In a July 30 research note, analyst Francois Brisebois with Laidlaw & Co. reported that DURECT Corp. (DRRX:NASDAQ) is due for a $5 million payment from Indivior because the FDA recently approved Indivior's drug, Perseris. Perseris is a risperidone-containing, long-acting drug, injected once monthly, for the treatment of schizophrenia in adults.
Brisebois explained that this milestone payment is part of the 2017 agreement between the two companies, in which DURECT licensed some of its intellectual property, including patent rights, to Indivior in exchange for compensation. Along with the payment on FDA approval, DURECT also will receive, quarterly, a percentage of revenue from net Perseris sales in the U.S.
"We see this news as positive," wrote Brisebois, adding that DURECT's balance sheet is benefitting from the company's relationship with Indivior. DURECT can use that cash stream to continue advancing DUR-928, "which we continue to view as the main reason to own DURECT."
With respect to its DUR-928 platform, "encouraging" news is that the biopharmaceutical firm remains on schedule to deliver in H2/18 interim data from its two DUR-928 Phase 2 studies, one for the treatment of primary sclerosing cholangitis and the other for alcoholic hepatitis, Brisebois noted. Additionally, in Q3/18, DURECT is slated to launch a third Phase 2 trial, this one in psoriasis.
Laidlaw maintains its Buy rating and its $2.50 per share price target on DURECT Corp., whose stock is trading today at around $1.47 per share.
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Disclosures from Laidlaw & Co., DURECT Corp., July 30, 2018
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