Durect (DRRX) AI Stock Analysis

• Market Cap: $19.87M
• Dividend Yield: N/A
• Average Volume (3M): 75.64K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.33
• Revenue Growth: -41.45%
• EPS Growth: 40.69%
• Country: US
• Employees: 21
• Sector: Healthcare
• Sector Strength: 47
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -0.13
• Shares Outstanding: 31,042,582
• 10 Day Avg. Volume: 46,858
• 30 Day Avg. Volume: 75,638
• PEG Ratio: 0.29
• Price to Book (P/B): 3.15
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.99
• Enterprise Value/Market Cap: 2.95
• Enterprise Value/Revenue: 3.00
• Enterprise Value/Gross Profit: 79.60
• Enterprise Value/Ebitda: -0.93
• 1Y Price Target: $5.00
• Price Target Upside: 646.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: $0.50 ▼(-25.37%Downside)

The overall score is primarily driven by Durect's poor financial performance and unfavorable valuation metrics. While technical analysis provides some neutral signals, it does not offset the financial and valuation concerns. Without earnings call or corporate events data, the focus remains on the financial and technical aspects.

Positive Factors

Clinical Data

90-day mortality reductions were statistically significant in U.S. patients treated with larsucosterol at either dose in the Phase 2b AHFIRM trial.

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

There remains significant uncertainty regarding the available options to finance the Phase 3 study.

Financial Stability

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

Funding

Funding remains a key missing piece for the registrational Phase 3 trial of larsucosterol in patients with severe alcohol-associated hepatitis.

Durect Business Overview & Revenue Model

Company Description

DURECT Corporation, a biopharmaceutical company, researches and develops medicines based on its epigenetic regulator and pharmaceutical programs. The company offers ALZET product line that consists of osmotic pumps and accessories used for research in mice, rats, and other laboratory animals. It also develops larsucosterol (DUR-928), an endogenous, orally bioavailable small molecule that is in Phase IIb clinical trial to play a regulatory role in lipid metabolism, stress and inflammatory responses, and cell death and survival to treat alcohol-associated hepatitis, as well as completed Phase Ib clinical trial to treat patients with nonalcoholic steatohepatitis. In addition, the company offers POSIMIR, a post-surgical pain product to deliver bupivacaine up to days of in adults; and Methydur to treat attention deficit hyperactivity disorder. It markets and sells its ALZET lines through direct sales force in the United States, as well as through a network of distributors in Japan, Europe, and internationally. The company has strategic collaboration and other agreements with Virginia Commonwealth University Intellectual Property Foundation; Indivior UK Ltd.; and Santen Pharmaceutical Co., Ltd. DURECT Corporation was incorporated in 1998 and is headquartered in Cupertino, California.

How the Company Makes Money

Durect Corporation generates revenue primarily through the sale of its proprietary drug delivery systems and technologies, including the ALZET Osmotic Pumps and LACTEL Absorbable Polymers, which are used in both research and clinical settings. Additionally, the company earns income through licensing agreements and collaborations with other pharmaceutical companies, wherein Durect provides access to its drug delivery technologies or co-develops drug candidates. These partnerships often involve upfront payments, milestone payments, and potential royalties on sales of successful products. Durect's revenue is also supplemented by government grants and research funding for specific projects. The company’s ability to monetize its investigational drug pipeline, either through commercialization or strategic partnerships, is a significant factor contributing to its earnings.

Durect Financial Statement Overview

Summary

Durect is facing significant financial challenges, with declining revenues, persistent losses, and negative cash flows. The balance sheet reflects high leverage and reduced equity. 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	525.00K	2.03M	8.55M	19.28M	13.98M	30.11M
Gross Profit	736.00K	1.95M	6.83M	17.70M	12.02M	28.70M
EBITDA	-15.83M	-18.83M	-24.68M	-32.78M	-33.98M	-11.80M
Net Income	-4.91M	-8.32M	-27.62M	-35.58M	-38.13M	-2.52M
Balance Sheet
Total Assets	14.36M	18.35M	45.19M	60.10M	91.99M	75.64M
Cash, Cash Equivalents and Short-Term Investments	8.26M	11.80M	29.68M	43.48M	69.81M	40.73M
Total Debt	1.98M	2.21M	20.75M	23.26M	24.30M	25.82M
Total Liabilities	8.57M	9.22M	30.41M	35.12M	34.21M	35.53M
Stockholders Equity	5.79M	9.52M	14.78M	24.98M	57.78M	40.12M
Cash Flow
Free Cash Flow	-15.87M	-19.09M	-34.47M	-26.39M	-37.51M	-38.91M
Operating Cash Flow	-15.86M	-19.09M	-34.41M	-26.28M	-37.31M	-38.70M
Investing Cash Flow	19.43M	18.04M	-1.17M	19.84M	15.31M	9.43M
Financing Cash Flow	-14.85M	-16.35M	20.50M	83.00K	50.53M	15.66M

Durect Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.67
• 50DMA: Positive
• 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 Positive. The current price of 0.67 is above the 20-day moving average (MA) of 0.62, above the 50-day MA of 0.61, and below the 200-day MA of 0.89, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 58.85 is Neutral, neither overbought nor oversold. The STOCH value of 44.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRRX.

Durect Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	HK$15.27B	5.80	-7.43%	4.22%	11.60%	-21.06%
TXMD	47 Neutral	$13.08M	―	-7.72%	―	35.25%	81.05%
DRRX	45 Neutral	$19.87M	―	-203.11%	―	-41.45%	40.69%
SISI		$4.89M	―	-58.27%	―	―	―
KALA	31 Underperform	$31.23M	―	-576.46%	―	―	38.50%
SXTC		$222.77M	0.08	57.63%	―	―	―
IXHL	39 Underperform	$19.57M	―	-201.88%	―	―	―

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.