DURECT Corporation (DRRX) Shares Collapse – Here’s Why

Friday turned out to be a nightmare for DURECT Corporation (NASDAQ:DRRX) investors, after the drug maker announced that its pain relief candidate Posimir failed to meet its primary efficacy endpoint in the pivotal Phase 3 PERSIST study. Specifically, Posimir did not achieve better pain reduction than standard bupivacaine at 48 hours post-surgery, a primary endpoint requested by the FDA.

Corporate Presentation October 2017

DURECT shares reacted to the news, crashing nearly 60% to $0.83 in Friday’s trading session. DRRX has a 1-year high of $2.17 and a 1-year low of $0.74. The stock’s 50-day moving average is $1.78 and its 200-day moving average is $1.46.

“We are very surprised and disappointed by these results, which we will be trying to understand more fully over the coming weeks,” said James E. Brown, President and CEO of DURECT Corporation.  “We appreciate the efforts of the investigators and patients who participated in PERSIST, and we thank Sandoz for their support.”

Analyst Ratings

On the ratings front, DURECT stock has been the subject of a number of recent research reports. In a report released today, H.C. Wainwright analyst Ed Arce downgraded DRRX to Hold. Similarly, Stifel Nicolaus’ Adam Walsh also downgraded the stock to Hold.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ed Arce and Adam Walsh have a yearly average return of 24.6% and 13.2% respectively. Arce has a success rate of 45% and is ranked #226 out of 4698 analysts, while Walsh has a success rate of 51% and is ranked #764.

DURECT operates as a biopharmaceutical company. It engages in the development of therapeutics based on its proprietary drug delivery technology platforms. Its brands include ALZET, a osmotic pumps, which is used in laboratory research; and LACTEL, a biodegradable polymers, which is used by pharmaceutical and medical device clients for use as raw materials in their products. 

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