10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-31615

DURECT CORPORATION

(Exact name of registrant as specified in its charter)

     Delaware

     94-3297098

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification No.)

10240 Bubb Road

Cupertino, California 95014

(Address of principal executive offices, including zip code)

(408) 777-1417

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class

     Trading Symbol

     Name of Each Exchange on Which Registered

     Common Stock $0.0001 par value per share
 
     DRRX

     The NASDAQ Stock Market LLC
(The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2025, there were 31,042,581 shares of the registrant’s common stock outstanding.

INDEX


		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	5

	Condensed Unaudited Balance Sheets as of March 31, 2025 and December 31, 2024	5

	Condensed Unaudited Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 2024	6

	Condensed Unaudited Statements of Stockholders’ Equity for the three months ended March 31, 2025 and 2024	7

	Condensed Unaudited Statements of Cash Flows for the three months ended March 31, 2025 and 2024	8

	Notes to Condensed Unaudited Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27

Item 4.	Controls and Procedures	27

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

Signatures		30

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this Quarterly Report on Form 10-Q or elsewhere by management from time to time, the words “believe,” “anticipate,” “intend,” “plan,” “estimate,” “expect,” “may,” “will,” “could,” “potentially,” “possibility,” and similar expressions are forward-looking statements. Such forward-looking statements contained herein are based on current expectations and beliefs. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors. Forward-looking statements made in this report include, but are not limited to, statements about:

•

potential uses and benefits of larsucosterol to treat alcohol-associated hepatitis (“AH”), metabolic dysfunction-associated steatohepatitis (“MASH”), or other conditions;

•

the potential benefits of Breakthrough Therapy Designation and Fast Track Designation;

•

the results and timing of clinical trials, including clinical trial plans and timelines for larsucosterol;

•

the likelihood of future clinical trial results of larsucosterol being positive with statistical significance and/or similar to results from previous trials, the possible commencement of future clinical trials;

•

our communications with the U.S. Food and Drug Administration (“FDA”) regarding the trial design for a Phase 3 clinical trial for larsucosterol in AH and our ability to confirm the efficacy and safety of larsucosterol in AH patients to support a New Drug Application filing with the FDA;

•

our plans and ability to obtain sufficient capital resources to initiate a Phase 3 clinical trial of larsucosterol in AH and present topline results within two years of initiation;

•

our intention to seek, and ability to enter into and maintain strategic alliances and collaborations;

•

the potential benefits and uses of our products and product candidates, including larsucosterol;

•

the potential royalty payments we may receive from Orient Pharma Co., Ltd.;

•

market opportunities for product candidates in our product development pipeline;

•

potential regulatory filings for or approval of larsucosterol;

•

the progress and results of our research and development programs and our evaluation of additional development programs;

•

requirements for us to purchase pre-clinical, clinical trial and commercial supplies of product candidates and/or products, as well as raw materials or active pharmaceutical ingredients from third parties, and the ability of third parties to provide us with our requirements for such supplies and raw materials;

•

conditions for obtaining regulatory approval of our product candidates;

•

submission and timing of applications for regulatory approval and timing of responses to our regulatory submissions;

•

the impact of FDA, European Medicines Agency and other government regulation on our business;

•

our ability to obtain, assert and protect patents and other intellectual property rights, including intellectual property licensed to our collaborators, as well as avoiding the intellectual property rights of others;

•

products and companies that will compete with our products and the product candidates we develop and/or license to third-party collaborators;

•

our employees, including the number of employees and the continued services of key management, technical and scientific personnel;

•

our future performance, including our anticipation that we will not derive meaningful revenues from our products and product candidates in development for at least the next twelve months, potential for future inventory write-offs and our expectations regarding our ability to achieve profitability;

•

sufficiency of our cash resources, anticipated capital requirements and capital expenditures, our need or desire for additional financing, including potential sales under our shelf registration statement and our ability to continue to operate as a going concern;

•

our expectations regarding research and development expenses, and selling, general and administrative expenses;

•

the composition of future revenues; and

•

accounting policies and estimates.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors. For a more detailed discussion of such forward looking statements and the potential risks and uncertainties that may impact upon their accuracy, see the “Overview” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations herein and Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 27, 2025 and any additional risk factors that may be described in the “Risk Factors” section herein or in our subsequent reports filed with the SEC. These forward-looking statements reflect our view only as of the date of this report. We undertake no obligations to update any forward-looking statements. You should also carefully consider the factors set forth in other reports or documents that we file from time to time with the Securities and Exchange Commission.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DURECT CORPORATION

CONDENSED BALANCE SHEETS

(in thousands)

(unaudited)


	March 31, 2025		December 31, 2024
A S S E T S
Current assets:
Cash and cash equivalents	$	7,963	$	11,011
Short-term investments		297		792
Accounts receivable, net		330		453
Inventories, net		85		106
Prepaid expenses and other current assets		737		813
Total current assets		9,412		13,175
Property and equipment, net		38		41
Operating lease right-of-use assets		1,912		2,135
Goodwill		2,725		2,725
Long-term restricted investments		150		150
Other long-term assets		123		123
Total assets	$	14,360	$	18,349
L I A B I L I T I E S A N D S T O C K H O L D E R S’ E Q U I T Y
Current liabilities:
Accounts payable	$	313	$	309
Accrued liabilities		4,603		4,771
Operating lease liabilities, current portion		1,090		1,082
Warrant liabilities

SEC Form 10-Q filed by DURECT Corporation