DURECT Corp (DRRX) 2009 Q2 法說會逐字稿

Welcome to the DURECT's second quarter earnings call.

Good afternoon, and welcome to our second quarter's earnings call..

This is Matt Hogan, CFO of DURECT Corporation.

The call will begin with a brief review of our financial results and then Jim Brown, our President and CEO will provide an update on our business.

We will then open up the call for a Q&A session.

Before beginning, I would like to remind you of our Safe Harbor Statement.

During the course of this call, we may make forward-looking statements regarding DURECT's products and developments, expected product benefits, our development plans, future clinical trials or projected financial results.

These forward-looking statements involve risks and uncertainties that can cause actual results to differ materially than those in such forward-looking statements.

Further information regarding these and other risks are included in our SEC filings, including our 10-K under the heading Risk Factors.

Let me now turn to our financials.

Total revenue was $4.9 million in the second quarter of 2009 which compares to $6.3 million in the second quarter of 2008.

Revenue from our R&D collaborations was $2.6 million in the second quarter this year as compared to $3.9 million in the second quarter of last year.

Revenue from this source will always fluctuate from quarter-to-quarter depending on the state of development under the various programs and our role in those programs.

Product revenue from the sale of ALZET pumps and LACTEL polymers decreased by approximately $165,000 or 7% from $2.4 million in Q2 2008 to $2.3 million in Q2 2009.

On the other hand, our gross margin on these products was around 63% in the second quarter this year and around 60% in the second quarter last year.

R&D expense was $7.9 million in the second quarter this year as compared to $9.9 million in Q2 2008.

These figures included stock based compensation of $1.3 million in the second quarter 2009 and $1.4 million in the second quarter 2008.

So if we exclude the stock based compensation, R&D expense declined about about $2.2 million.

SG&A expenses were $3.8 million in the second quarter of 2009 as compared to $4.1 million in Q2 2008.

These figures included $864,000 of stock based compensation in the second quarter this year and $674,000 in stock based compensation in the second quarter last year.

Excluding the stock based compensation, SG&A expense declined by about $499,000.

Our net loss for the second quarter of 2009 was $7.5 million compared to a net loss of $8.6 million for the same period in 2008.

Probably a more relevant financial metric for us than our net loss was net cash consumed during the quarter.

That figure was $5.1 million as compared to $5.7 million in Q1 of this year.

Our cash burn rate has been favorably impacted by the headcount reductions we undertook in March, and our first half burn rate is clearly well below the bottom end of the burn rate guidance we gave at the beginning of the year.

At June 30, 2009, we had cash and investments of $41.9 million compared with cash and investments of $52.7 million at December 31.

These figures included $800,000 in restricted investments at June 30, 2009 and $1 million in restricted investments at December 31, 2008.

Thanks again for joining the call, and I'll now turn it over to Jim to discuss nonfinancial matters in more detail.

Thank you, Matt, and hello, everyone.

Our second quarter was highlighted by the following: The hiring of Joseph Stauffer as our Chief Medical Officer, the signing of four new feasibility projects, active licensing discussions with respect to multiple programs and right after the end of the quarter, King Pharmaceuticals meeting with the FDA on REMOXY.

I will now provide a brief update on our lead programs and other items.

I'll start with REMOXY.

REMOXY is based on our order gel cap technology which provides a twice daily form of oxycodone in a more difficult to misuse and abuse formulation.

As you know, REMOXY received a complete response letter from the FDA.

King subsequently took over control of the NDA from pain therapeutics and held a meeting with the FDA on July 2 of this year.

The outcome of that meeting is that King feels it has a clear path forward to resubmit the REMOXY NDA and to address all the FDA's comments in the complete response letter.

King has stated that they anticipate the resubmission of the NDA could occur midyear of 2010.

As a reminder, oxycodone is widely used by patients suffering from chronic pain.

In fact, sales of OxyContin and oxycodone oral products were over $2 billion in 2008 with further expected growth in 2009.

There is a huge abuse problem in this country and therefore, we believe that there's a major market opportunity for King Pharmaceuticals.

We will receive royalties that start at 6% and scale up to 11.5%, plus a manufacturing markup on selected key excipients that we will supply.

To put this in perspective, if REMOXY does $400 million in revenue, we would be making about $30 million a year and if they did $600 million, we would be making about $45 million in royalties alone.

That would represent only about 25% of the current OxyContin market.

I'll now give an update with regard to POSIDUR.

POSIDUR is an injectable product designed to control post surgical pain for up to through days with Bupivacaine, a well established local anesthetic.

In our Phase IIb hernia trial, POSIDUR demonstrated at 30% improvement in pain control versus placebo over the first two and three days after surgery.

In addition, the POSIDUR group took three times less narcotics than the placebo group.

These are compelling results that hold the potential to change the treatment of pain after surgery.

We have made significant progress with this program during this past quarter.

We now have a path forward to an NDA that we anticipate will include one additional Phase III pivotal efficacy study besides the successfully completed hernia trial.

As well, we will continue with demonstration of safety and efficacy of this product in several smaller supportive studies.

To review the major ongoing activities for POSIDUR in the second quarter, we were now over halfway enrolled in our approximate 60 patient Phase IIB clinical trial in shoulder study and expect to have the study completed this year.

Nycomed is enrolling in a Phase IIB study in hysterectomy patients and a Phase IIB shoulder surgery patients in Europe.

Lastly, we are in discussions with various parties about licensing the US, Canadian and Asian development and commercialization rights to POSIDUR.

As a reminder, Nycomed became our partner for this program in the fourth quarter of 2006.

Nycomed paid us $14 million up front and an additional $8 million at our first milestone payment and we as well have an additional potential of $180 million in milestones to come.

Nycomed pays one half of development costs of this program in Europe and the United States.

And Nycomed will continue -- excuse me -- will be commercializing the product in Europe and other defined territories and when they get to that point, they will be paying us royalties that range between 15% and 40%.

Now I'd like to update with regard to ELADUR.

ELADUR is a transdermal patch containing bupivacaine which is designed to provide up to three days of pain relief versus the existing market leading patch which is indicated for 12 hours of wear.

ELADUR is very thin and has an elegant design for superior wearability.

Our patch can even be worn in the shower and during exercise.

Last October, we were pleased to close on our collaboration with Alpharma.

Deal terms were that Alpharma paid direct an up front licensing fee of $20 million.

There are potential additional milestone payments of up to $93 million upon the achievement of development and regulatory milestones which are spread over multiple clinical indications in geographic territories as well as a possible additional milestone payments of $150 million on sales base milestones.

If ELADUR is commercialized, direct will also receive royalty on product sales.

In December, King acquired Alpharma.

So now the rights and obligations for our agreement carry over to King Pharmaceuticals and they will control and fund the development program going forward.

During the second quarter, we continued to interact with King and their team on details for the next steps of this clinical program, which King expects to initiate this year.

The last program I will update on is our -- the development program is our TRANSDUR-Sufentanil program.

Our Sufentanil patch targets the large market of chronic pain users.

J&J Sufentanil patch Duragesic had revenues of approximately $1 billion in 2008 and there were about 7.5 million prescriptions for Fentanyl patches in the United States in 2008 which represents continued growth over those in 2007.

That figure underestimates the opportunity as there were about 23.5 million prescriptions written in the United States for extended release opioids in 2008, and many of those patients could benefit from a superior patch.

To briefly describe some of our product advantages, our patch seeks to provide seven days of pain relief versus existing fentanyl patches that deliver medication for two to three days and versus twice daily oral opioids.

Our seven day duration patch should provide a more constant blood level of drug and therefore, uninterrupted delivery of pain relief.

From the standpoint of worrying about diversion of drug during a 28 day period, there will only be four patches of ours to monitor versus nine to 14 fentanyl patches or 56 OxyContin pills.

And relative to the fentanyl patches, we should have a lower manufacturing cost over a monthly treatment cycle.

The existing fentanyl patches like duragesic are about the size of a dollar bill folded in half which means that during a month, a patient has to find 10 to 15 rather large spots on the body to rotate these patches around.

In contrast, our largest size patch -- or, our patch is roughly about one-fifth the size of the duragesic and our largest system about the size of a postage stamp.

During a month, only four such small sites would be required.

Between the longer duration of action and the smaller size, our Sufentanil patch is clearly a more patient friendly patch.

We believe that the smaller size and formulation which drives fewer chemicals across the skin offers the potential for improved safety and tolerability.

Lastly, there may be inherent advantages to utilizing Sufentanil as the active agent.

It is a more potential agent than fentanyl and yet, there have been a number of papers written that suggest it has a wider therapeutic index than fentanyl.

There have been 10 clinical studies involving over 300 patients that have been performed with the Sufentanil patch and an end of Phase II meeting was held with the FDA, and the results are now there is a known Phase III path to the NDA, and we are in active discussions with multiple companies with respect to licensing this Phase III ready program.

I'll give a brief update with regard to our feasibility studies.

Our existing pipeline of products consists of our working with active pharmaceutical ingredients that on off patent.

In this case, we do the formulation work on our own and drive a program into clinical study before we partner.

But there is also significant opportunity in applying our drug delivery technologies, particularly our injectable technologies, to improve products that are still on patent and thus controlled by the originator of the drug.

This is especially the case with proteins and peptides, the biotech products.

A few quarters ago, we started to put more emphasis on seeking out these opportunities and thus -- and these are starting to gain traction for us.

In the second quarter, we signed four new feasibility projects with our pharmaceutical and biotechnology partners whereby we are applying our SABER and DURIN technologies to both small molecules and biological agents at the interest of our partners.

We undertake these feasibility projects as a means of demonstrating that our technologies can achieve the drug delivery objectives set forth by collaborators and are worthy of further development.

These feasibility projects entail anticipated revenue to DURECT of approximately $1.4 million during 2009.

We are in active discussions with a number of other companies about additional feasibility projects.

For my last topic today, I want to introduce Joe Stauffer.

Joe is the most recent addition to our senior team here at DURECT, and I'd like to briefly describe his background.

Over the years, I've had the pleasure of serving with Joe on a number of pain panels.

We had the opportunity to work closely together during the second half of last year when he was the Chief Medical Officer at Alpharma during the course of our licensing ELADUR.

His responsibilities at Alpharma during his five year tenure included oversight of all clinical pharmacology, clinical development, pharmaco vigilance, medical affairs, risk management and health outcome/pharmaco economics.

After King bought Alpharma, Joe left the company, but we stayed close and in touch and we are delighted to have him join us.

Prior to joining Alpharma, Dr.

Stauffer was employed at Abbott Laboratories as a global medical director for pain therapeutics.

In that role, he was responsible for Vicodin, Vicoprofen and Dilotin as well as novel compounds targeting neuropathic pain.

Prior to Abbott, he worked at the FDA as a medical reviewing officer in the analgesic division for the Center of Drug Evaluation and Research.

While there, he reviewed INDs and NDAs for opiate, non-opiate, anti-inflammatory and novel pain compounds.

Joe is a veteran of the US Navy receiving an honorable discharge as Lieutenant Commander after eight years while serving as a general practitioner.

Dr.

Stauffer is a founding member of the Institute on Methods, Measurement and Pain Assessment of Clinical Trials or IMMPACT.

This ongoing collaboration between pharma, the FDA, the NIH academia and patient advocacy groups helps to develop core domains and outcomes for chronic pain clinical trials.

Dr.

Stauffer graduated from the Philadelphia College of Osteopathic Medicine and completed his residency and training in anesthesiology at Johns Hopkins University Hospital where he is currently an adjunct associate professor in the department of anesthesiology and critical care medicine.

He will complete his MBA this September at New York University also from the London School of Economics and HEC in Paris.

As you can see, Joe has a unique background in developing pain products and relationships built up over time in this field that we think will really benefit us.

For those investors who have had the opportunity to meet with Joe in his course of his days at Alpharma, you will recognize that he brings a high energy level and sense of urgency to his programs.

While it is still early days here for Joe at DURECT, I've asked him to make a few brief remarks and share his perspective on DURECT.

Joe?

Thank you, Jim.

Hello, everybody.

I thought I would make a few comments, especially since I've only been at the company for a relatively short time.

So, why did I join DURECT?

As Jim mentioned, I had met the company last fall in the course of reviewing ELADUR and I really came to like both that product opportunity as well as the team.

It's kind of like that old shaving commercial with the guy who said I like the product so much, I bought the company.

Now in my case, I simply joined the company.

And there aren't that many companies that match up so completely with my background and interest in the pain field.

As I reviewed the DURECT pipeline, I got even more excited about the opportunity.

So my brief perspective on the lead programs, first REMOXY.

It isn't really appropriate for me to comment in any details on REMOXY since it's a partner program and I don't have the full history.

But I would say that I'm a big believer in the future of tamper resistant products.

I think the FDA is favorably disposed towards these products in general and see no reason why prescribers won't widely adopt them once available.

Sufentanil patch, this is a very attractive opportunity.

The Phase II data is strong and the path forward as discussed with FDA is a straightforward chronic pain path.

I think this is a very attractive asset, our partner just has to commit to the clinical program as already discussed with the FDA.

POSIDUR, this is also a very exciting program.

Post surgical pain management is a real issue, and anything that might reduce the use of opioids should be very beneficial.

I like the fact that surgeons don't really have to change how they practice medicine with POSIDUR, and there is already great awareness and general comfort with Bupivacaine.

ELADUR.

As you can imagine I like this product opportunity.

It is clearly a superior patch from a patient point of view.

Patients and physicians should really prefer this to Lidoderm.

From an FDA standpoint, this is a conservative product opportunity on the safety spectrum.

One final thing, another pleasant surprise that I discovered once I arrived at DURECT, I've really been impressed by some of our early research activities and by the minimum signing feasibility projects.

I like the business model of having multiple programs underway where the costs are essentially covered, and it seems reasonable to assume that some of these will mature into larger development deals and programs in the coming years.

A number of these programs extend the company's reach into other large therapeutic areas including CNS, oncology, diabetes and animal health, so there is a lot more under the hood here than first meets the eye as an outsider.

The last thing I should briefly comment on is the team here at DURECT.

I've met a number of the key members of the clinical group when Alpharma licensed ELADUR, and being here for just a few short weeks has confirmed for me that there is a strong team place to build around.

So with that, maybe we should take some questions.

Thank you.

And our first question comes from David Amsellem with Piper Jaffray.

Hi.

Thanks for taking the questions.

I joined late, so maybe you've already answered this, but on POSIDUR, do you have any further update on the timing of data from the shoulder surgery study in Australia?

The update we gave was that we are over halfway enrolled with regard to that study, and we expect to have the data before the end of the year.

Okay.

And then secondly, on ELADUR, I know you've talked about it, but how confident are you that King is committed to taking the product through the clinic, and can you give more specifics on when the next study will be started?

Thanks.

I'm highly confident that they are excited about the product and looking forward to taking it forward.

As far as an announcement on when the next clinical trial starts, I think we will have to leave that up to King.

Okay, thanks.

(Operator Instructions) Okay, and our next question actually comes from Jim Molloy with Caris & Company.

Thanks for taking my question.

And I guess maybe this would be a question for Joe.

Always a pleasure to see you at the company, I've had the pleasure working with you for a number of years at your other companies and so I know you're a man of great energy.

What would be your thoughts coming in to DURECT as an outsider and obviously, the developing drugs are a challenge, it takes a long time.

There are some drugs here that have been in development for a while.

Are there any thoughts on you have -- is there any way to really move this forward a little faster or really jump start some of the R&D, or is it just simply the way it has to be, you have to take your time on it?

With all these products, what I really love about them is that they are all products that have been through the FDA in one way, shape or form.

So the good news there is that there's a large safety profile that's already been established with a lot of these, Jim.

In terms of execution and getting them through the FDA, I think as we can all appreciate, that's not easy these days and particularly for this division, and a lot of that has to do with just volume of stuff coming through this division as well as creating somewhat new paradigms, I mean, and POSIDUR is an example there.

And so you've got to be really thoughtful about how you present that case to the agency.

Again, what excites me about these things though, is that -- and POSIDUR is a great example and as an anesthesiologist, I can tell you that pain control is a really important deal, not just in chronic pain, but in acute pain.

So we need to present that case to the agency, make them comfortable.

I believe we can do that.

We have clearly done a lot of that already and now it's just a matter of execution, and I'm looking forward to doing that with this team, bridging off of what we did at Alpharma.

Okay, thank you for that.

I guess maybe on the feasibility study, the 1.4 million, obviously not a big number, but it's good to see, clearly.

Are there any -- what would be sort of an upside number in some of these feasibility studies' work could do over the next billion dollar drug out of this, or is this really more modest?

That's a great question, Jim and in fact, probably the best way to answer that would be REMOXY started as a small preclinical relationship and evolved into what will be our first -- hopefully be our first product on the market if things keep going this way.

So there's always an opportunity for these to mature into a full fledged development opportunity, development deal.

And maybe my last question would be, any thoughts, the FDA panel for acetaminophen?

Obviously a bit of a surprising vote.

Any thoughts on how that may impact your clinical development programs?

I'll let Joe --

I'll take that one.

We don't have acetaminophen, so the good news for us right now is we don't have to deal with those issues.

I think it's -- for us, it tells us that the agency is actually taking acute pain and peri-operative pain very seriously.

So it's actually a good thing for us, because it helps get a lot of those issues out in front of us so we can understand where they are going.

Clearly with acetaminophen, they have other issues to deal with that we don't, but in general, I think this is a very good thing, actually.

It helps us understand end points, it helps us understand how things may go at the FDA with this particular advisory committee.

So all in all, I think it's a very good thing and furthermore, I don't know if it's a slam dunk that those products are necessarily going to come off the market either.

That's my own personal opinion.

There's a lot of track record and history with acetaminophen, and those companies have to be safe as they approach that.

I like opioids and I certainly like long acting analgesics as well, Bupivacaine as an example.

And again, we just don't tend to see these type of issues with opioids and long acting local analgesics.

Thank you, guys for taking the questions.

Sure.

And we have another question coming from Neil Gagnon with Gagnon Securities.

Can you hear me?

Yes, we can, Neil.

On the feasibility studies, we haven't seen any of those for a while, so how come four of them are perking now and tell us why the, if you will, rejuvenation of the DURIN technology.

I think it's a good -- Felix, do you want to address that one?

I think that this company has technology that it has applied to a very mature pipeline now and since that pipeline has been launched, we have been basically taking the R&D team to focus them on the next wave of technology and especially the Depot technology is very exciting because that gives us an angle on the biotechs field.

I think what you saw in the '70s and the '80s with the pharma company buying into direct delivery when the franchise were going off patent, I think we will see the same phenomenon happening now that the generics are coming out so people are looking for bio (inaudible).

So I think this is a great opportunity for us.

So we have done a lot of homework to the point that we can convince partners to come in here and DURIN technology is really a very important technology from the point of view that you can deliver for rather long periods of time from months to a year in a very controlled fashion and based on technology that is strengthened significantly by the synthetic capability that we have in Birmingham, Alabama, where we have a polymer synthesis group that sells actually LACTEL polymers for seven FDA approved products.

So we have a significant capability in the area.

So I think that with the SABER technology, the injectable Depots take us some days to one week to one month and then the DURIN technology takes them out further.

Felix, thanks for the explanation.

You're welcome.

And our next question comes from [Jeffrey DeSeibert] with KB Advisors.

The issue of your burn rate, so $5.1 million in the last quarter, could you give us a feel over the next quarter or two whether you think that is going to be about the same rate, or would it change and if so, why?

Well, I'll handle that.

Typically, Jeffrey, we don't give guidance other than at the beginning of the year for how much cash we think we will burn for the rest of the year.

I think the main statement I would make is if you took a look at the first half of this year, we burned about $11 million.

So if you took that and very simplistically multiplied by two and said that's kind of your annual run rate, we are obviously well below the low end of the cash burn guidance that we gave at the beginning of the year or if I take last quarter and multiply by four, again, you're way short of the low end of our guidance.

And this is in part a function of the fact that we took steps in March to reduce our headcount and we have just been very conservative in how we spend.

I guess qualitatively, we do have some additional outside clinical studies that we think this spending will go up a little bit in the second half but probably not major, so I guess I'm sort of easing into saying that our first half run rate plus a tiny bit is probably about accurate right now.

Thank you.

Given the developments -- so as a follow onto that, given the developments of REMOXY where it's unlikely that there would be any material revenues until sometime in 2011, can you give us a better feel on the probability of a transaction -- let's start with TRANSDUR, right?

What do you think the odds are of a transaction on TRANSDUR in the next quarter or two?

We actually, we don't like to -- this is Jim now.

We don't like to project those, the probability of any deal on any one given time frame because then we are simply put the power into the hands of those to whom we are negotiating and having business discussions.

But I can tell you that we are active discussions not only for the transfer of the Sufentanil project but also for the POSIDUR program.

We have electronic -- what we call E rooms up and we have numerous companies for both these products in these rooms.

As you can imagine, there are very few products out there that are ready to step into Phase III where in fact for POSIDUR, we already have some significant efficacy data in our hernia trial already in the books that have the upside potential of these products and the lower development risk because the active (inaudible) themselves have already been approved by the FDA and work.

So we actually feel very comfortable that we will be able to partner these products; as to the relative timing, we can't project those.

All right, thank you.

And now we have Nick Farwell with the Arbor Group.

Good afternoon.

I just have a quick follow-on question to Jim's.

You commented on the four feasibility studies which are leveraging your delivery technology.

Can you update us on any new internally developed products or programs either entering Phase I or at a point that's -- or perhaps give us some indication that something might be exiting Phase I?

Just give us some feel for that area?

We always have work that we fund internally here, but we typically in the past haven't talked about those until we are in Phase II, and so I don't think we will probably break that at this point in time.

We have the four lead products that we have here and for a company our size, we think it's an amazing pipeline and so we just -- we will keep our powder dry on the others and then we will announce them when they mature to that point, and sometimes we will announce when we have a deal.

So, one way or the other.

Is it likely that we may have another announcement within, say, a year or so?

I wouldn't count that out at all, no.

I think it's a very likely possibility.

By year-end?

I'm not going to give you any more color than that.

Thanks, though, I appreciate the question.

Thank you.

(Operator Instructions) Okay.

We have a question from Dave Windley with Jefferies & Company.

Go ahead, Dave.

Thanks.

I feel like I've hit every key on my phone and can't seem to get in the queue.

Thanks for taking the question.

You win the tickets.

All right.

All right.

Finally, they have pulled my ticket out of the hopper.

The -- Joe, the question for you, the question that I asked you when we met at our conference earlier in the summer is the same one I'm going to ask now, and that is are you able, having joined the company at this time, to insert yourself in REMOXY activities, or is that pretty much in King's hands and their deal to fix and resubmit?

Yes, it's a good question.

That's really in their hands and it's under their watch about how they are going to approach that and so obviously, we always keep our eyes on that and we try to keep the pulse on what's happening, but it really is a King issue at this point.

And are you there to the extent that they need material from direct, they are in communication and is that communication also include regulatory discussions and the like?

Actually, we -- I'll take this one.

We actually do provide some (inaudible) support for the programs but the interactions are all between King and the FDA.

So we -- what King do and come and communicate to us as to what they need and we provide them a small piece of kind of the overall pie.

Okay.

And Felix, on the technology platform, where are your thoughts in regard to delivery of larger molecules and perhaps whether it's biologic delivery of a novel branded nature or even on some type of biosimilar, biobetter strategy?

Well, sure, that is really, I think, one of our key focus for our research activities, and we are very fortunate to have the SABER technology.

It's a hydrophobic matrix, which means you can shield the proteins and peptides from water, and we fabricate these technologies and dosage forms with the proprietary synthesized materials out of Birmingham, Alabama, out of the safe BLGA technology area.

So we are optimizing these Depots to be able to go through fine needle, to have hydroloading say 10 times what you can get in a micro capsule, therefore you have less pain on injection but a remarkably low burst or initial release, very constant delivery for days to a month with actually, for some large molecules.

And it seems that irregardless of the molecular weights, we can do this with peptides and proteins and we have a number of strategies now where we have been able to do this in a very secure way.

We have some molecules of our own that we actually have taken through some activities, and we are also in the process of partnering some of the initiatives that we have taken a little bit down the pike but in the main, we are working with drugs that are in the pipelines of the larger companies, and we have a variety of them that Joe already mentioned, in the oncology area, we have two in the diabetes area, animal health and CNS, so we have a nice portfolio of budding projects.

And I'm sorry, Felix, those areas that you just named off, those are large molecules specifically?

There is some small molecules in there too and -- but there are also about -- the majority of large molecules, yes.

Okay, and I apologize.

This may have been more clear and I missed it, but does this part of the discussion intersect with the four new feasibility studies that you're announcing today ,or are those two separate buckets of opportunity?

Those four are part of that bucket.

Okay.

And in addition, those are new partnerships that we announced, the feasibility projects, but we have some internal activities ongoing as well for our own accounts, small molecules and large molecules and so when they mature, we will have do -- we will have some -- we expect some deals on those as well.

Okay.

And the four that you're announcing today are a mix of small and large?

Yes.

Okay.

And so, Jim, just to include you in the conversation here, when are we going to hear that next partnering deal?

As I said earlier, it's going to be -- oh, you didn't hear that one, huh?

No.

I'm very familiar with the answer to that question.

I'll let you off the hook on that.

Okay.

If you press the right number, you maybe --

Thanks a lot.

Good luck.

All right.

And we have a question from Jeffrey DeSeibert with KB Advisors.

Thank you.

Two follow-up questions.

First of all, on these four new feasibility studies, could you give us just a little bit of a sense of the type of partners you're working with?

I presume that what they are doing is making some contribution to R&D expense to take these projects up to a Phase I or something of that nature, but so we understand, would you say that you're partnering with emerging companies, small, medium, large?

Could you give us just some color so we can understand whether these companies, if something comes of these projects, have the wherewithal to step up to a bigger deal?

It's a great question and it does run the full gamut, actually.

We have some small startups that are private and we have some of the biggest pharmaceutical companies in the world and biotechnology companies in the world.

So it really does depend on each circumstance and so.

Okay.

So within the four, it goes -- you could scatter it from smallest to largest?

Exactly.

All right.

And then coming back to REMOXY, which is, I'm sure, a topic you get sometimes occasionally bored by, one of the key things that King told us in the July call was they were having to do some product stability study that would take six months.

Have -- has DURECT ever encountered any stability issues with REMOXY?

No, we haven't seen any stability issues with our formulation at all.

And one of the ways you can get some additional color with regard to REMOXY is, I believe that King's earnings call is going to be this Thursday and so one of the -- and Brian is usually pretty straight forthcoming with regard to questions asked of him.

So I would give a listen to that.

Well, thank you.

Sure.

That was certainly on the list, but as you do have something to do with --

Sure.

-- making REMOXY, we figured -- or I thought that you might be able to comment on whether you've encountered any stability issues.

No, we have not but as well, we are only allowed to speak to the specifics that our partner will allow us to and so with respect to them, we will just have to be kind of vague.

All right.

Well -- and I'll join a couple of the other people to say, so when is the next deal being signed?

Once again, you haven't pushed the right number.

I think you guys got to keep trying.

Thank you.

All righty.

(Operator Instructions)

Okay.

It does not appear there are any further questions.

Thank you.

That being the case, thank you all for participating and look forward to providing you with updates down the road.

Thanks a lot.

Bye-bye.