By The Life Science Report
Source: The Life Sciences Report 05/10/2017
DURECT Corp. and Sandoz AG, a division of Novartis, have signed a development and commercialization agreement for the U.S. for POSIMIR.
POSIMIR is DURECT Corp.’s (DRRX:NASDAQ) “locally acting, non-opioid analgesic intended to provide up to three days of continuous pain relief after surgery.” DURECT announced that, under the terms of the agreement, “Sandoz will make an upfront payment to DURECT of $20 million, with the potential for up to an additional $43 million in development and regulatory milestones, up to an additional $230 million in sales based milestones, as well as a tiered double digit royalty on product sales in the United States.”
DURECT will remain responsible for conducting the PERSIST Phase 3 trial, comparing POSIMIR to bupivacaine HC1 after laparoscopic gall bladder removal. The company anticipates completing the dosing patients in Q3/17 and expects to have top-line data shortly thereafter. POSIMIR has not been approved for commercialization by the FDA.
The Sandoz deal was lauded by a pair of analysts. Francois Brisebois, a healthcare research analyst with Laidlaw & Company, noted that “we see the deal as relatively heavily front loaded and are encouraged by this large pharma validation. Sandoz’s market presence and resources could truly benefit DRRX and help them take market share from PCRX’s [Pacira Pharmaceuticals Inc.] comparable Exparel. We believe DRRX’s favorable terms might have come as a result of PCRX’s strong FY2017 guidance ($290M–$310M) and see this partnership as an interesting non-dilutive funding event.”
“As DRRX has made clear in the past that they were in negotiations with a number of potential partners, we see Sandoz’s impressive expertise and strong hospital presence as a real positive for DRRX,” summed up Brisebois.
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Laidlaw & Company has a Buy rating and $3 price target on DURECT. The stock is currently trading around $1.00.
Grant Zeng, an analyst with Zacks Small Cap Research, stated that “we think this is a great deal for Durect. Sandoz has a very strong sales/marketing team and has a great presence in the U.S. Sandoz has a differentiated product portfolio including a range of state-of-the-art technologies, formulations and devices.” Zheng noted that “the deal not only boosts Durect’s balance sheet, but also validates the company’s technology and clinical program.”
“The market for a non-opioid post-surgical pain product is quite large. One piece of evidence for this is Pacira and their product Exparel. Pacira has a $1.9 billion market cap on the basis of Exparel, which is projected to have about $300 million in revenue in 2017. If approved, POSIMIR will compete quite effectively in this marketplace,” concluded Zeng.
As of May 3, Zacks Small Cap Research had a fair market value of $6/share for DURECT.
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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own shares of the following companies mentioned in this article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) DURECT Corp.is a billboard sponsor of Streetwise Reports. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
DURECT will remain responsible for conducting the PERSIST Phase 3 trial, comparing POSIMIR to bupivacaine HC1 after laparoscopic gall bladder removal. The company anticipates completing the dosing patients in Q3/17 and expects to have top-line data shortly thereafter. POSIMIR has not been approved for commercialization by the FDA.
The Sandoz deal was lauded by a pair of analysts. Francois Brisebois, a healthcare research analyst with Laidlaw & Company, noted that we see the deal as relatively heavily front loaded and are encouraged by this large pharma validation. Sandoz's market presence and resources could truly benefit DRRX and help them take market share from PCRX's [Pacira Pharmaceuticals Inc.] comparable Exparel. We believe DRRX's favorable terms might have come as a result of PCRX's strong FY2017 guidance ($290M–$310M) and see this partnership as an interesting non-dilutive funding event.
As DRRX has made clear in the past that they were in negotiations with a number of potential partners, we see Sandoz's impressive expertise and strong hospital presence as a real positive for DRRX, summed up Brisebois.
Laidlaw & Company has a Buy rating and $3 price target on DURECT. The stock is currently trading around $1.00.
Grant Zeng, an analyst with Zacks Small Cap Research, stated that we think this is a great deal for Durect. Sandoz has a very strong sales/marketing team and has a great presence in the U.S. Sandoz has a differentiated product portfolio including a range of state-of-the-art technologies, formulations and devices. Zheng noted that the deal not only boosts Durect's balance sheet, but also validates the company’s technology and clinical program.
The market for a non-opioid post-surgical pain product is quite large. One piece of evidence for this is Pacira and their product Exparel. Pacira has a $1.9 billion market cap on the basis of Exparel, which is projected to have about $300 million in revenue in 2017. If approved, POSIMIR will compete quite effectively in this marketplace, concluded Zeng.
As of May 3, Zacks Small Cap Research had a fair market value of $6/share for DURECT.
Read what other experts are saying about:
DURECT Corp.
Want to read more Life Sciences Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
Disclosure: 1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own shares of the following companies mentioned in this article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) DURECT Corp.is a billboard sponsor of Streetwise Reports. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article."}