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OncoMed Pharmaceuticals Announces First Quarter 2016 Financial Results

On May 05, 2016 OncoMed Pharmaceuticals, Inc. (Nasdaq:OMED), a clinical-stage company developing novel anti-cancer stem cell (CSC) and immuno-oncology therapeutics, reported first quarter financial results (Press release, OncoMed, MAY 5, 2016, View Source [SID:1234512033]). The company also highlighted data presentations related to six oncology drug candidates, including robust preclinical anti-tumor activity data presented at the AACR (Free AACR Whitepaper) Annual Meeting for its wholly owned GITRL-Fc candidate and upcoming presentations at the ASCO (Free ASCO Whitepaper) Annual Meeting from clinical trials of vantictumab, ipafricept, demcizumab and tarextumab. As of March 31, 2016, cash, cash equivalents and short-term investments totaled $193.5 million.

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"Recent highlights include the presentation of new and compelling data at the AACR (Free AACR Whitepaper) Annual Meeting for our proprietary GITRL-Fc immuno-oncology therapeutic. We observed highly differentiated preclinical data including robust single-agent activity for GITRL-Fc compared to an alternate GITR agonist antibody strategy. We look forward to filing INDs on two distinct IO agents, GITRL-Fc and an undisclosed agent, termed ‘IO#2′, with the first of these IND filings by year-end." said Paul J. Hastings, Chairman and Chief Executive Officer. "Looking ahead, we have a steady stream of data presentations planned, starting with several at the ASCO (Free ASCO Whitepaper) Annual Meeting for ongoing clinical trials, including new data from two of our Phase 1b combination studies for Wnt inhibitors vantictumab and ipafricept, as well as updated Phase 1b survival data for demcizumab in NSCLC."

Corporate Update and Recent Highlights

Initiated a Phase 1b clinical trial of demcizumab (anti-DLL4, OMP-21M18) plus anti-PD-1 (pembrolizumab) in solid tumor patients

Presented five posters at the American Association of Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting:
Preclinical data comparing efficacy and immune system activation of OncoMed’s wholly owned GITRL-Fc to GITR agonist antibodies and evaluating GITRL-Fc alone and in combination with anti-PDL1 and anti-PD1
Predictive biomarker assays for anti-RSPO3 (OMP-131R10) in solid tumors and vantictumab (anti-Fzd7, OMP-18R5) in pancreatic cancer
Preclinical data detailing anti-DLL4’s activity in non-small cell lung cancer, including immunomodulatory mechanism

Announced acceptance of several clinical abstracts for presentation at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2016 Annual Meeting being held June 3-7, 2016 in Chicago, IL. Presentations include:
The first clinical data from Phase 1b trials of the company’s Wnt pathway inhibitors, vantictumab and ipafricept (FZD8-Fc, OMP-54F28), in combination therapy in breast cancer and ovarian cancer, respectively
Updated survival data from OncoMed’s Phase 1b clinical trials of demcizumab (OMP-21M18, anti-DLL4) in non-small cell lung cancer (NSCLC) and of tarextumab (anti-Notch2/3, OMP-59R5) in small cell lung cancer

First Quarter 2016 Financial Results
Cash, cash equivalents and short-term investments totaled $193.5 million as of March 31, 2016, compared to $157.3 million as of December 31, 2015. During the quarter, OncoMed received a $70 million payment from Celgene related to the demcizumab safety milestone achieved in the fourth quarter of 2015. This milestone was recorded as deferred revenue and will be amortized over the performance period.

Revenues for the first quarter 2016 totaled $6.4 million, as compared to $9.7 million in the first quarter of 2015. The decrease in revenue over the same period in 2015 was primarily due to achievement in 2015 of a $5.0 million milestone from GlaxoSmithKline related to brontictuzumab, partially offset by increased amortization of revenue from Celgene related to the demcizumab safety milestone.

Research and development (R&D) expenses for the first quarter 2016 were $28.4 million compared with $19.4 million for the same period in 2015. Higher R&D expenditures during the first quarter 2016 compared to the first quarter of 2015 were attributable to increased Phase 2 costs for the demcizumab and tarextumab programs as well as IND-enabling manufacturing and toxicology costs for the GITRL-Fc and IO#2 programs.

General and administrative (G&A) expenses for the quarter ended March 31, 2016 were $5.2 million, compared to $4.8 million for the same period in 2015. Increased costs during the first quarter 2016 were due to higher employee-related costs including stock-based compensation expenses.

Net loss for the first quarter 2016 was $27.2 million ($0.90 per share), compared to $14.5 million ($0.49 per share) for the same period of 2015. The change in net loss from the prior year quarter was due to an increase in operational expenses, primarily research and development costs, and lower collaboration revenues.

2016 Financial Guidance
OncoMed reiterated financial guidance for the full year 2016. Based on its current plans and expectations, OncoMed anticipates:

Cash expenses in the range of approximately $110-$120 million
2016 year-end cash balance of more than $100 million, without taking into account potential future milestones or payments from partners
Existing cash is anticipated to fund company operations through the first quarter of 2018, without taking into account potential future milestones or payments from partners

Potential milestone and opt-in payments from partners GSK, Bayer and Celgene over the course of 2016, 2017, and 2018 total over $270 million.

Neurocrine Biosciences Reports First Quarter 2016 Results

On May 5, 2016 Neurocrine Biosciences, Inc. (NASDAQ:NBIX) reported its financial results for the quarter ended March 31, 2016 (Press release, Neurocrine Biosciences, MAY 5, 2016, View Source;p=RssLanding&cat=news&id=2165670 [SID:1234512030]). For the first quarter of 2016, the Company reported a net loss of $19.3 million, or $0.22 loss per share, compared to a net loss of $1.2 million, or $0.01 loss per share, for the same period in 2015.

The Company’s balance sheet at March 31, 2016 reflected cash, cash equivalents, investments and receivables of $448.6 million compared to $464.3 million at December 31, 2015.

"2015 was a very successful year for Neurocrine and we have carried this momentum into the first quarter of 2016 beginning with positive top-line data from the second Phase III study of elagolix in endometriosis, the initiation of two Phase III studies of elagolix in uterine fibroids, the start of our Phase II T-Force GREEN study of valbenazine in children and adolescents with Tourette syndrome, as well as the acceptance of seven valbenazine abstracts at the American Academy of Neurology and American Psychiatric Association Annual Meetings" said Kevin Gorman, Ph.D., President and Chief Executive Officer of Neurocrine Biosciences. "Our focus for the coming months is to continue to execute across all aspects of our business; advancing compounds from research into the clinic, executing on clinical trials, filing the valbenazine NDA, and interacting with providers and payers as we prepare for the commercial launch of valbenazine for tardive dyskinesia upon FDA approval."

The $15.0 million of revenue for the first quarter of 2016 represents a milestone payment from AbbVie related to the commencement of Phase III studies of elagolix in uterine fibroids. The $19.8 million of revenue for the first quarter of 2015 represents recognized revenue in the form of license fees from the NBI-98854 (valbenazine) collaboration and license agreement with Mitsubishi Tanabe.

Research and development expenses increased to $23.9 million during the first quarter of 2016 from $16.6 million during the same period in 2015. This increase was primarily due to higher external clinical development expenses and associated internal costs related to the Company’s VMAT2 inhibitor, valbenazine, which is being evaluated in both tardive dyskinesia and Tourette syndrome. Additionally, expenses related to the Company’s preparation of the New Drug Application for valbenazine in tardive dyskinesia accounted for a portion of the increase in expenses quarter over quarter.

General and administrative expenses increased from $5.5 million in the first quarter of 2015 to $12.0 million for the first quarter of 2016, primarily due to pre-commercialization activities for valbenazine. Personnel related costs increased by $3.9 million quarter over quarter primarily due to the expansion of sales and marketing and medical affairs personnel. This increase in personnel related costs includes a $2.4 million increase in share-based compensation expense. Additionally, a significant increase in other pre-commercialization activities contributed to the overall growth in general and administrative expenses.

Pipeline Highlights

Valbenazine Update

During the fourth quarter of 2015, the Company announced positive efficacy results from the Kinect 3 study, a Phase III trial that included moderate to severe tardive dyskinesia in patients with underlying schizophrenia, schizoaffective disorder, bipolar or major depressive disorder who underwent six weeks of placebo controlled assessment. Subsequent to the initial six weeks of treatment, subjects were eligible to continue in the Kinect 3 study for an additional 42 week open-label safety assessment. The open-label safety evaluation is anticipated to complete dosing in mid-2016.

In addition to the ongoing safety assessment of Kinect 3, during the first quarter of 2016 the Company completed enrollment in a separate one-year open-label safety study of valbenazine, Kinect 4, to support the anticipated 2016 filing of a New Drug Application of valbenazine in tardive dyskinesia.

The Company also recently initiated a valbenazine roll-over study for those patients who complete the one year of dosing in either the Kinect 3 or Kinect 4 studies. This roll-over study is designed to permit open-label access to valbenazine for up to an additional 72 weeks of treatment.

As announced previously, Neurocrine has received Breakthrough Therapy Designation from the FDA for valbenazine in the treatment of tardive dyskinesia.

The Company is also exploring valbenazine in Tourette syndrome. The Company recently announced the initiation of two Phase II Tourette syndrome studies evaluating valbenazine in adults and pediatrics, the T-Forward study and T-Force GREEN study, respectively.

The T-Forward study is a randomized, double-blind, placebo-controlled, multi-dose, parallel group, study of up to 90 adults. Subjects will receive once-daily dosing of valbenazine during an eight-week treatment period to assess the safety, tolerability and efficacy of valbenazine in adult Tourette patients. The primary endpoint of this study is a change from baseline of placebo vs. active scores utilizing the Yale Global Tic Severity Scale at the end of Week 8.

The T-Force GREEN study is a randomized, double-blind, placebo-controlled, multi-dose, parallel group study of up to 90 children and adolescents. Subjects will receive once-daily dosing of valbenazine during a six-week treatment period to assess the safety, tolerability and efficacy of valbenazine in pediatric Tourette patients. The primary endpoint of this study is the change from baseline of the Yale Global Tic Severity Scale between placebo and active treatment groups at the end of Week 6.

Data from both of these Tourette studies is expected around year-end 2016.

The Company has submitted and had accepted seven valbenazine abstracts at two major medical conferences during the second quarter. Valbenazine data from all three Kinect clinical trials were presented at podium and plenary sessions at the American Academy of Neurology Annual Meeting in April. In addition, four valbenazine scientific abstracts were submitted and accepted for the American Psychiatric Association Annual Meeting in May.

Elagolix Update

During the first quarter of 2016, AbbVie announced positive top-line results from the second of two Phase III clinical trials, the Solstice Study, a multinational study designed to evaluate the efficacy and safety of elagolix in 815 premenopausal women with endometriosis. The top-line results from this trial were consistent with those of the initial Phase III clinical trial, the Violet Petal Study, where after six months of treatment, both doses of elagolix (150 mg once-daily and 200 mg twice-daily) met the study’s co-primary endpoints of reducing scores of non-menstrual pelvic pain and menstrual pain (or dysmenorrhea) associated with endometriosis at month three, as well as month six, as measured by the Daily Assessment of Endometriosis Pain scale. The observed safety profile of elagolix in the Solstice study was consistent with observations from prior studies. Among the most common adverse events (AEs) were hot flush, headache, and nausea. While most AEs were similar across treatment groups some, such as hot flush and bone mineral density loss, were dose-dependent. AbbVie is targeting a 2017 New Drug Application filing with the FDA for elagolix in endometriosis.

In early 2016, AbbVie announced the initiation of the Phase III uterine fibroids program consisting of two replicate randomized, parallel, double-blind, placebo-controlled clinical trials evaluating elagolix alone or in combination with add-back therapy in women with heavy uterine bleeding associated with uterine fibroids. The studies are expected to enroll approximately 400 subjects each for an initial six-month placebo-controlled dosing period. At the end of the six-months of placebo-controlled evaluation, subjects are eligible to enter an additional six-month safety extension study. The primary efficacy endpoint of the study is an assessment of the change in menstrual blood loss utilizing the alkaline hematin method comparing baseline to month six. Additional secondary efficacy endpoints will be evaluated including assessing the change in fibroid volume and hemoglobin. Bone mineral density will be assessed via DXA scan at baseline, the conclusion of dosing, and six months post-dosing.

Essential Tremor Program (NBI-640756) Update

NBI-640756 for patients with essential tremor was discovered in the Neurocrine laboratories. The Company has completed dosing in a single site, randomized, double-blind, placebo-controlled, sequential dose-escalation, pharmacokinetic study assessing the safety and tolerability of a single dose of NBI-640756 in up to 32 healthy volunteers. The study was conducted in multiple sequential cohorts of eight subjects per cohort. Data from this initial Phase I study is expected in the second quarter of 2016.

NanoString Technologies Releases Operating Results for First Quarter of 2016

On May 05, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, today reported financial results for the first quarter ended March 31, 2016 (Press release, NanoString Technologies, MAY 5, 2016, View Source [SID:1234512029]).

First Quarter Financial Highlights

Total revenue of $14.7 million, 27% year-over-year growth
Total product and service revenue of $12.1 million, 12% year-over-year growth
Consumables revenue of $8.0 million, including $0.8 million of Prosigna IVD kits, 35% year-over-year growth
Instrument revenue of $3.4 million, 22% year-over-year decline
Collaboration revenue of $2.6 million
"We continue to strengthen our leadership in precision oncology on all fronts, while our new biopharma partnerships helped deliver positive operating cash flow during the first quarter," said president and chief executive officer, Brad Gray. "We generated 27% year-on-year revenue growth despite lower than expected instrument sales, as some orders slipped into the second quarter. We have seen a strong recovery in instrument sales during April, expect instrument revenue growth to normalize over the balance of the year, and reiterate our guidance for total revenue of $86 to $90 million for fiscal year 2016."

Recent Business Highlights

Grew installed base to over 370 nCounter Analysis Systems at March 31, 2016
Introduced the nCounter Vantage portfolio of assays that power 3D Biology experiments in cancer research, including immuno-oncology
Presented first proof-of-concept data for digital immunohistochemistry (IHC), a novel technology to simultaneously count multiple protein targets in the spatial context of tumor tissue biopsies
Entered into a collaboration with HalioDx SAS to develop gene expression assays for assessing response to cancer immunotherapies using the nCounter system
Received favorable final Medicare local coverage determination for Prosigna by Noridian Healthcare Solutions and Novitas Solutions, Inc. covering 22 states
Entered into two collaborations with Merck and with Medivation and Astellas to develop and commercialize novel diagnostic tests to predict drug response
First Quarter Financial Results

Revenue for the three months ended March 31, 2016 increased by 27% to $14.7 million, as compared to $11.6 million for the first quarter of 2015. Instrument revenue was $3.4 million, down 22% versus the prior year period, resulting from seasonal trends compounded by slower than expected conversion of sales opportunities into orders, as well as a lower overall average selling price resulting from the mid-2015 launch of the nCounter SPRINT Profiler. Consumables revenue, excluding Prosigna, was $7.2 million for the first quarter of 2016, 31% higher than in the comparable 2015 quarter. Prosigna IVD kit revenue was $0.8 million for the quarter, and collaboration revenue totaled $2.6 million. Gross margin on product and service revenue was 52% for the first quarter of 2016, up from 51% for the first quarter of 2015.

Research and development expense increased by 22% to $7.2 million for the first quarter of 2016 versus $5.9 million for the first quarter of 2015, reflecting increased costs associated with collaboration activities and new products and technologies under development for the life science research market. Selling, general and administrative expense was $14.9 million for the first quarter of 2016 compared to $14.1 million for the prior year period.

Net loss for the three months ended March 31, 2016 declined to $14.6 million, or a loss of $0.74 per diluted share, compared with $14.9 million, or a loss of $0.81 per diluted share, for the first quarter of 2015.

Outlook for 2016

The company’s financial outlook for 2016 is unchanged, and includes:

Total revenue in the range of $86 million to $90 million
Gross margin on product and service revenues in the range of 54% to 55%
Operating expenses in the range of $94 million to $99 million
Operating loss in the range of $40 million to $43 million
Net loss per share in the range of $2.30 to $2.45
Cash from collaborations in 2016 in the range of $40 million to $45 million

Aviragen Therapeutics Reports Third Quarter Fiscal Year 2016 Financial Results

On May 5, 2016 Aviragen Therapeutics, Inc. (NASDAQ:AVIR) (formerly Biota Pharmaceuticals, Inc.) reported its financial results for the three month period ended March 31, 2016, which is the third quarter of the Company’s 2016 fiscal year, and also provided an update on recent corporate and clinical developments (Press release, Nabi Biopharmaceuticals, MAY 5, 2016, View Source [SID:1234512028]).

"This quarter has been very rewarding and highlights significant efforts by the entire team to position the Company for success. We officially changed the name of the Company from Biota to Aviragen to reflect our shift from a drug discovery and early-stage licensing company to one focused on developing next generation antiviral therapies. On the clinical front, we were encouraged by the emerging profile of our RSV fusion inhibitor, BTA585, that successfully completed single and multiple dose Phase 1 trials. Further validating the potential of BTA585 to address significant unmet clinical needs in children and adults infected with RSV was the FDA’s Fast Track designation. The Phase 2a RSV challenge study of BTA585 and Phase 2b HRV SPIRITUS trial of vapendavir are progressing and we look forward to reporting top-line data from both trials in the second half of this year," remarked Joseph M. Patti, PhD, President and Chief Executive Officer of Aviragen Therapeutics.

"We were also successful this quarter in significantly strengthening our balance sheet by divesting our non-core antibiotic intellectual property portfolio and, shortly after the end of the quarter, by adding $20 million of non-dilutive funds from the monetization of a portion of our Inavir royalty. Our enhanced financial position supports our continued investment in advancing our key late-stage product candidates and anti-viral pipeline."

Recent Corporate Highlights

Completed Royalty Deal with Healthcare Royalty Partners for Proceeds of $20 Million.
In April 2016, received gross proceeds of $20 million from HealthCare Royalty Partners from the sale of an undisclosed portion of the Company’s royalty rights related to Inavir, an inhaled neuraminidase inhibitor that is approved in Japan for the treatment and prevention of influenza.

Transitioned Company Name to Aviragen Therapeutics, Inc. (NASDAQ:AVIR) from Biota Pharmaceuticals, Inc. The name change reflects the strategic shift in the organization’s prior focus on drug discovery and early-stage licensing to clinical development of next generation direct-acting antivirals to treat infections that have limited therapeutic options.

Announced Sale of Antibiotic Assets to Spero Therapeutics. Completed the sale of assets related to the Company’s broad spectrum antibiotic program to a newly formed subsidiary of Spero Therapeutics, LLC, a Cambridge-based biopharmaceutical company founded to develop novel therapies for the treatment of bacterial infections.

Recent Clinical Highlights

Initiated Phase 2a Efficacy Study of BTA585 for the Treatment of Respiratory Syncytial Virus (RSV) Infections. Reported the initiation of a double-blind, placebo-controlled, Phase 2a trial that is designed to evaluate the safety, pharmacokinetics, and antiviral activity of orally-dosed BTA585 in healthy volunteers challenged intranasally with RSV. The primary endpoint of the study is reduction in viral load among subjects who test positive for RSV prior to dosing.

Reported Positive Results from Phase 1 Trial for RSV Antiviral BTA585. Reported top-line safety and pharmacokinetic data from a Phase 1 multiple ascending dose (MAD) trial of BTA585. Results from the MAD trial indicated BTA585 was generally well tolerated at all dose levels; there were no serious adverse events, and no drug-related clinically-significant adverse changes were observed in either ECGs or clinical laboratory values.

Received Fast Track Designation for RSV Antiviral BTA585. Granted Fast Track designation by the FDA for BTA585, an oral fusion inhibitor, for the treatment of RSV infections in infants, young children and adults. The FDA Fast Track process is designed to expedite the development and review of drugs for the treatment of serious or life-threatening conditions and which demonstrate potential to address unmet medical needs.

Commenced Dosing in Phase 2 Trial of BTA074 for Topical Treatment of Condyloma. Dosed first subject in a Phase 2 double-blind, randomized, placebo-controlled trial to evaluate the safety, tolerability and efficacy of BTA074 5% gel in male and female patients with condyloma, or anogenital warts, caused by human papillomavirus (HPV) types 6 & 11.

Financial Results for the Three Month Period Ended March 31, 2016

The Company reported a net loss of $5.2 million for the three month period ended March 31, 2016, as compared to net income of $1.2 million in the same quarter of the prior fiscal year. Basic and diluted net loss per share was $0.14 for the three month period ended March 31, 2016, as compared to a basic and diluted net income per share of $0.03 in the same period of 2015.

Revenue decreased to $5.3 million for the three month period ended March 31, 2016 from $5.9 million in the same period in 2015 due to a $0.2 million decrease in royalty revenues from sales of the flu products Relenza and Inavir. The lower royalties were a result of reduced Relenza government stockpiling orders, which were largely offset by higher royalties from Inavir sales in Japan. Also contributing to the lower revenues was a $0.4 million decrease in revenue from services, as a result of the termination of the Company’s contract with BARDA in 2014.

Cost of revenue decreased to zero for the three month period ended March 31, 2016 from $0.3 million in the same period last year due to the termination of the Company’s contract with BARDA in 2014.

Research and development expense increased to $8.5 million for the three month period ended March 31, 2016 from $4.8 million in the same period in 2015. The increase was the result of $4.4 million in higher clinical costs related to: the ongoing Phase 2b SPIRITUS trial for vapendavir; the introduction of BTA585 into clinical trials this year, including a Phase 1 SAD/MAD trial and startup costs for a Phase 2a challenge trial; and expenses for the initiation of a Phase 2 trial for BTA074. These costs were offset in part by a decrease of $0.7 million in depreciation and facility related expenses associated with the closure of the Company’s early-stage research facility in March 2015.

General and administrative expense decreased to $2.3 million for the three month period ended March 31, 2016 from $3.2 million in the same period in 2015, due largely to lower staff-related expenses and the absence this year of professional fees incurred during the acquisition of BTA074 in 2015.

The Company held $50.0 million in cash, cash equivalents, and short and long-term investments as of March 31, 2016. Additionally, in April, the Company received gross proceeds of $20 million from the sale of a portion of the royalties it receives from the flu medication, Inavir, increasing the Company’s available cash to approximately $70 million.

8-K – Current report

On May 5, 2016 DURECT Corporation (Nasdaq: DRRX) reported financial results for the first quarter of 2016 (Filing, Q1, DURECT, 2016, MAY 5, 2016, View Source [SID:1234512022]). Total revenues were $3.6 million and net loss was $7.9 million for the three months ended March 31, 2016 as compared to total revenues of $4.8 million and net loss of $4.9 million for the three months ended March 31, 2015.

At March 31, 2016, we had cash and investments of $24.3 million, compared to cash and investments of $29.3 million at December 31, 2015. Subsequent to the end of the first quarter, we raised net proceeds of approximately $17.0 million from the sale of additional shares of common stock. Including these proceeds, our pro forma cash and investments at March 31, 2016 would have been approximately $41.3 million. At March 31, 2016, we had $19.7 million in short and long term debt.
"The highlight of the quarter was undoubtedly the resubmission of the REMOXY NDA, followed by its acceptance for review by the FDA and the establishment of a September 25, 2016 PDUFA date," stated James E. Brown, D.V.M., President and CEO of DURECT. "With respect to DUR-928, we have progressed into our first two patient studies with results anticipated during the course of this year. For POSIMIR, we continued the PERSIST Phase 3 trial which we are in the process of amending in response to an FDA recommendation."
Update of Selected Programs:

• Epigenomic Regulator Program. DUR-928, our Epigenomic Regulator Program’s lead product candidate, is an endogenous, small molecule, new chemical entity (NCE), which may have broad applicability in several metabolic diseases such as nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH), and in acute organ injuries such as acute kidney injury.
During the first quarter, we began our first patient trial utilizing DUR-928. This study is an open-label single-ascending-dose safety and pharmacokinetic Phase 1b trial of DUR-928 in NASH patients and matched control subjects. This study will be conducted in successive cohorts evaluating single-dose levels of oral DUR-928. After a PK/safety review at each dose, the study can proceed to the next higher dose. The study is being conducted in Australia, and we anticipate that we will start obtaining results from this trial in the second quarter of 2016. This study is designed to enable and inform a subsequent multi-dose study in NASH or other patients with other liver function impairment.
In addition, our protocol has been approved by the institutional review board for a second study in patients with DUR-928, also being conducted in Australia. This Phase 1b trial of DUR-928 is an open-label single-ascending-dose safety and pharmacokinetic study in patients with impaired kidney function and matched control subjects. This study will be

1
conducted in successive cohorts evaluating single-dose levels of DUR-928 administered by injection. After a PK/safety review at each dose, the study can proceed to the next higher dose. We anticipate that this study will be completed in 2016, and that this study will enable and inform subsequent trials for patients with either acute kidney injury or other kidney function impairment.

• REMOXY (oxycodone) Extended-Release Capsules CII. Based on our ORADUR technology, REMOXY is a unique long-acting formulation of oxycodone designed to discourage common methods of tampering associated with opioid misuse and abuse. Pain Therapeutics (our licensee) resubmitted the NDA on schedule in March 2016. In April 2016, Pain Therapeutics announced that the FDA had determined that the NDA was sufficiently complete to permit a substantive review and that September 25, 2016 is the target action date under the Prescription Drug User Fee Act (PDUFA). The extended release oxycodone market is greater than $2 billion in the U.S. alone, and we are eligible for a potential royalty on REMOXY between 6.0% to 11.5% of net sales depending on sales volumes.

• POSIMIR (SABER-Bupivacaine) Post-Operative Pain Relief Depot. In November 2015, we began enrolling patients for PERSIST, a new POSIMIR Phase 3 clinical trial, consisting of patients undergoing laparoscopic cholecystectomy (gallbladder removal) surgery. In a previous clinical trial of 50 patients undergoing laparoscopic cholecystectomy, POSIMIR was compared with the active control bupivacaine hydrochloride, against which POSIMIR demonstrated in a post hoc analysis an approximately 25% reduction in pain intensity on movement for the first 3 days after surgery (p=0.024), using the same statistical methodology specified for the current trial. We began recruiting patients for this trial with an intent to compare POSIMIR to placebo. Based on recommendations from the FDA received subsequent to the start of the trial, in April 2016 we decided to amend the PERSIST trial including by incorporating standard bupivacaine HCl as an active control. This change will add to the time and cost to complete the PERSIST trial, but we believe that a positive outcome from this trial design would result in a stronger NDA filing and potentially commercial advantages. This clinical trial is designed to generate data necessary to support an NDA resubmission.
POSIMIR is our investigational post-operative pain relief depot that utilizes our patented SABER technology and is intended to deliver bupivacaine to provide 3 days of pain relief after surgery. We are in discussions with potential partners regarding licensing development and commercialization rights to POSIMIR, for which we hold worldwide rights. We are also continuing to evaluate the requirements for commercializing POSIMIR on our own in the U.S., in the event that we determine that to be the preferred route of commercialization.

• Relday (Risperidone Program). Relday is a proprietary, long-acting, once-monthly subcutaneous injectable formulation of risperidone for the treatment of schizophrenia. In September 2015, Zogenix (our licensee) announced that they had completed a multi-dose Phase 1b trial with results consistent with the profile of risperidone and a previous Phase 1 single-dose clinical trial. Zogenix has stated that it is seeking a development and commercialization partner for Relday and that Relday is well-positioned to begin a Phase 3 program once a partner is secured.

•
ORADUR-ADHD Program. In 2013, we selected a formulation for the lead program in our ORADUR-ADHD (Attention Deficit Hyperactivity Disorder) program, ORADUR-Methylphenidate. This formulation was chosen based on its potential for rapid onset of
action, long duration with once-a-day dosing and target pharmacokinetic profile as demonstrated in a Phase 1 trial. In addition, this product candidate utilizes a small capsule size relative to the leading existing long acting products on the market and incorporates our ORADUR anti-tampering technology. Orient Pharma, our licensee in defined Asian and South Pacific countries, has initiated a Phase 3 study in Taiwan and anticipates completing it in 2016. We retain rights to all other markets in the world, notably including the U.S., Europe and Japan, and are engaged in licensing discussions with other companies.

• Business Development Activities. We have multiple programs that may potentially be licensed over the next 12-18 months. These include POSIMIR, DUR-928, ORADUR-ADHD (territories outside certain Asian and South Pacific markets), as well as various other programs which we have not described publicly in detail.
Earnings Conference Call
A live audio webcast of a conference call to discuss first quarter 2016 results will be broadcast live over the internet at 4:30 p.m. Eastern Time on May 5 and is available by accessing DURECT’s homepage at www.durect.com and clicking "Investor Relations." If you are unable to participate during the live webcast, the call will be archived on DURECT’s website under Audio Archive in the "Investor Relations" section.