On Wednesday, Durect Corp (NASDAQ:DRRX) maintained a Neutral stock rating, despite the recent announcement that the U.S. Food and Drug Administration (FDA) has awarded Breakthrough Therapy designation (BTD) to its drug candidate, larsucosterol, for the treatment of severe alcohol-associated hepatitis (AH). The BTD was supported by findings from the Phase 2b AHFIRM study.
The AHFIRM study, which concluded with its results first reported in November 2023, did not demonstrate statistical significance for larsucosterol at either dosage level in the primary and key secondary endpoints across the entire study population.
However, a more focused analysis of the subset of patients from the United States, who comprised 76% of the participants, showed a significant reduction in mortality at 90 days.
Mortality was reduced by 57% in the 30 mg arm and by 58% in the 90 mg arm when compared to the standard-of-care, with p-values of 0.014 and 0.008 respectively.
The biopharmaceutical company is expected to present a more comprehensive efficacy dataset from the AHFIRM trial at the European Association for the Study of the Liver (EASL) Congress 2024.
This event is scheduled to take place from June 5 to June 8, 2024, in Milan, Italy. The presentation, titled "Results of a phase 2b multicenter randomized trial of larsucosterol for the treatment of severe alcohol-associated hepatitis (AHFIRM trial)," is anticipated to offer further insights into the drug's performance.
Investors and analysts are looking forward to the details of a forthcoming Phase 3 trial for larsucosterol that will incorporate feedback from a Type C meeting with the FDA.
This trial is considered the next significant milestone for Durect as it advances the drug candidate towards potential commercialization.
The outcome of this trial could have important implications for the company's future prospects and stock performance.
InvestingPro Insights
As Durect Corp (NASDAQ:DRRX) prepares for the next phase of larsucosterol's development, recent data from InvestingPro reveals a complex financial landscape for the company. With a market capitalization of $40.04 million and a striking one-year price total return of -80.0%, Durect's stock has experienced significant volatility. Despite this, the company has seen a robust short-term return, with a one-week price total return of 34.38% and a one-month price total return of 60.25%.
InvestingPro Tips highlight a high shareholder yield and a significant return over the last week, indicating a potential rebound in investor confidence following the BTD announcement. However, analysts caution that Durect is quickly burning through cash and suffers from weak gross profit margins, as evidenced by the -272.18% gross profit margin for the last twelve months as of Q1 2024. These challenges are compounded by the analysts' consensus that the company will not be profitable this year, and the valuation implies a poor free cash flow yield.
Investors considering Durect's prospects may find these insights valuable when assessing the stock's potential. For those looking for additional analysis and tips, there are 10 more InvestingPro Tips available for Durect Corp at https://www.investing.com/pro/DRRX. Moreover, readers can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a more comprehensive investment analysis tool.
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