In
ORADUR™-ADHD Program
We developed a proprietary drug product for the treatment of ADHD called
Methydur in collaboration with Orient Pharma, a diversified multinational
pharmaceutical, healthcare and consumer products company with headquarters in
Drug Delivery Technologies and Programs
Our drug delivery technologies are designed to deliver the right drug to the right place, in the right amount and at the right time to treat a variety of chronic, acute and episodic diseases and conditions. We aim to improve therapy for a given disease or patient population by controlling the rate and duration of drug administration. In addition, if advantageous for the therapy, our technologies can target the delivery of the drug to its intended site of action.
Our technologies are suitable for providing long-term drug therapy because they can often store highly concentrated, stabilized drugs in a small volume and protect the drug from degradation by the body. This, in combination with the ability to continuously deliver desired doses of a drug, can extend the therapeutic value of a wide variety of drugs, including, in some cases, those which would otherwise be ineffective, too unstable, too potent or cause adverse side effects. In some cases, delivering the drug directly to the intended site of action can improve efficacy while minimizing unwanted side effects elsewhere in the body, which may limit the long-term use of many drugs. Our technologies may thus provide better therapy for chronic diseases or conditions, or for certain acute conditions where longer drug dosing is required or advantageous, by replacing multiple injection therapy or oral dosing, improving drug efficacy, reducing side effects and ensuring dosing compliance. Our technology may thereby improve patients' quality of life by eliminating more repetitive treatments, reducing dependence on caregivers and allowing patients to lead more independent lives.
We currently focus our drug delivery technology efforts around our SABER and CLOUD Bioerodible Injectable Depot Systems. SABER uses a high viscosity base component, such as sucrose acetate isobutyrate (SAIB), to provide controlled release of a drug. When the high viscosity SAIB is formulated with drug, biocompatible excipients and other additives, the resulting formulation is easily injectable with standard syringes and needles. After injection of a SABER formulation, the excipients diffuse away over time, leaving a viscous depot which provides controlled sustained release of drug. CLOUD is a class of bioerodible injectable depot technology which generally does not contain SAIB but includes various other release rate modifying excipients and/or bioerodible polymers to achieve the delivery of drugs for periods of days to months from a single injection.
The SABER technology is the basis of POSIMIR (described above). The SABER
technology is also utilized in our ophthalmic program with Santen Pharmaceutical
Co., Ltd. (
Product Revenues
We also currently generate product revenue from the sale of two product lines:
• ALZET® osmotic pumps which are used for animal research; and
• certain key excipients that are included in Methydur and one excipient that
is included in POSIMIR and in a marketed animal health product.
Because we consider our core business to be developing and commercializing pharmaceuticals, we do not intend to significantly increase our investments in or efforts to sell or market any of our existing product lines. However, we expect that we will continue to make efforts to increase our revenues related to collaborative research and development by extending and expanding our current collaborations as well as entering into additional research and development agreements with third-party collaborators to develop product candidates based on our drug delivery technologies.
Operating Results
Since our inception in 1998, we have generally had a history of operating
losses. At
28
--------------------------------------------------------------------------------
compared with net losses of
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with
Results of Operation
Three and six months ended
Collaborative research and development and other revenue
We recognize revenues from collaborative research and development activities and service contracts. Collaborative research and development and other revenue primarily represents reimbursement of qualified expenses related to collaborative agreements with various third parties to research, develop and commercialize potential products using our drug delivery technologies, and revenue from the recognition of upfront fees and milestone payments in connection with our collaborative or license agreements.
We expect our collaborative research and development and other revenues to fluctuate in future periods pending our efforts to enter into potential new collaborations, our existing third-party collaborators' commitment to and progress in the research and development programs, and any royalty or earn-out revenue recognized from collaborators or counterparties. The collaborative research and development and other revenues associated with our major collaborators or counterparties are as follows (in thousands):
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Total collaborative research and
development and other
revenue (1) $ 606 $ 735 $ 1,101 $ 1,309 (1) Includes: (a) amounts related to earn-out revenue from
(Indivior) with respect to PERSERIS net sales; (b) feasibility programs; (c)
research and development activities funded by Santen Pharmaceutical Co. Ltd.
(Santen ) and (d) royalty revenue from Orient Pharma with respect to Methydur
net sales. Since 2018, we from time to time have been working with Santen on
a limited set of research and development activities funded by Santen .
Product revenue
A portion of our revenues is derived from product sales, which include our ALZET
mini pump product line, and certain excipients that are included in Methydur and
in an animal health product. Net product revenues were
Cost of product revenues
Cost of product revenues were
We had 10 manufacturing employees in each of the six months ended
29
--------------------------------------------------------------------------------
Research and development
Research and development expenses are primarily comprised of salaries, benefits, stock-based compensation and other compensation cost associated with research and development personnel, overhead and facility costs, preclinical and non-clinical development costs, clinical trial and related clinical manufacturing costs, contract services, and other outside costs.
Research and development expenses were
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Larsucosterol $ 8,104 $ 5,955 $ 15,362 $ 11,471
Depot injectable programs 376 441 806 703
POSIMIR 154 785 490 2,459
Gilead - - - 65
Others 183 252 370 710
Total research and development expenses
Larsucosterol
Our research and development expenses for larsucosterol were
We continue to assess the impact of the COVID-19 outbreak on our business, including our larsucosterol Phase 2b trial in alcohol-associated hepatitis; COVID-19 may affect our ability to initiate and/or complete recruitment and data analysis for our clinical trials, including larsucosterol trials, in our planned timeframe.
Depot injectable programs
Our research and development expenses for depot injectable programs were
POSIMIR
Our research and development expenses for POSIMIR were
It is possible that COVID-19 will adversely impact the timing of potential commercialization of POSIMIR which is now controlled by Innocoll.
Gilead Program
Our research and development expenses for the Gilead program were zero in each
of the three and six months ended
30
--------------------------------------------------------------------------------
Other
Our research and development expenses for all other programs were
We cannot reasonably estimate the timing and costs of our research and development programs due to the risks and uncertainties associated with developing pharmaceuticals as outlined in the "Risk Factors" section of this report. The duration of development of our research and development programs may span as many as ten years or more, and estimation of completion dates or costs to complete are highly speculative and subjective due to the numerous risks and uncertainties associated with developing pharmaceutical products, including significant and changing government regulation, the uncertainties of future preclinical and clinical study results, uncertainties related to COVID-19, the uncertainties with our collaborators' commitment to and progress in the programs and the uncertainties associated with process development and manufacturing as well as sales and marketing. In addition, with respect to our development programs subject to third-party collaborations, the timing and expenditures to complete the programs are subject to the control of our collaborators. Therefore, we cannot reasonably estimate the timing and costs of the efforts necessary to complete the research and development programs. For additional information regarding these risks and uncertainties, see "Risk Factors" below.
Selling, general and administrative. Selling, general and administrative expenses are primarily comprised of salaries, benefits, stock-based compensation and other compensation costs associated with finance, legal, business development, sales and marketing and other administrative personnel, overhead and facility costs, and other general and administrative costs.
Selling, general and administrative expenses were
We had 25 selling, general and administrative employees as of
Other income (expense). Interest and other income was
Interest and other expense was
Liquidity and Capital Resources
We had cash, cash equivalents and investments totaling
We used
We generated
We received
31
--------------------------------------------------------------------------------
stock issuance costs related to this financing were approximately
We anticipate that cash used in operating activities in the near future will increase compared to the second quarter of 2022 as we experience higher research and development expenses related to larsucosterol.
In
As of
Any material sales in the public market of our common stock, under the 2021 Sales Agreement or otherwise under the 2021 Registration Statement, could adversely affect prevailing market prices for our common stock.
During the six months ended
The COVID-19 pandemic is continuing to impact our business in several ways. COVID-19 has had a negative impact on orders for our ALZET product line as many ALZET customers reduced their activities during the pandemic. For larsucosterol, we may continue to experience delays in patient enrollment in the Phase 2b AHFIRM clinical trial or disruptions in supplies of larsucosterol or other items required for clinical trials. Delays and potential disruptions would increase the overall costs of development of larsucosterol. We are actively monitoring the impact of COVID-19 and the possible effects on our financial condition, liquidity, operations, clinical trials, suppliers, industry and workforce. However, the full extent, consequences, and duration of COVID-19 and the resulting impact on the Company cannot currently be predicted. We will continue to evaluate the impact that these events could have on our operations, financial position, and the results of operations and cash flows. Additional volatility in capital markets and/or clinical trial delays resulting from the impacts of COVID-19 may also limit our ability to raise capital on acceptable terms, if at all.
We believe that our existing cash, cash equivalents and investments will be
sufficient to fund our planned operations, existing debt and contractual
commitments and planned capital expenditures through at least the next 12 months
from
Depending on whether we enter into additional collaborative agreements in the near term and the extent to which we earn revenues from our collaborative agreements, we may decide to raise additional capital through a variety of sources in the short-term and in the long-term, including:
• the public equity markets; • private equity financings; • collaborative arrangements; and/or • public or private debt.
There can be no assurance that we will enter into additional collaborative agreements or maintain existing collaborative agreements in the near term, will earn collaborative revenues or that additional capital will be available on favorable terms, if at all. If adequate funds are not available, we may be required to significantly reduce or refocus our operations or to obtain funds through arrangements that may require us to relinquish rights to certain of our products, technologies or potential markets, either of which could have a material adverse effect on our business, financial condition and results of operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in ownership dilution to our existing stockholders (assuming convertible debt securities were converted into shares).
Our cash and investments policy emphasizes liquidity and preservation of principal over other portfolio considerations. We select investments that maximize interest income to the extent possible given these two constraints. We satisfy liquidity requirements by investing excess cash in securities with different maturities to match projected cash needs and limit concentration of credit risk by diversifying our investments among a variety of high credit-quality issuers.
32
--------------------------------------------------------------------------------
We are experiencing certain operational and other challenges as a result of COVID-19, which could delay or halt our research and development programs or clinical programs. See Item 1A - Risk Factors for further discussion of the current and expected impact on our business and programs.
Available information
Our corporate website address is www.durect.com. We use the investor relations
page of our website for purposes of compliance with Regulation FD and as a
routine channel for distribution of important information, including news
releases, analyst presentations, financial information and corporate governance
practices. Our filings with the
© Edgar Online, source
