The following is a summary of the DURECT Corporation (DRRX) Q3 2024 Earnings Call Transcript:

Financial Performance:

• DURECT reported Q3 revenue increase to $1.9 million from $1.7 million in the previous year, primarily due to increased product sales offset by decreased collaboration revenue.

• R&D expenses decreased significantly to $2.2 million from $7.2 million due to lower clinical trial expenses and employee costs.

• SG&A expenses decreased from $3.8 million to $3.2 million, attributed to reduced employee, professional services, and legal costs.

• Cash and investments total $10.5 million, with cash utilization of $5.3 million in Q3; sufficient funds through Q1 2025.

• Licensing agreement termination with Innocoll regarding POSIMIR, expecting no material financial impact due to absence of recent royalties.

Business Progress:

• Progress in initiating the confirmatory Phase 3 trial of larsucosterol for Alcohol-Associated Hepatitis (AH), with the FDA confirming a single pivotal trial could support NDA filing.

• Larsucosterol showed significant mortality reduction in Phase 2b AHFIRM trial, potentially making it the first FDA-approved treatment for AH.

• The trial's execution is pending sufficient capital, aiming for top-line data within two years of initiation.

Opportunities:

• The larsucosterol program targets a high-need area with no approved treatments, presenting a potential first-mover advantage in AH treatment.

• Given the high 90-day mortality rate and significant healthcare costs associated with AH, successful commercialization of larsucosterol could lead to substantial market opportunity and healthcare savings.

Risks:

• Financial stability is a concern, with sufficient funds only until Q1 2025, highlighting an urgent need for additional capital to proceed with crucial Phase 3 trials.

• High dependency on the success of the larsucosterol trials, which if failed, could impact the financial and operational future of the company.

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