DURECT Corp (DRRX) 2014 Q4 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the 2014 year-end's conference call.

(Operator Instructions)

It is now my pleasure to introduce your host, Mr. Matt Hogan.

Thank you, sir.

You may begin.

Okay.

Good afternoon.

Welcome to our fourth-quarter earnings call.

This call will begin with a brief review of our financial results, and then Jim Brown, our president and CEO, will provide an update on the 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 development, expected product benefits, our development plans, future clinical trials, or projected financial results.

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

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

So let me now turn briefly to our financials.

Total revenue was $4.3 million in the fourth quarter of 2014, essentially the same as in the fourth quarter of 2013.

Excluding all deferred revenue recognized for up-front fees from our agreements, revenue from our R&D collaborations was $1.2 million in the fourth quarter 2014, as compared to $1.4 million in the fourth quarter 2013.

Revenue from that source always fluctuates from quarter to quarter, depending on the state of development under the various programs and what our role is in those programs.

Product revenue, largely from the sale of ALZET pumps and LACTEL polymers, was approximately $3 million in the fourth quarter 2014, as compared to $2.9 million in the fourth quarter 2013.

Our gross margin on these products was around 60% in the fourth quarter.

And these product lines continue to be strongly cash flow positive for us.

R&D expense was $5.4 million in the fourth quarter 2014, which compares to $4.9 million in the fourth quarter last year.

SG&A expenses were $3 million in the quarter this year, as compared to $3.5 million in the quarter last year.

So our resulting net loss for the quarter was $5.9 million, which compares to a net loss of $5.1 million for the same period last year.

And at December 31, 2014, we had cash and investments of $34.9 million, which compares $24.4 million at December 31, 2013.

We also have $19.8 million in long-term debt.

With that, let me turn it over to Jim.

Thank you, Matt.

We have something totally new to talk about today, so I'm going to be brief with respect to our pipeline and give a short update on POSIDUR and REMOXY before introducing our new program.

With regard to REMOXY, Pain Therapeutics has stated that they are focused on an orderly transfer of the program back from Pfizer, which is due to be completed by late April.

At that time point, Pain Therapeutics can finalize their strategy for resubmitting the NDA and advancing their partnering efforts.

We've been in contact with Pain Therapeutics, shared with them our knowledge from the work we conducted with Pfizer, and we are standing by, ready to assist Pain Therapeutics in whatever way we can.

In terms of relevant developments in the space, Pfizer has announced that the FDA has accepted the NDA for ALO-2 and although we haven't seen the PDUFA date yet publicized.

We maintain that REMOXY has a more straightforward approach to abuse deterrence without having to introduce another agent of the drug that could, if chewed by a legitimate user, lead to withdrawal symptoms.

We look forward to updates from Pain Therapeutics when the program transfer is completed in about two months.

Now moving to POSIDUR, since our face-to-face meeting with the FDA in late September, we've had additional interactions with them to clarify what we need to do to address the complete response letter.

These interactions have done a lot to clarify key points with the FDA.

We've sent the FDA a synopsis of our protocol we propose for a clinical study that is designed to gather the data the FDA would like to see in the NDA resubmission.

When we get feedback from the FDA, we'll be in a position to finalize the protocol.

In the interim, we're engaging with CROs and key investigators regarding conduct of the trial.

Rather than talk about the trial now, we'd rather get feedback from the FDA on our protocol synopsis, and then we'll be in a far better position to describe the trial.

This clarity with the FDA has been the missing piece for our parting discussions.

There is clear interest in the program from multiple parties, so we're looking forward to getting feedback -- this feedback from the FDA.

The interest in this program is driven by the substantial market opportunity for a true three-day post-surgical pain product that has the potential to meaningfully reduce opioid use in this setting.

Now let me turn to our new program.

I'm excited today to be a able to introduce DURECT Corporation's Epigenomic regulator program.

The lead molecule from this program is a molecule we refer to as DUR-928.

It's an endogenous small molecule.

DUR-928 is a epigenomic regulator of lipid homeostasis, inflammation, and cell survival.

Within this Epigenomic program, we have identified a family of compounds with additional endogenous molecules that we have discovered, and we have an ongoing analogue program.

DUR-928 is the most exciting molecule I've had the opportunity to work on, and I've been in the industry for more than 30 years.

Some of the biggest names in the industry have spent a lot of money trying to find a molecule that does only part of what DUR-928 does naturally.

DUR-928 inhibits cholesterol synthesis more broadly than statins.

It inhibits triglyceride synthesis.

DUR-928 inhibits bile acid and fatty acid synthesis, like the bile acid analogues that are FRX agonists.

DUR-928 inhibits lipid absorption and transportation via MTP, like Lomitapide.

DUR-928 down-regulates PCFK-9 and it can be given orally.

DUR-928 inhibits inflammation similar to Fibrates, it down-regulates GNF-alpha, the interleukins, COX-2 and others.

DUR-928 improves cell survival.

It also increases bile acid secretion.

It improves insulin sensitivity, and improves glucose intolerance.

DUR-928 does all of this, and it occurs naturally within the body.

I was introduced to DUR-928 through the results from a high-fat diet mouse study, in which the molecule had demonstrated a marked improvement in liver morphology and other measurements after just six weeks of treatment.

In this trial, mice were divided into two groups, with one group being fed a chow diet for 10 weeks, and the other group being fed a high-fat diet for 10 weeks.

The high-fat animals, of course, gained weight and it subsequently issues from that.

Post the 10 weeks of feeding, the chow diet was then given a placebo for the next six weeks, while the high-fat diet animals were divided into two groups, half gaining a placebo, and the other half receiving DUR-928 in the presence of that high-fat diet.

The end results are very striking if one just simply looks at the liver morphology, and post this call, if you go onto our website, you'll be out to look at the histopath slide from this trial, and you will be able to see in the high-fat diet placebo group, very large vacuoles of what most likely is triglycerides and cholesterol in the livers in the mice, that if you look at the high-fat diet plus DUR-928, that infrastructure -- that histological appearance of the liver tissue looks much more normal.

On top of that, we saw an improvement in insulin sensitivity in the mice treated with DUR-928, we saw an improvement in glucose tolerance, we saw a reduction in liver triglycerides and cholesterol, we saw a reduction in ALT and AST and in circulating plasma, and also a reduction in plasma cholesterol.

I'm going to review briefly some highlights from this Epigenomic regulator program.

We have a family of endogenous regulators and their analogues.

We have novel mechanisms of action, with compelling data from multiple animal models.

We have the potential for orphan and broad-based indications, from a -- with regard to acute organ injury, which is one of the areas we're pursuing for this, we're going to be using an injectable formulation and for chronic metabolic and lipid disorders, we'll be using an oral formulation.

The program was end-licensed in 2012, and we have exclusive worldwide rights with issued and numerous pending patents.

We recently successfully completed the initial phase 1 study with further clinical trials planned for 2015.

What do I mean when I say endogenous molecule?

Endogenous means is produced naturally within our bodies.

It is actually -- this molecule is in your body right now, it's been in since before you were born.

There been a number of endogenous molecules that have become important therapeutics over the years.

I'll just list out some of them.

You need to do this off the top of your head.

It's insulin, it's corticosteroids, thyroid hormone, growth hormone, erythropoeitin, and granulocytic stimulating factor.

This Epigenomic regular program is a collaboration between DURECT and the Department of Internal Medicine at Virginia Commonwealth University.

The VCU medical center and the VA's McGuire medical Center in Richmond, Virginia.

It is now entering -- or it's well into its fourth year.

We received substantial additional funding from NIH grants, the VA Merit Review awards, Research Career Scientist award, and the American Liver Scholar award.

The discoveries from this program are the culmination of more than 20 years of lipid research by Dr. Shunlin Ren, who is a M.D., PhD.

Dr. Ren is one of the world's experts in cholesterol metabolism.

With regard to DUR-928 biomedical activity, it regulates 240 genes.

DUR-928 is an endogenous regulator, as I stated earlier, of lipid homeostasis, inflammation, and cell survival.

With regard to lipid homeostasis, DUR-928 down-regulates LXR and other associated nuclear receptors.

It reduces the enzymes that control cholesterol, bile acid, and fatty acid synthesis, as well as triglyceride synthesis.

It also inhibits ACC and other important molecules such as PCSK9.

It increases BAT, which is associated with bile acid secretion.

The results of all this is a free-fatty acids, triglycerides, and cholesterol synthesis.

A reduction of VLDLs and LDLs.

It also increases bile acid secretion.

With regard to inflammation, DUR-928 is a ppar-gamma agonist.

It increases nuclear ppar-gamma It increases I-kappa-beta, and then decreases NF-kappa-beta and TNF-Alpha.

It reduces IL-1A and a number of other interleukins, as well as COX-2 and others.

The end result is reduced inflammation and improved insulin sensitivity.

With regard to cell survival, DUR-928 down-regulates 24 genes associated with apoptosis and cell survival.

The result is that we have a reduction of apoptosis and necrosis, as well as improved cell survival in a number of models.

I'm now going to review quite briefly a lot of animal data, but I will do it in a very short way.

We're introducing today data from three acute organ injury models and three chronic disease models.

The three acute organ injury models are a liver toxicity model, and endotoxin induced septic shock model, and a renal ischemia reperfusion model.

The three chronic disease models are the Fat mouse diet model which I described earlier, there's also a fat diet hamster model, and a non-alcoholic fatty liver disease/non-alchoholic Steatohepatitis mouse model.

With regard to these models that I haven't described yet, the high-fat diet hamster model improved liver morphology and reduced lipids after treatment for six weeks.

With regard to the mouse NASH model, we saw a reduction in NASH score -- a statistically significant reduction in NASH score and fibrosis after treatment for only four weeks.

In our mouse chemical injury model, these mice were dosed with acetaminophen and ethanol simultaneously, and the ones that were treated with 928, 90% lived.

The vehicle animals, only 10% lived.

In the endotoxin injury model, these animals -- mice, again, were treated with endotoxin.

100% lived if they received 928, only 40% if they received vehicle.

And in the mouse kidney ischemic model, this is a model where blood flow is restricted to the kidney.

We saw a statistically significant reduction in serum creatinine and blood urea nitrogen in the animals that received DUR 928.

So, how can it be that one molecule can have such broad activity?

How can it improve liver morphology, reduce triglycerides and cholesterol in mice and hamsters fed high fat, how can it reduce fibrosis and a NASH score in a mouse model for NASH, and improve survival with acetaminophen or ethanol, or endotoxin and also treat ischemic injuries?

The reason it can do that is because it is -- it works at a very high level.

It is endogenous epigenomic regulator and it is a major player in lipid homeostasis, inflammation, and cell survival.

This results in broad potential clinical utility, both for orphan disease, as well as for diseases of large populations, and we're going to use our oral delivery to treat the chronic indications and injectables for the acute.

We recently completed a phase 1 first-in-human PK trial and safety trial for DUR 928.

This trial was conducted in healthy subjects.

It was a single site, a randomized double blind placebo controlled single ascending dose trial that involved 30 subjects.

We dosed at five doses, the highest of which resulted in plasma levels that were 100-fold -- greater than 100 fold higher than endogenous levels of DUR 298.

We saw no treatment related side effects at any dose.

The half-life of this product appears to be suitable for once a day or less frequent dosing.

We may be at twice a week.

It depends.

We're going to tease this out as we go forward.

This is, of course, a precursor to the phase 1 multiple ascending dose trial that we have scheduled for the middle of this year.

I'll briefly review some potential therapeutic opportunities.

One of the potential clinical indications for DUR 928 is acute organ injury.

The initial indications of interest are acute kidney injury, acute liver failure and ischemia reperfusion injury.

The support of animal models are, as I've outlined earlier, the acetaminophen ethanol exposure model in mice, the bacterial endotoxin model in mice, and the rat temporary renal artery occlusion model.

Postoperative acute kidney injury, or AKI, has been associated with cardiac surgery and other major surgeries.

It's an increasing incidence -- we're seeing an increased incidence of this, and it affects anywhere from 5% to 25% of the patients who are undergoing major surgery.

An AKI can portend a poor outcome such that even small elevations of creatinine are significant and have been associated with dialysis and reduced survival.

Another potential indication or indications of this molecule is chronic liver disease.

The initial indications of interest are nonalcoholic fatty liver disease, and nonalcoholic steatohepatitis Additionally, multiple orphan indications are also potential targets for this molecule, and the supportive data we have here are the high-fat mouse and the high-fat hamster diet models, and the mouse NAFLD/NASH model.

NAFLD/NASH is a growing global epidemic.

NAFLD and NASH are the hepatic manifestations of the metabolic syndrome, and NAFLD prevalence has actually doubled in the last 20 years in the United States, to the point now where 33% of the US population has NAFLD.

And 3% to 5% of Americans, which represent somewhere between 9 million and 15 million people have NASH, and 20% of these people will go on to develop cirrhosis.

By comparison, between 1999 and 2002, the prevalence of hepatitis-C virus infection in the United States was 1.6%.

It is projected that soon NASH will be the number one cause of liver transplant in the United States.

In summary, DUR 928 is a novel endogenous small molecule epigenomic regulator of lipid homeostasis, inflammation, and cell survival.

We have compelling data from multiple animal models.

With acute organ injury, we've seen improved post ischemia organ function, and we've seen improved survival.

For chronic metabolic disease, we've seen improved liver morphology and reduced liver triglycerides and cholesterol.

We've seen reduced inflammation, fibrosis, and NASH score.

We've seen improved glucose tolerance and insulin sensitivity.

We have an injectable formulation for acute dosing; we have an oral formulation for chronic dosing.

It is suitable for once-a-day or less frequent dosing.

No toxicity has been observed in any of our preclinical studies to date, and no adverse events were observed in our initial phase 1 trial.

Our next steps for DUR 928 are a number of phase 1 trials this year.

We expect to start a multiple ascending dose oral phase 1 trial in the middle of this year.

We'll beginning a single-dose injectable phase 1 trial in the second half of this year, and a multiple ascending dose injectable phase 1 trial to begin in the fourth quarter of this year.

Phase II we expect to begin in 2016 in one or more patient populations.

For acute organ injury, which is an orphan indication, with the injectable formulation, and on the chronic front, an orphan chronic indication with the oral formulation, as well a chronic indication that is not orphan, such as NAFLD and NASH.

It is now my great pleasure to introduce Dr. Tom Bersot, who has been a consultant for this program for the past two years.

Dr. Bersot has spent 39 years at DNAH and UCSF in the field of lipid disorders and cardiovascular diseases.

He's a professor of medicine at UCSF, an investigator at the Gladstone Institute for more than 35 years, the director of the lipid clinic at San Francisco General Hospital.

Dr. Bersot also served for five years between 2007 and 2011 at the FDA at the endocrinologic and metabolic drugs advisory committee, and has held various leadership positions in the American Heart Association and the National Lipid Association, where he was a past president.

He frequently reviews and holds editorial positions on a number of key important journals.

Dr. Bersot's research interests cover plasmid lipid metabolism, cellular cholesterol metabolism, hyperlipidemia, and prevention of coronary artery disease.

In addition to his clinical practice, he has over 60 publications and 14 abstracts, including a chapter in Goodman and Gillman's Drug Therapy for hypercholesteralemia and hyperlipidemia.

Dr. Bersot has most recently served as a scientific consultant for Genzyme, on Mipomersin and at Gerion on [Juxtapid], both of which were recently approved by the FDA for the treatment of Homozygous familial hypercholesteralemia.

With no further ado, Dr. Bersot.

Thank you, Jim, and I will be short, but as Jim mentioned, I was brought on-board by DURECT about two years ago and because of my background in plasma lipid lipoprotein metabolism, looking at causes and new treatments.

And I, frankly, was amazed to learn the effects of one endogenous compound on many aspects of intermediary metabolism that relate to diabetes and lipid metabolism.

And, I don't think there's any compound, approved or not, that I know of that can lower triglycerides, lower LDL cholesterol concentrations, enhance insulin sensitivity, be associated with weight loss, and at the same time have this tremendous effect on reducing triglyceride accumulation in the liver, which is a precursor to fibrosis, scarring of the liver, subsequent development of cirrhosis, and then that also is associated with increased risk of liver cancer, hepatocellular carcinoma.

And then as I continued to work with DURECT, all these other results of effects on inflammation in the acute and chronic models that Jim just described, makes DUR 928 a compound that, I think, is unique in my experience with regard to the very wide range of potential indications that it might have.

It's quite an exciting preclinical program, and it's going to be exciting to see where this goes as it enters clinical stages.

Thank you very much.

With that, I think we'll turn it over to any questions you might have.

(Operator Instructions)

Irena Coughler.

You are clearly very excited about this molecule, and it sounds really interesting.

I just wanted to go back to more mundane matters, like if you could outline for us the cadence of data releases?

Also any manufacturing information on this compound?

And, there's obviously a ton of work that can be done, and just wondering how you're going to do it in a cost-efficient manner such that you take it one step at a time, and rather than starting all the programs at once to conserve spending?

First, I appreciate your question, and we absolutely believe in the same thing.

One could make a good case for starting multiple Phase 2's simultaneously for this.

It certainly is a great molecule that has that potential.

But we are in the company that we are, and so we have to be focused.

And so, we're going to take that approach, and we have taken that approach.

We have a lot of additional data on top this.

We're going to be going out and sharing more of this information with people, but I can tell you the backup slide on pharmacology alone -- that deck is probably 60 slides, so there's a lot of good information that we already have.

You'll see additional information come out with regard to these clinical trials that I outlined as the year unfolds.

As far as manufacturing is concerned, a good point with a new chemical entity.

We actually have a very senior team here at DURECT, people I worked with, quite frankly, since 1985.

So, I've known these guys long time, and we've been able to get that well in hand.

We've actually already scaled up at the GMP level to a kilo, starting obviously, with initially the milligram level, so that we've got GMP product, and we're banging out all the chronic [talks] and those kind of things, and looking forward to advancing this into phase 2 next year.

But we'll do it in a very controlled fashion.

I would expect once this news is out, we might have some people who would be interested in helping us with one of these molecules or one of the indications for one of these, and that's a possibility as well, and so we could leverage some things there.

What about data timing?

is there anything that we're going to see in the next couple quarters?

Absolutely.

You will be seeing information on a fairly regular basis as the year unfolds.

But I think to be a little more specific, I think there will be some additional animal data that we will be able to get out this year.

From a human standpoint, as Jim mentioned, we're going to be starting this multi-ascending dose oral study in the middle of the year, and we'd expect to have results from that this year.

And, we will also be doing some single-dose injectable Phase I work in the second half of this year, and be able to publish data from that.

And then that will roll that into a multiple ascending dose injectable trial this year as well.

So all of that will come out in the way of data.

I think the last thing is, as we have a little bit more time to prioritize these Phase 2 indications, we'll be able to communicate a little bit more what the plan is for 2016 in terms of which ones we're going to go after first.

That's when you'll start to see potential signs of activity in real patients, and that could be the real inflection point and value for the Company.

The beautiful thing from this compound though, is that it is an endogenous molecule, and as such there is a safe amount that we can give.

If you think about the endogenous molecules that I just read off, there aren't too many of those that can give 100-fold the natural concentrations and not have issues.

So, we think that this is a -- we've talked about it being a homeostatic molecule.

It sits up at a very senior level.

It's an Epigenomic regulator, and it has a way of kind of quieting the whole system down, which is really exciting.

And just other questions, can you update us on the status of ELADUR?

And also, are there any development or partnering milestones that you're expecting in 2015?

Or can you outline any of those for us?

Thanks.

For ELADUR, there were -- impacts had the meeting with the FDA and I think they'll be the next to communicate the next steps, which will be some additional clinical work.

I don't know, right now, what their plans -- they haven't communicated that, so I'll wait for them to do that.

So I would expect that we'll see some of that work start this year and them communicating that.

As far as additional business development milestones, we have our ongoing feasibility work that we'll be continuing to do.

I think there's a reasonable opportunity to potentially have a POSIDUR deal in place this year, especially now that we're getting clarity with regard to what we hope will be the last clinical work to be done for this molecule.

Then, now that 928's out there, there is the potential that we may be able to put a partnership in place, should someone be interested and pursue -- in pursuing one of the indications for this molecule, or maybe something else in that program's pipeline.

Jason Napodano.

DUR-928 certainly sounds like an interesting opportunity.

You mentioned that you end-licensed the drug in 2012.

I'm wondering how this came about, and how you got hooked up with VCU?

It's certainly a change in strategy for you guys away from the Company's proprietary drug delivery platform to develop a novel small molecule for things like NASH or acute organ injury.

The first question, I guess, is I'm intrigued as to how this came about?

Sure.

It came about because one of our scientists here, she's a very accomplished M.D. PhD in her own right, and she has -- is constantly out scouting around for opportunities for us.

She had a relationship with and knew professor Ren for many years and he came and contacted her, and described the program to her; came back and talked to Felix and myself about it.

When we learned about it, it looked pretty exciting.

I think within less than 48 hours I was on a plane to meet him, and we did the deal pretty quickly thereafter.

I've been in the industry a long time, and you don't see too many things like this coming along.

It's the most interesting thing I've ever seen.

To have an endogenous molecule that has this breadth of capability is -- I think we're just scratching the surface with it.

It's tremendously exciting.

So I think, quite frankly, we were lucky.

A lot of times if you look at major discoveries, that's what happens.

You've got to get lucky.

So you mentioned the Phase 1's this year, and the Phase 2's to start next year.

Ultimately, what is your goal with this molecule?

Are you looking to partner it, or is this something that you think DURECT would like to take into phase 3 or even commercialize?

This great opportunity on this on multiple fronts.

It's interesting because it's got kind of two angles that we talked about.

I talked about the oral chronic utility, and that has -- you can think of the NAFLD/NASH molecules that are out there, and the ones treating various orphan diseases in those spaces.

Well, we can definitely -- we have a player now, I think what will be a major player in that space with this molecule.

And certainly, that is something we can do in our own.

That is something that also may naturally fit possibly with a bigger potential partner there, but we'll see as we go forward.

Then we have the acute use.

The acute organ injury and that kind of thing.

That actually fits quite nicely with our general strategy as a Company, going forward, and these are many times orphan diseases, so they hopefully won't be as quite as onerous getting through from a regulatory standpoint, and they can make a big difference.

If you look at that renal model of arterial occlusion, the animals in that model, the ones that were treated with 928 had a creatinine drop, and improvement in creatinine of about 2.4 mg/dL.

To put that in perspective, there was a 3000 some odd patient cardiac surgery trial that they track these patients, and patients that had a 0.5 mg/dL drop in creatinine, within then less than 90 days after surgery, 20% of those patients had passed away; and the mortality continued for the next three years, to the point that 30%, with 1/5 effectively the protection that we could offer those rats.

Granted, it's rats versus humans it's different ages, different concomitant diseases and everything else, but nevertheless, that's the exact same biomarker, and that's quite an improvement.

You mentioned previous grants from the NIH.

Is there potential for future work or non-dilutive funding with those guys?

Yes.

The professor -- this is his body of work.

He has been quite successful.

I think he was in 2014 -- I forget the exact year, he was in the top 2% of receiving grants in this space, so he really is a heavy lifter there, and so I would expect that he will continue.

He's been doing this for a long time.

I just wanted to touch base on the deal that you announced in January with Santen.

I guess just two questions.

How long were you guys in feasibility work with Santen before the announcement of the upfront payment?

Just trying to get a sense of --

I think it's about two years.

Okay.

And then, this is interesting now, because I think this is your second deal for Asia.

You've got a partnership with Orient Pharma and now you've got a partnership with Santen, and I'm wondering if a lot more doors have been kicked open over there because of other companies seeing that you're partnering with their fellow native companies?

You're right.

They're very different markets.

Obviously, Orient Pharma is in Taiwan, and Santen is in Japan, but certainly in both of those areas, I think the doors have been opened.

In particular with regard to Santen post-data, we've seen a lot of interest from Japanese companies.

I, quite frankly, think that 928 is going to have some interest over there.

There a number of Japanese companies that are looking to get into this pace, and so we -- there are people I'm sure we will be talking to.

(Operator Instructions)

Andrew Ang.

Regarding POSIDUR, can you provide a timeline for when you would conduct the study and resubmit the application?

And second, regarding the new program, how does this new program leverage your technology or platform?

Is this a bigger part of effort to change the focus of your Company?

Okay.

First with regard to the timeline on POSIDUR, until we get the feedback from the FDA, it's impossible to lay that timeline out, but we will be sharing more as we get feedback from them.

So I can't give you a lot of color there.

With regard to 928 and the strategy of DURECT, we see ourselves as a company who develops products, and we have a lot of people here originally came from ALZA for sure, but we also have a lot of people who have come from many other Pharmaceutical companies and have got great backgrounds on developing new chemical entities.

And I don't know, Matt, do you know that number off the top of your head?

We counted up the number of NDAs that --

I think it's over 50.

For the 928 team, and this maybe 12 or 10 people on the team, they've done over 50 new chemical entity NDA's.

So we certainly have the experience here to get it done, whether you look at pharmacokinetic or toxicology, pharmacology, clinical medicine, quality.

These people have all been there, and so that's how come we were able to do as much work as we did.

We took this thing from just ground zero to, within a little over three years, be in phase 1. If you look at some of the other companies out there that are taking these molecules on and doing this, you won't see as quick a timeline, I don't think.

So we're not going away from our drug delivery routes.

We're still taking those programs forward and those partnerships, and we have our dedicated teams to make that work.

We also have a DUR-928 team that is doing their work, and so we just compartmentalize and people do the work in front of them.

So you see yourself really expanding past the pain market?

Yes.

For sure.

Finally.

At this time, there are no further questions.

I would like to turn it back to Management for any closing comments.

As everybody knows, we're happy to talk to you about the Company, so over the course of the next day or two if you have any questions, or you want to learn more about DUR-928 or our other programs, please do reach out and give us a call, and we'll be happy to spend some time with you.

With that, thanks for your interest.

Ladies and gentlemen, this concludes today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.