Analysts Reiterate Positive Stance on DURECT Corporation (DRRX) Ahead of FDA Decision

Healthcare analysts weighed in on shares of DURECT Corporation (NASDAQ:DRRX) after the biotech reported its 2016 first quarter financial results last week. At this point, all eyes are focusing on the outcome of the company’s PDUFA date for its chronic pain drug REMOXY on September 25, 2016.

Zacks analyst Grant Zeng reiterated a Buy rating on the stock, with a price target of $6, which implies an upside of 392% from current levels.

Zeng wrote, “We expect REMOXY to be approved in 2H16 with a high probability. Chronic pain affects as many as 100 million Americans annually. When chronic pain is severe enough, patients are frequently prescribed long-acting opioid analgesics. Opioids (also called narcotics) include oxycodone, hydrocodone, hydromorphone, oxymorphone, morphine, fentanyl, methadone, and other members of this class.”

“While opioids are effective at treating pain, they are also widely misused and abused. The FDA has recently described this situation as the opioid abuse epidemic, and called for a far-reaching action plan to reassess the agency’s approach to opioid medications. One element of this action plan includes expanding access to, and encouraging the development of, abuse-deterrent formulations of opioid products.”

In addition, Rodman & Renshaw analyst Ram Selvaraju reiterated a Buy rating on DRRX, with a price target of $4. The analyst described the company as a “rising star targeting acute and chronic conditions.”

Selvaraju noted, “If commercialized, DURECT is entitled to receive royalties for REMOXY® ranging from 6.0% to 11.5% of net sales. POSIMIR™, a locally-acting controlled-release formulation of bupivacaine, is currently undergoing a Phase 3 study in patients undergoing laparoscopic cholecystectomy. We expect this trial to be completed in 2017, with potential regulatory approval in 2018. In our view, these two pain management drugs could drive revenue growth for DURECT in the near- to mid-term on top of the company’s current commercial ALZET® and LACTEL® product lines, used in animal research and as raw materials, respectively.”

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