Durect (DRRX) AI Stock Analysis

• Market Cap: $18.28M
• Dividend Yield: N/A
• Average Volume (3M): 52.48K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.04
• Revenue Growth: -25.39%
• EPS Growth: 43.88%
• Country: US
• Employees: 21
• Sector: Healthcare
• Sector Strength: 46
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.24
• Shares Outstanding: 31,041,980
• 10 Day Avg. Volume: 61,318
• 30 Day Avg. Volume: 52,477
• PEG Ratio: 0.26
• Price to Book (P/B): 20.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.19
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.75
• Price Target Upside: 824.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Durect's overall stock score reflects significant financial challenges, including declining revenues and persistent losses, which weigh heavily on the evaluation. While the technical analysis shows mixed signals, the company's valuation remains unattractive due to its negative P/E. The earnings call provided some positive insights, particularly regarding cost reductions and the promising development of larsucosterol, which slightly offset the overall negative outlook.

Positive Factors

Clinical Trials

The agreed Phase 3 trial design positions larsucosterol well for success.

Regulatory Approval

The FDA has granted larsucosterol Fast Track Designation and Breakthrough Therapy Designation for the treatment of alcohol-associated hepatitis.

Negative Factors

Financial Risks

DURECT is viewed as a significant 'going concern' risk with its current cash runway that extends into 1Q25.

Funding Challenges

DURECT continues to seek funding for the registrational Phase 3 trial of larsucosterol in patients with severe alcohol-associated hepatitis.

Durect Business Overview & Revenue Model

Company Description

Durect Corporation (NASDAQ: DRRX) is a biopharmaceutical company focused on developing innovative therapies for the treatment of acute and chronic medical conditions. The company specializes in the development of drug delivery technologies and pharmaceutical products that address unmet medical needs, primarily in the areas of pain management, central nervous system disorders, and metabolic diseases. Durect's proprietary drug delivery platforms, including its SABER and ORADUR technologies, are designed to improve the efficacy, safety, and patient compliance of existing and new therapeutics.

How the Company Makes Money

Durect Corporation generates revenue through a combination of product sales, collaborative research and development agreements, and licensing arrangements. The company earns income from its proprietary drug delivery technologies by partnering with other pharmaceutical companies who utilize Durect's platforms to enhance their own drug formulations. Additionally, Durect receives milestone payments and royalties from these partnerships as specific development and commercialization goals are achieved. The company also sells its own developed products, contributing to its revenue streams. Key collaborations with major industry players, as well as the commercialization of its approved therapeutics, are significant factors contributing to Durect's earnings.

Durect Financial Statement Overview

Summary

Durect faces significant financial challenges, marked by declining revenues, persistent losses, and negative cash flows. The balance sheet reflects high leverage and reduced equity, while cash flows indicate inefficiencies in operations. Without substantial improvements in revenue generation and cost management, financial stability may remain elusive.

Income Statement

Durect has experienced a significant revenue decline from 2020 to 2024, with total revenue dropping from $30.1M to $2.03M. Gross profit margins remain positive but are overshadowed by persistent negative EBIT and net profit margins, indicating ongoing operational challenges. Consistently negative EBITDA and net income reflect struggles in cost management and profitability.

Balance Sheet

The company's balance sheet shows a decreasing trend in total assets and equity from 2019 to 2024, with stockholders' equity shrinking significantly. The debt-to-equity ratio remains relatively high, indicating leverage concerns, although recent efforts to reduce debt are noted. The equity ratio has deteriorated, suggesting a reduced buffer for absorbing financial shocks.

Cash Flow

Durect's cash flow situation is concerning, with consistently negative operating and free cash flow over the years. Despite some improvement in investing activities, the operating cash flow to net income ratio remains negative, highlighting inefficiencies in translating income into cash flow. Financing activities have not sufficiently offset the negative cash flows from operations.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.59M	2.03M	8.55M	19.28M	13.98M	30.11M
	Gross Profit
6.78M	1.95M	6.83M	17.70M	12.02M	28.70M
	EBIT
-19.34M	-18.91M	-36.88M	-35.08M	-34.27M	-12.62M
	EBITDA
-15.04M	-18.91M	-24.68M	-32.78M	-33.98M	-11.80M
	Net Income Common Stockholders
-17.07M	-8.32M	-27.62M	-35.58M	-38.13M	-2.52M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.42M	11.80M	29.68M	43.48M	69.81M	40.73M
	Total Assets
53.75M	18.35M	45.19M	60.10M	91.99M	75.64M
	Total Debt
0.00	2.21M	20.75M	23.26M	24.30M	25.82M
	Net Debt
-3.53M	-8.80M	-7.65M	-20.22M	-25.54M	4.50M
	Total Liabilities
29.31M	8.83M	30.41M	35.12M	34.21M	35.53M
	Stockholders Equity
24.44M	9.52M	14.78M	24.98M	57.78M	40.12M
Cash Flow		Free Cash Flow
-20.86M	-19.09M	-34.47M	-26.39M	-37.51M	-38.91M
	Operating Cash Flow
-21.89M	-19.09M	-34.41M	-26.28M	-37.31M	-38.70M
	Investing Cash Flow
-1.00M	18.04M	-1.17M	19.84M	15.31M	9.43M
	Financing Cash Flow
-7.00M	-16.35M	20.50M	83.00K	50.53M	15.66M

Durect Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRRX, the sentiment is Neutral. The current price of 0.73 is above the 20-day moving average (MA) of 0.67, below the 50-day MA of 0.75, and below the 200-day MA of 1.04, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 57.09 is Neutral, neither overbought nor oversold. The STOCH value of 68.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DRRX.

Durect Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	52 Neutral	$5.15B	3.56	-42.52%	2.83%	14.56%	-0.50%
TXMD	47 Neutral	$16.90M	―	-8.16%	―	35.25%	81.05%
DRRX	46 Neutral	$18.28M	―	-145.04%	―	-25.39%	43.88%
IXHL	39 Underperform	$3.55M	―	-240.02%	―	―	―
KALA	31 Underperform	$22.07M	―	-388.29%	―	―	38.50%

Durect Corporate Events

Durect Corporation Announces Board Member’s Retirement

On February 14, 2025, Terrence F. Blaschke retired from his role on the Board of Directors of DURECT Corporation, where he also served on the Nominating and Corporate Governance Committee. His resignation, effective immediately, was not due to any disagreements with the company’s management or board over its operations or policies.