SOURCE: Streetwise Reports

Streetwise Reports

October 07, 2016 09:00 ET

The Life Sciences Report Examines How Analysts Keep Focus on DURECT's DUR-928

SAN FRANCISCO, CA--(Marketwired - October 07, 2016) - The FDA's recent Complete Response Letter for Remoxy, which is licensed by DURECT Corp. (NASDAQ: DRRX) to Pain Therapeutics, has not changed the view of several analysts who follow DURECT. They are focused on DUR-928 for NASH and impaired kidney function, indications that are of great interest to Big Pharma.

Included in this article is: DURECT Corp.

On Sept. 26, DURECT Corp. announced that Pain Therapeutics received a "Complete Response Letter (CRL) from the FDA for Pain Therapeutics' New Drug Application (NDA) for REMOXY ER (oxycodone) extended-release capsules CII. Based on its review, the FDA has determined that the NDA cannot be approved in its present form and specifies additional actions and data that are needed for drug approval." DURECT would receive royalties of 6.0% to 11.5% of net sales from Pain Therapeutics.

Pain Therapeutics notes that the "CRL specifies additional actions that are needed in order to obtain approval of REMOXY ER with label claims against three routes of abuse (i.e., injection, inhalation and snorting). These actions may take approximately a year to conduct and may cost approximately $5MM, pending discussions with the FDA and outside clinical/regulatory consultants."

Analyst Jim Molloy of Laidlaw & Company, in a Sept. 30 research report, states that the FDA's action pushes back approval of Remoxy until 2019 at the earliest, and he maintains a Buy on DURECT. He notes DURECT's other programs remain on track: "DUR-928 is still expected to read out Phase 1 data in 4Q16 for both liver (NASH) and kidney, and Posimir remains on track for 4Q17 Phase 3 data on post-surgical pain relief." He places a target price of $3.00 on DURECT, explaining, "Our price target is based on a sum-of-the-parts analysis with the Remoxy royalty at $0.50/share, the Posimir royalty at $1.00/share, DUR-928 at $1.00/share, and net cash (end-2017) tech & legacy polymer business valued at $0.50/share."

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The following companies mentioned in this article are sponsors of Streetwise Reports: DURECT Corp. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

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