DURECT Corporation (NASDAQ:DRRX) Q1 2023 Earnings Conference Call May 8, 2023 4:30 PM ET

Company Participants

Tim Papp - Chief Financial Officer

Jim Brown - Chief Executive Officer

Keith Lui - Senior Vice President, Business Development, Commercial, Medical Affairs

WeiQi Lin - Executive Vice President, Research and Development, Principal Scientist

Norman Sussman - Chief Medical Officer

Conference Call Participants

Kristen Kluska - Cantor Fitzgerald

Ed Arce - H.C. Wainwright

Francois Brisebois - Oppenheimer

Sean Kim - Jones Trading

Operator

Greetings and welcome to the DURECT Corporation First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Tim Papp, Chief Financial Officer. Thank you, Tim. You may begin.

Tim Papp

Good afternoon and welcome to DURECT Corporation’s first quarter 2023 earnings conference call. This is Tim Papp, Chief Financial Officer of DURECT.

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 DURECT’s 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 2023 financial results. Our total revenues in the first quarter were $2.1 million, compared to $1.9 million for the prior year. This increase was due primarily to an increase in collaborative R&D revenue. R&D expense was $8.6 million for the first quarter compared with $8.2 million for the prior year. The increases were primarily due to higher clinical trial expenses for our ongoing AHFIRM trial and contract manufacturing expenses for larsucosterol.

For the first quarter, SG&A expenses were $4.1 million, compared with $3.7 million for the prior year. This increase was primarily due to higher market research expenses, higher audit-related expenses, as well as higher employee expenses. As of March 31st, 2023, we had cash and investments of $44.4 million as compared to $43.6 million at December 31st, 2022.

We completed a registered direct offering in February 2023, raising $8.8 million in net proceeds. Excluding the proceeds from the financing, our cash burn in the first quarter was approximately $8 million. We believe our cash on hand is sufficient to fund operations into the first quarter of 2024.