DURECT Corp (NASDAQ:DRRX) Q4 2022 Earnings Conference Call March 7, 2023 4:30 PM ET

Company Participants

Timothy Papp - CFO & Secretary

James Brown - Co-Founder, CEO, President & Director

Norman Sussman - Chief Medical Officer

Keith Lui - SVP, Business Development, Commercial & Medical Affairs

Conference Call Participants

Francois Brisebois - Oppenheimer

Kristen Kluska - Cantor Fitzgerald

Antonio Arce - H.C. Wainwright & Co.

Operator

Greetings, and welcome to the DURECT Corporation Fourth Quarter 2022 Earnings Call. [Operator Instructions].

I will now turn the conference over to our host, Tim Papp, Chief Financial Officer. Thank you. You may begin.

Timothy Papp

Good afternoon, and welcome to DURECT Corporation's Fourth Quarter 2022 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 fourth quarter and full year 2022 financial results. Total revenues in 2022 were $19.3 million compared with $14 million in 2021. 2022 revenues included $10 million of milestone payments related to our POSIMIR agreement with Innocoll, while 2021 included approximately $5.2 million of revenue attributed to an upfront license payment and sale of manufacturing supplies and excipients. Innocoll commercially launched POSIMIR in September 2022.

For the fourth quarter of 2022, revenues were $3.3 million compared with $7.3 million for the prior year. This decrease is due to the Innocoll upfront license revenue we recorded in Q4 2021.

R&D expense was $36.9 million in 2022 as compared to $31.8 million for the prior year and $10 million for the fourth quarter compared with $8.4 million for the prior year. The increases were primarily due to higher clinical trial expenses for our ongoing AHFIRM trial, contract manufacturing expenses for larsucosterol and employee and benefit costs, partially offset by a decline in R&D spending on POSIMIR.

SG&A expenses were $15.9 million as compared to $14.4 million for the prior year, primarily due to higher employee benefit costs and patent expenses. For the fourth quarter, SG&A revenues were $4.3 million compared with $4.5 million for the prior year, so relatively flat.