On August 1st, biotech firm DURECT Corporation (NASDAQ:DRRX) released its second quarter financial results for this year. In reaction, Rodman & Renshaw analyst Raghuram Selvaraju reiterates a Buy rating and suggests a price target of $4.00, marking a 117% increase from where shares last closed.
DURECT has two trials in the works for lead epigenomic regulator candidate DUR-928, evaluating safety, pharmacokinetic to test the way the pipeline drug will affect the body in various ways, with specific attention paid to impaired kidney function. For now, these trials are expected to be completed sometime during the span of 2016.
Also later this year, the analyst points to a likely filing for Investigational New Drug Applications. Selvaraju notes, “We continue to expect positive readouts from DUR-928 trials considering the drug’s multiple levels of mechanism of action.” Meanwhile, Remoxy, DURECT’s unique long-acting formulation of oxycodone to help treat patients with chronic pain without narcotic abuse, is gearing for a PDUFA due date less than two months away. Just a month ago, the FDA determined an Ad-Com meeting would not be necessary, which Selvaraju has every reason to believe is a positive sign in Remoxy’s favor, for both efficacy and safety profile, a road to securing official approval.
Selvaraju explains that Remoxy has major commercial and clinical potential to outclass OxyContin, which causes abuse and addiction in users, as pain fails to be controlled for the promised 12 hours. The analyst highlights, “With these issues, OxyContin still manages to generate annual revenues over $2B. We believe REMOXY® is specifically designed to address these issues and should seize a significant market share, potentially generating peak sales of over $300M a year.” Paired with pivotal data for post-op pain pipeline drug POSIMIR expected in 2017, Selvaraju is bullish for DURECT’s prospective future.
This quarter, DURECT came in with $3.2 million in revenue, just under Selvaraju’s projection of $3.4 million. By the end of second-quarter, the biopharmaceutical company saw a net loss of $9 million, losing on average $0.07 per share, and refinanced an existing $20 million term loan. Presently, DURECT’s cash flow and investments value $33.9 million.
According to TipRanks, one-star rated analyst Raghuram Selvaraju is ranked #3,376 out of 4,071 analysts. Selvarauju has a 43% success rate to date, and on average, a yearly loss of 1.5% in his returns. The analyst on average earns 44.5% when recommending DRRX.
TipRanks analytics exhibit DURECT is a Strong Buy. Of 3 analysts polled in the last 3 months about DRRX stock, 100% rate a Buy. The stock’s consensus target price stands at $4.67, marking a significant nearly 154% upside from where the stock is currently trading.
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