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Three Shots on Goal in Q4/16 for DURECT Corp.

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With a trifecta of share-moving milestones anticipated in Q4/16, including possible FDA approval of abuse-resistant opioid Remoxy, Laidlaw & Co. Analyst Jim Molloy sees blue sky ahead for DURECT Corp.

Source: DURECT Corporate Presentation

In an Aug. 29 research report reiterating Laidlaw's investment thesis for the company, Molloy outlined imminent catalysts for three candidates in DURECT Corp.'s (DRRX:NASDAQ) pipeline.

The PDUFA (Prescription Drug User Fee Act) date for Remoxy is up first, with Molloy calling the drug "[a] former greenkeeper, now, about to become the Masters champion." Though the abuse-resistant formulation of oxycodone has been "circling FDA approval for two putts, we believe Remoxy is on track to finally get the tap in on the third go at FDA approval this September 25th," the analyst wrote.

"Recent FDA approvals and positive AdCom votes for competitor[s'] abuse deterrent (AD) drugs show the FDA appears to be more accepting of approving AD opioids," Molloy added. Abuse of highly addictive opioids such as oxycodone has been called epidemic in the media and has garnered the attention of political candidates in the 2016 election.

Remoxy is partnered with Pain Therapeutics Inc. (PTIE:NASDAQ), and Molloy notes that "PTIE has clearly signaled their intention to out-license Remoxy rather than try to self-launch this drug." Potential matches include Mallinckrodt Pharmaceuticals (MNK:NYSE) and Endo International (ENDP:NASDAQ), according to the analyst.

A second DURECT candidate, Posimir, is in position to attract a partnership that would "help defray development costs of the ongoing Phase 3 trials (data due 2H17)," Molloy wrote. Posimir is a "non-opioid, locally acting analgesic designed to provide 3 days of continuous pain relief after surgery," according to the company website.

"We believe there is good reason to think that [Posimir] will show statistically significant separation" against bupivacaine in the ongoing Phase 3 PERSIST trial, which has started dosing, Molloy stated.

"We should also see Phase 1 data and IND [investigational new drug] filings for DUR-928 (a new class of steroid that regulates lipid homeostasis) in two separate clinical indications (chronic NASH & acute kidney injury)," Molloy wrote.

"DUR-928 remains an upside wildcard at DRRX with two Phase 1 PK [pharmacokinetics] trials reading out and two INDs expected to be filed by YE16 in acute kidney injury and chronic NASH [nonalcoholic steatohepatitis] conditions," Molloy stated. If the Phase 1 readouts for DUR-928 are positive, Molloy believes that "could drive a sharp value inflection."

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1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in the 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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