Durect Posts Narrower Loss in Fiscal Q2

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Durect (NASDAQ:DRRX), a biopharmaceutical company focused on liver disease therapeutics, released results for the second quarter of fiscal 2025 on August 12, 2025. Durect posted better-than-expected earnings per share (GAAP) of $(0.07), surpassing analyst forecasts of $(0.13) (GAAP), and revenue (GAAP) of $0.45 million, above the $0.32 million consensus (GAAP). Both figures (GAAP EPS of -0.07 and GAAP revenue of $447,000) beat expectations, but revenue (GAAP) declined compared to the same period in 2024. The company’s cash position fell sharply, and its outlook now centers around a planned acquisition by Bausch Health. Overall, the period highlighted ongoing financial risk, operational cuts, and strategic uncertainty as Durect prepares to complete its merger.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Key Focus Areas

Durect is a clinical-stage biopharmaceutical company that concentrates on therapies for liver diseases. Its main asset is larsucosterol, a drug candidate targeting alcohol-associated hepatitis (AH), a life-threatening liver condition for which there are currently no approved treatments. Durect also has legacy commercial products, but these make up a very small part of its business.

The company has focused on moving larsucosterol through clinical trials and regulatory processes. Success in gaining regulatory approval for this drug is the most important factor for its future. Partnerships, regulatory progress, and maintaining strong patent protection are also key. Other revenue-generating products, like POSIMIR (a post-surgical pain therapy) and PERSERIS (for schizophrenia, previously licensed to Indivior), have dwindled in commercial impact, putting more pressure on larsucosterol's success.

Quarter in Review: Financial and Strategic Developments

Earnings per share (GAAP) were $(0.07) on revenue of $0.45 million. This result (GAAP) was better than analysts expected but showed a decline in revenue (GAAP) compared to the same period in 2024 and continued dependence on partnership or milestone revenue. Net loss (GAAP) improved compared to Q2 2024. R&D spend (GAAP) dropped 48%, from $2.25 million in Q2 2024 to $1.18 million. SG&A declined 20%, from $2.57 million in Q2 2024 to $2.07 million.

On the product side, larsucosterol remains the centerpiece of the company’s pipeline. Larsucosterol is a small-molecule therapeutic intended to treat patients with alcohol-associated hepatitis, a liver disease with high mortality and limited options. Durect previously secured Breakthrough Therapy and Fast Track designations from the U.S. Food and Drug Administration (FDA), reflecting strong early trial results, including a 41% reduction in mortality at 90 days in certain trial arms. However, in the latest quarter, Durect reported no new clinical data.

The company’s financial performance also reflected a fall in revenue from legacy products compared to Q2 2024. Product revenue (GAAP) was only $19,000, down 53% from Q2 2024. Nearly all revenue now comes from collaborative research and development agreements, which totaled $428,000 (GAAP), a decline of 29% from Q2 2024. This data highlights the company's dependence on pipeline progress, not on existing sales, and reinforces the importance of the Bausch Health deal.

There were no major new one-time items or notable partnership announcements except for ongoing merger progress. The release emphasized the terms of the pending Bausch Health acquisition: $1.75 per share in cash, plus up to $350 million in future sales milestones. The transaction is expected to close in the third quarter of 2025.

Looking Ahead: Outlook and Investor Watch Points

Management supplied no forward guidance for future quarters or for fiscal 2025. No estimates were provided for future cash usage, R&D, or clinical timelines.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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