DURECT Corp, Inc. (NASDAQ:DRRX) Q1 2022 Earnings Conference Call May 4, 2022 4:30 PM ET

Company Participants

Matthew Hogan - IR

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

Norman Sussman - Chief Medical Officer

Conference Call Participants

François Brisebois - Oppenheimer

Thomas Yip - HC Wainwright

Geoffrey de Sibert - KB Advisors

Matthew Hogan

Good afternoon, and welcome to our First Quarter 2022 Earnings Conference Call. This is Matt Hogan, from DURECT Corporation.

Before beginning, I'd 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.

Let me now turn to our financials, which were pretty uneventful in the first quarter. Total revenues in the first quarter of 2022 were $1.9 million, compared to $2.2 million in the first quarter 2021.

R&D expense was $8.2 million in Q1 2022, as compared to $8 million in Q1 2021. The increase was primarily due to higher clinical trial expenses and higher contract manufacturing costs for larsucosterol.

SG&A expenses were $3.7 million in the first quarter of 2022, as compared to $3.5 million in Q1 2021, primarily due to higher patent expenses and higher consulting and market research expenses.

At March 31, 2022, we had cash and investments of $64.4 million, as compared to $70 million at December 31, 2021. That decrease was only $5.6 million, but we benefited from receiving around $4.6 million from Innocoll related to the POSIMIR deal, net of our fee to the investment bank that assisted in the transaction. If you exclude this, our underlying burn rate during the quarter was $10.2 million.

With that, let me turn the call over to Jim for an update on certain of our programs.

James Brown

Thank you, Matt. Hello, everyone, and thank you for joining us today for our first quarter 2022 update.

Our primary focus at DURECT is on the AHFIRM trial of larsucosterol for the treatment of alcohol-associated hepatitis, or AH. AH is a lethal and costly disease that is an unmet medical need with no approved therapy that results in about 137,000 hospitalizations per year in the United States and a 90-day mortality rate of approximately 30%. The average cost of treating a hospitalized AH patient can range from $56,000 to $151,000, with many patients requiring a liver transplant, which can cost upwards of $875,000.