Q1 2024 DURECT Corp Earnings Call
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Greetings and welcome to the drug Corporation first quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone.
On key pad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Tim Popp, Chief Financial Officer. Thank you Sir you may begin.
Good afternoon, and welcome to Durect corporations first quarter 2024 earnings Conference call. This is Tim <unk>, Chief financial officer of direct.
Before we begin I would like to remind you of our safe Harbor statement. During the course of this call. We may make forward looking statements regarding direct products and development expected product benefits, our development plans future clinical trials or projected financial results. These forward looking statements involve risks and uncertainties that can cause actual results to differ materially.
From those in such forward looking statements.
Further information regarding these and other risks can be found in our SEC filings, including our 10-K and 10-Qs under the heading risk factors.
To begin I would like to review, our first quarter 2024 financial results.
Total revenues in the first quarter of 2020 for $1 $8 million compared to $2 $1 million in 2023.
'twenty 'twenty four revenues were lower primarily due to lower revenues from feasibility agreements as well as lower revenue from product sales.
R&D expense was $4 $1 million in the first quarter of 2024 compared to $8 $6 million for the prior year. The decrease was primarily due to lower clinical trial related expenses as we substantially completed the affirmed trial and lower employee related costs.
G&A expenses were $3 $1 million in the first quarter of 2024 compared to $4 1 million for the prior year. The decrease was primarily due to lower market research expenses lower patent expenses as well as lower employee costs.
As of March 31, 2024, we had cash and investments of $21 $6 million as compared to $29 8 million at December 31, 2023, and our cash burn for the first quarter was $8 9 million, excluding net proceeds of approximately $650000 from ATM financing.
We believe our cash on hand is sufficient to fund operations through the end of 'twenty 'twenty four.
Now I would like to turn the call over to Jim for a business update.
Thank you Tim.
Hello, everyone and thank you for joining us today.
We're making good progress towards initiating our phase III clinical trial for electrical sterile and alcohol associated hepatitis.
Through a type C meeting with the FDA, we received feedback that a single phase III trial, if successful could be sufficient to support an NDA filing and a H.
We're in the process of designing a pivotal trial that incorporates the FDA feedback and the key learnings from our affirm phase two b trial.
We are continuing to analyze the clinical data from our firm and believe the data provide a strong foundation for the design of a registrational phase III trial.
We look forward to sharing additional data analyses and the details of the protocol in an update later this year.
We're also excited that the affirmed data has been accepted for an oral late breaker presentation at the upcoming Easel conference in June of this year.
This will be our first opportunity to share with you a firm data with the medical community at a scientific meeting.
We are very encouraged by the continued enthusiasm I've had the hepatology thought leaders and key opinion leaders for the Afirma results and their recognition of our sequel sterols potential can provide a clinically meaningful survival benefit and a H patients.
As a brief reminder, our firm was a placebo controlled.
Trolled double blind multinational study with two active arms.
30, milligram and 90 milligrams of locks equal sterile and the placebo arm of approximately 100 patients each.
In total we randomized 307 patients with severe a H for a global network of clinical sites.
Our sites included renowned liver centers in the United States, Australia, the EU and the U K and we had the honor of working with some of the world's preeminent thought leaders in age.
The topline results and the key secondary endpoint of mortality at 90 days showed a 41% reduction with a 70 milligram dose at less people sterile and a 35% reduction with the 90 milligram dose up unless you've got sterile as compared with placebo.
We also reported a numerical improvement in the primary endpoint of reduction in mortality or liver transplant in 90 days.
Neither the primary or key secondary endpoint results achieved statistical significance.
Even more impressive results were observed in the U S population, which comprised three quarters of the total enrollment in the firm.
And that was 232 out of 307 patients.
In the U S patients we saw reductions in the 90 day mortality, a 57% and 58% for the 30 and 90 milligram arms respectively.
As compared with placebo.
Although not part of the original statistical analysis plan. The P values for these results were both approximately 0.01.
Very importantly, our Sikorsky all exhibited an excellent safety profile with no serious adverse events in either arm and greater than 20% reductions in the number of treatment emergent adverse events for both active arms in these severely ill patients.
Ultimately these clinically meaningful reductions in mortality, coupled with a reduction in adverse events in these severely ill patients reinforced the compelling risk reward proposition for lots of course Carroll.
We continue to believe that the affirmed data provide compelling evidence that loss equaled sterile could represent a safe and effective therapy with lifesaving potential for age patients.
There are no approved therapies for a H today. So it's a simple sterile meets our expectation and the phase III and we were able to gain approval. It would likely be the first FDA approved treatment for this disease and establish a new standard of care.
A H is the cause of more than 160000 hospitalizations each year in the United States and with a 90 day mortality rate of approximately 30% is responsible for tens of thousands of deaths each year.
In addition to its high mortality rate a H represents a significant cost to the U S health care system.
Hospitalizations attributed to a H incur charges between 67 to 180000 per patient.
A total charge to hospitals of approximately $10 billion annually.
As a result, she can still represents a potential blockbuster opportunity in the U S alone that could simultaneously provide overall cost savings to the health care system.
We would now like to take any questions you may have.
Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Our first question comes from Frank.
Display with Oppenheimer <unk> co. Please proceed with your question.
Alright. Thanks for the question I was just wondering if you can share anything around the easel a late break is there should we be expecting new data or can you share anything about kind of progress with the FCA or just any any thoughts on even though it would be helpful. Thank you.
Yeah sure Frank Thanks first of all good do I Didnt catch up yeah. The the late breaker is the first time, we'll have an opportunity to present the data from afar and so we'll be focusing on a lot of what you understood today.
Speaker Change: We won't be giving additional FDA updates beyond what we just talked about it at this call but.
It certainly is a quite an honor to receive an oral late breaker opportunity here and to present the data, they're very important data and as well I believe we should be presenting some additional data.
This fall at the a S. L D meeting as we continue to learn more and more about the results from this trial.
Okay. That's helpful and then in terms of the.
Ah patient severity in any of the meld scores.
Is there you know I know, there's moderate to severe it was kind of a thought has there ever been a thought.
The milder patient population or is that patient population is not necessarily going to the hospital or just any thoughts about.
Yeah, Yeah, the milder different. Thank you yeah. Yeah. We're certainly you know we look at all and I believe this drug will have an opportunity to help all we certainly saw that.
Tendency interface to a.
You know it was a smaller trial, but we treated both moderate and severe patients.
Speaker Change: But our focus right now has been on this would be a patients patients with meld score of 21 to 30.
Speaker Change: Perspective, you have a meld of 'twenty, one that means you've got about 20% chance of dying in the next 90 days.
Speaker Change: And if it's another 30, you have about a 60% chance of dying, so they're very well that being said moderates.
We'll have you know seven to 10 to 15% to 20% chance of dying. So there they're not they're in they're in a dangerous position as well so a lot of the patients in the hospital.
Our auto quote moderate patients, but with it but the objective here and the ultimate goal is to get this product approved but they but the opportunity to hopefully save lives. That's what we're focusing on with this molecule and we think the.
Fastest way to do that is to stay in the severe patient population, where it's easier to distinguish and a benefit.
Benefited the drought, which we certainly saw in the U S data and now further analyses were seeing information that helps really understand things globally as well so all that being said we feel.
Very good about where we're going with the severe I think eventually if the product's approved for severe will we will roll it out for us and moderates as well with additional studies.
Thank you.
Our next question comes from Karl Bryan with Northland Capital markets. Please proceed with your question.
Carl Edward Byrnes: Thanks for the question understanding that you were yet you objected to find the pivotal study in terms of the trial design do you have any target in terms of initiation date internally or anything that you can disclose at this juncture. Thanks, yeah, we'll be breaking that out as the year unfolds, but we are working on that.
Protocol right now, but the hope would be to start it you'll get it underway.
And as soon as we possibly can so I mean, that's because every every month that goes by more patients who are at risk of dying from this disease and so we're doing everything we can to get the the opportunity lined up a new business perspective to be able to to do that and so that's that's our entire focus.
Great. Thanks.
Sure.
Yeah.
Our next question comes from Ed Arce with H C. Wainwright. Please proceed with your question.
Carl Edward Byrnes: I assume that everyone. This is Thomas Yip asking a couple of questions. So thank you very much for your questions.
So first can you discuss some preliminary thoughts on the Ah trial. Besides T T elements of the phase III study, especially efficacy endpoint and perhaps and the parallels or contrast between the phase III study and the phase II study.
Speaker Change: And we absolutely look forward to doing that but I can do it right now because we're still finalizing that protocol, but once we are delighted.
Excuse me and and we're doing it with the learnings that have come from apart. So we'll be able to I think.
Speaker Change: Quite logical layout, what we're looking at the number of patients are the the way the trial will be designed it ended administered there certainly are some some key lessons learned from a firm that I think will help make this a very efficient trial and and with an opportunity to amplify.
You know the the potential efficacy and as I said to get this thing go and get it out of the market as soon as we can.
Understood.
Speaker Change: That said the other key elements with the phase III study, perhaps this is the.
Speaker Change: A way to finance this study.
Can you discuss what are some options.
Perhaps the timing.
Oh Wow.
Speaker Change: Any such discussions to look at it yes, we do we certainly have a number of options in front of us and there's a large effort that they can.
<unk> is undertaking so perhaps can maybe I'll, let you jump in on that one.
Yeah absolutely.
I don't think we're doing anything that is unexpected at this point.
We obviously will need additional financing to complete a phase III and you know that can come from a variety of sources as Jim referred to whether its business development ore or the financial markets. So.
No we can't give you any specifics on the details at this point around timing or or what that might look like but rest assured we're we're.
We're undertaking the appropriate processes to define that financing.
And Mr.
Speaker Change: Thank you again for the other questions, we look forward to a presentation.
And what the phase III trial design to do this year.
Absolutely. Thank you.
It appears that there are no further questions at this time I would now like to turn the floor back over to Jim Brown for closing comments.
James E. Brown: Now with that I just want to thank you all for your attention and your time and as always please feel free to reach out we look forward to catching up with all of you take care bye.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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