DURECT Corp (DRRX) 2015 Q2 法說會逐字稿

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  • Operator

  • Greetings.

  • Welcome to DURECT's second-quarter earnings conference call.

  • (Operator Instructions)

  • As a reminder this conference is being recorded.

  • I would now like to turn the conference over to your host Matt Hogan, Chief Financial Officer for DURECT.

  • You may begin.

  • Matt Hogan - CFO

  • Good afternoon and welcome to the second-quarter earnings call.

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

  • We'll then, as you heard, open it up for Q&A.

  • Before beginning, I'd 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, our projected financial results.

  • These forward-looking statements involve risks and uncertainties that can 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.

  • Let me now turn to our financials.

  • Total revenue was $4.4 million in the second quarter 2015, compared to $4.6 million in the second quarter of 2014.

  • Excluding all deferred revenue recognized for upfront fees from our agreements, revenue from our R&D collaborations was $1.6 million in the second quarter 2015, as compared to $1.7 million in the second quarter last year.

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

  • Product revenue, largely from the sale of ALZET pumps and lactel polymers, was $2.7 million in the second quarter 2015, as compared to $2.8 million in the second quarter last year.

  • Our gross margin on these products was around 62% in the second quarter 2015, and these product lines continue to be strongly cash flow positive for us.

  • R&D expense was $5.6 million in the second quarter 2015, as compared to $6.1 million in the second quarter last year.

  • SG&A expenses were $2.7 million in the second quarter 2015, as compared to $2.9 million in the second quarter 2014.

  • And our net loss for the second quarter 2015 was $5.5 million, essentially the same as for the comparable period last year.

  • At June 30, 2015, we had cash and investments of $37.8 million, compared to $34.9 million at December 31, 2014.

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

  • Our cash burn rate in the second quarter, if you exclude the equity raises under our ATM facility, was $3.6 million.

  • Subsequent to the end of the quarter, we also reached an agreement with Oxford Finance to modify our term loan.

  • The gist of the amendment is that we extended out the interest only period and final maturity by an extra year.

  • So the interest rate's unchanged at 7.95%, the underlying cost of capital is also unchanged.

  • Final maturity is now July 1, 2019, and principal payments begin in early 2017.

  • With that, I'd like to turn it over to Jim Brown.

  • Jim Brown - President & CEO

  • Thank you Matt.

  • We made significant progress in our three lead programs during the second quarter; in fact, during the entire first half of this year.

  • I'm going to briefly review some highlights, while focusing on development programs which made the most progress in this last quarter.

  • I will start with DUR-928, our Epigenomic Program, and then cover our later stage product candidates that are pursuing 505B2 route to approval.

  • Beginning with our Epigenomics Program and DUR-928: DUR-928 is the lead molecule in this program.

  • It's an endogenous small molecule, the first in a family of newly discovered endogenous steroid hormones.

  • DUR-928 represents a major discovery for DURECT, and a potential major advancement for medicine.

  • DUR-928 has demonstrated significant effects in seven different animal models, as today we announced the data from our latest animal model with DUR-928, and that is its effect in a rat model of stroke.

  • To date, no toxic effects have been seen in the preclinical toxicology studies conducted, nor have we seen any safety signal in the initial phase one studies, despite achieving plasma concentrations of DUR-928 that were at least 100 times the normal endogenous levels in the subjects that were tested.

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

  • We know that DUR-928 affects these three major functions due both to our system's biology work, which elucidates the genes that are affected by DUR-928, and due to our data from various animal models of efficacy.

  • To be clear, we are pursuing two distinct programs with DUR-928.

  • The first is an oral program that's targeting chronic metabolic diseases, and the second, an injectable program that is targeting acute organ injury.

  • Today, we announced positive results from brain stroke model in rats.

  • This study was conducted by a contract research organization in Europe.

  • The stroke lesion was induced by a temporary occlusion of the middle cerebral artery in these rats.

  • This study demonstrated that DUR-928 provided protection against ischemic damage in the brain.

  • In this study, a number of measures were taken at day one and at day seven after induction of the stroke lesion.

  • These measures were lesion volume, edema volume, and T2 lesion, as determined by MRI plus body weight recovery and behavioral recovery.

  • The lesion volumes and brain edema were statistically significantly reduced compared to placebo on day one.

  • The T2 lesions, which is a measure of cell viability vis a MRI, were statistically significantly improved on day one as well as on day seven.

  • The other measurement showed a consistent trend in favor of DUR-928 in this model.

  • The data from this stroke model provides further support to the renal ischemia model and other acute models, and is suggestive of DUR-928's potential against ischemic damage, as well as other acute organ injuries.

  • Our animal data are divided into two main categories, safety and efficacy.

  • With regard to safety, in pharmacokinetic and toxicologies conducted so far in mice, hamsters, rats, dogs, and monkeys, DUR-928 has been found to be safe at all doses that were tested.

  • These nonclinical results supported the initiation of DUR-928 in human safety trials.

  • Regarding efficacy, the biological activity of DUR-928 has been demonstrated in seven different animal disease models, involving three animal species.

  • Four of these models represent acute toxic or ischemic organ injury, and these have been demonstrated in liver, kidney, and now in brain.

  • Three represent the chronic disorders of lipid accumulation, lipid dysfunction, and inflammation and fibrosis, such as NAFLD and NASH.

  • In the pharmacology studies, supporting the chronic indications, DUR-928 demonstrated improved liver morphology and reduced liver triglycerides and cholesterol in mice and hamsters fed a high fat diet.

  • DUR-928 also reduced fibrosis and NASH scores in a mouse NASH model.

  • In the pharmacology study supporting the acute indications, DUR-928 demonstrated an improved survival after injury from acetaminophen and ethanol toxicity in mice, as well as improved survival after exposure to endotoxin in mice, and reduced ischemic injury in a rat kidney model and in a brain stroke model in rats.

  • In March, we reported results from our initial phase one safety study, and in May we announced results from the multiple ascending dose phase one trial.

  • Both of these studies use oral route of administration.

  • They were single site, randomized, double blind, placebo-controlled studies.

  • The single ascending dose study was conducted in 30 subjects and the multiple ascending dose study was in 20 subjects with daily dosing for up to five consecutive days.

  • The high dose resulted in plasma concentrations that were more than 100 times higher than the endogenous levels of DUR-928.

  • DUR-928 was well tolerated at all doses, and there were no severe or serious drug-related adverse events.

  • There was also no accumulation in plasma concentrations observed with repeated dosing.

  • Dose-related increases in plasma concentrations were observed, with a peak plasma concentration being achieved two to six hours after dosing.

  • We are now preparing to conduct similar phase one trials using our injectable formulation.

  • We expect the injectable phase one single and multiple dose studies to be completed by the end of the year.

  • We are pursuing two therapeutic programs for DUR-928.

  • The first is for acute organ injury and the second is for chronic metabolic liver disease.

  • For the DUR-928 acute organ injury program, we will use our injectable formulation.

  • The initial indications of interest are acute kidney injury, acute liver failure, ischemia and reprofusion injury, and these indications each include potential orphan indications.

  • The supportive animal data are from the mouse and acetaminophen and ethanol exposure.

  • Also in mouse, a bacterial endotoxin exposure; in rats, a temporary renal artery occlusion; and also in rats, a brain middle cerebral artery occlusion model.

  • The DUR-928 chronic liver disease program will use our oral formulation.

  • The initial indications for chronic use are nonalcoholic fatty liver disease, nonalcoholic steatohepatitis.

  • Additionally there are multiple orphan indications we plan to investigate, and the supportive animal models here are for the mouse, the high fat diet model, the hamster high fat diet model, and in the mouse, a NAFLD and NASH model.

  • The next steps for DUR-928 are the single dose injectable phase one study, which is set to begin this quarter.

  • Next will be the multiple ascending dose injectable study, which is set to begin in the fourth quarter of this year, with the phase two to begin in 2016 in multiple patient populations for both the chronic and acute programs.

  • We understand that replicating some of the responses that we have seen in our various animal models in man would most likely provide a substantial change in the appreciation of the value of the DUR-928 program, as well as DURECT.

  • The question on the minds of most biotechs investors is when will the DUR-928 development program be outlined in greater detail?

  • What will the initial proof of concept studies be?

  • Which patient populations will be studied?

  • Which efficacy signals or biomarkers will be evaluated, and of course, when will we have the data?

  • These are the key questions for the two DUR-928 development programs.

  • We are currently working with KOLs to define the patient studies we plan to conduct in 2016, and we plan to provide investors with more color into our plans later this year.

  • I will now move on to POSIDUR.

  • We were pleased with the final outcome of our discussions with the FDA and have defined a path forward for POSIDUR.

  • Based on the FDA feedback, we will conduct a phase three trial consisting of approximately 300 patients undergoing laparoscopic cholecystectomy, also known as gallbladder removal.

  • This will be a randomized parallel group, double blind, placebo controlled, multi center trial that will be conducted in the United States.

  • The primary efficacy end point will be pain intensity on movement over the first three days after surgery.

  • We believe the data from this trial will be supportive of the data we have seen in our other pivotal trials in hernia repair and shoulder surgery, and these three pivotal trials will support a robust NDA resubmission.

  • We liked this surgical model and the trial design.

  • Laparoscopic gallbladder removal is one of the most common general surgeries performed each year in the United States.

  • There are about 800,000 procedures per year and most of these are done on an outpatient basis.

  • With the trend towards less invasive surgical procedures wherever possible, this would give us additional efficacy data from another laparoscopic surgery.

  • Lastly, our confidence is based on the positive experience we have had in laparoscopic gallbladder removal.

  • In a previous 50-patient cohort comparing POSIDUR to, in this case, an active comparator, bupivacaine hydrochloride, but using the same statistical methodology we will be employing in this new study, we saw roughly 25% reduction of pain over the first three days after surgery with a P value of 0.0235.

  • In terms of timing, we expect to start enrolling this in the fall of this year and it will take about a year to enroll.

  • After the last patient has enrolled, we believe it will take a few months to get top line data, and then a few more months to finalize reports and prepare the NDA resubmission.

  • After resubmission, there will be a six month review, per PDUFA guidelines.

  • Finalizing the plan for this phase three trial has allowed us to reaccelerate our partnering discussions.

  • There is strong interest in the program from multiple parties.

  • The interest in POSIDUR 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 after surgery.

  • Now that we know the path forward, based on our interactions with the FDA, these potential commercial partners can complete their due diligence and drive forward towards a commercial proposal and business negotiations.

  • We'd like to reiterate a couple of principles.

  • We're not letting any licensing discussions slow down our plans to initiate and conduct this trial.

  • We view POSIDUR as a very valuable asset, such that we are up to a partnership if the terms are commensurate with that value, but if other parties want to overly back end the terms, then we'll hold off on partnering.

  • We are committed to doing the right deal with the right party, not to doing a deal for the sake of announcing a deal.

  • This asset is too valuable to under sell it.

  • Now moving onto REMOXY, on July 23, Pain Therapeutics provided an update on REMOXY, and I'd like to repeat a few of the things that they said.

  • First, they're focused on the NDA resubmission and have substantially completed the transition of REMOXY from their former partner.

  • Second, they've recently assessed the long term stability of REMOXY and found that stability testing at 12 months was within the current preset specifications.

  • Third, they earlier had announced positive top line results of a human abuse potential study with REMOXY.

  • This study demonstrated with statistical significance that both intact and chewed REMOXY were less liked -- that's in quotes -- than immediate-released Oxycodone on two primary end points.

  • The first was drug liking and drug high in nondependent but recreational users.

  • Fourth, Pain Therapeutics stated that their previous partner had reached a written agreement with the FDA on the specific contents of an acceptable NDA resubmission, and that Pain Therapeutics has recently received written confirmation from the FDA that this key regulatory document remains valid and applies to their NDA resubmission of REMOXY.

  • Finally, they reiterated an expectation of resubmitting the NDA in the first quarter of 2016.

  • After resubmission, there should be a six-month FDA review.

  • As such, we look forward to a potential approval of REMOXY in 2016.

  • While there are a number of products in development, to date, no new controlled release abuse to turn oxycodone product has been approved, and the current estimate for resubmission would mean that REMOXY would be eligible for approval in the third quarter of 2016, approximately one year from now.

  • The US sales of OxyContin were about $2.4 billion last year, so it's a very large market opportunity.

  • REMOXY has the opportunity to be a highly-differentiated product.

  • REMOXY takes a straightforward approach to abuse deterrent by not requiring a second agent to be added.

  • It is an oral gel cap that is highly viscous.

  • It isn't just another tablet that may be a bit harder to crush.

  • Even after crushing, REMOXY's viscosity makes it practically impossible to inject through a needle, nor can one physically snort it.

  • If one mixes it with common drinks in an attempt to release the drug more quickly, the oxycodone will not burst out.

  • So we believe REMOXY has the potential to be a best in class product, providing the pain relief you would expect for legitimate chronic pain patients, while deterring multiple common modes of abuse.

  • As a reminder, we have seven patents issued that go out at least until 2031, and we will receive a royalty from 6% to 11.5% of end product sales, so even if the sales ultimately peak in the $300 million to $400 million range out of that $2.4 billion market, our royalty streams would be quite lucrative.

  • I would now like to move to Relday.

  • Zogenix started a multi dose trial in the first quarter 2015, and they expect to have data in the third quarter this year.

  • They have also stated they are targeting an end of phase two meeting by early 2016.

  • This is a milestone for which we receive a payment.

  • Zogenix has stated they intend to seek an ex-US partner.

  • If they do so, DURECT will also receive a portion of what Zogenix receives.

  • With a product like this, once the PK is established, there is no need for a phase two study, so the next step in development would be phase three, which would occur in 2016.

  • We also receive a milestone payment for the start of phase three.

  • Hence, we are looking forward to data from multi dose trial, which is now just a matter of months away.

  • We feel Relday will be a nice product opportunity for treating schizophrenic patients.

  • In the earlier phase one trial, therapeutic plasma levels were achieved on the first day of dosing, followed by controlled release profile over a four-week period.

  • Relday offers a simpler dosing regimen as compared to the current therapies, because the patient would most likely not have to wean off oral medications as they transition on to the long acting injectable.

  • Relday offers a subcutaneous injection rather than an intramuscular.

  • And unlike some leading injectables in this category, with Relday there's no need for reconstitution prior to use.

  • The market research on this product is quite positive and we look forward to more data later this year and potentially having another program in phase three in 2016.

  • The last program we'll review today is our ORADUR-ADHD program.

  • Orient Pharma is our partner for the ORADUR-Methylphenidate product.

  • They have the rights in certain Far East territories, for which we get a royalty, while we have retained the rights for Europe and the United States.

  • Orient Pharma has recently initiated a phase three trial in Taiwan and expect to complete it in 2016.

  • Although the commercial opportunity for us is not that large in Taiwan, we are looking forward to having the phase three data, as these data would derisk the program and make it more attractive for two potential partners in the larger US and European markets.

  • As you may know, Methylphenidate is one of the two main ADHD drugs, and the ADHD market is quite a large one.

  • As a reminder, the ADHD market in the United States was about $9 billion and grew 6% in 2014.

  • Features of our product which we think are nice advantages are its rapid onset of action, its long duration, small capsule size, minimal alcohol dose dumping, and a resistance to physical tampering.

  • A large number of young people in the United States abuse ADHD drugs and 40% of these users snort them.

  • With our technology, that would be impossible.

  • Our market research suggests this would be an attractive product.

  • With that, we would now be happy to take any questions that you may have.

  • Operator

  • Thank you.

  • (Operator Instructions)

  • Our first question is from Annabel Samimy.

  • Annabel Samimy - Analyst

  • Hi.

  • Thanks for taking my question.

  • Several questions on 928.

  • I guess you have now tested it in a number of animal models.

  • I mean, multiple interesting areas.

  • What goes into your decision as to what area you pick?

  • Is it going to be expense related?

  • Is it going to be best efficacy?

  • Is it going to be possibly partner related?

  • How should we think about how you move into the next area of study?

  • Jim Brown - President & CEO

  • That's a very good question, and interestingly, as you look into the seven models there is a commonality to the mode of protection, vis-a-vis how this molecule works.

  • As we look to make a selection, we are certainly -- the process is one by which we work with thought leaders, and because of the unusual nature of discovering a new class of hormones, the thought leaders from around the world are quite excited to work with us.

  • So we have no shortage of people to work with us.

  • But as we look to make our selections for our Phase 2A work and the initial patient populations, we are looking at where we can make, I think, the greatest impact to the patients and that would obviously reflect in the time to market, and obviously then in commercial return.

  • Certainly we are looking very hard at NAFLD and NASH and those areas, but there's also a number of orphan indications, both on the acute side and the chronic side, where we'll be doing some of this work.

  • I know I am not giving specifics now and I won't be able to until we have completed the work in front of us.

  • But I would expect that we would have a couple orphan indications on the chronic and the acute side, and then a couple of big indications as well.

  • Annabel Samimy - Analyst

  • Okay.

  • When you talk about the big indications, how are you able to fund all of these?

  • Can you just give us a sense of what kind of costs are involved?

  • Jim Brown - President & CEO

  • The nice thing is the Phase 2A work does not cost a ton of money.

  • The other side of that is if we wanted to put a partnership in place, there is a lot of interest from the largest pharma companies in the world on this thing because of the unique nature of it all.

  • If we chose to put a partnership in place, I am sure we probably could, but right now, I think we can afford to do the work in front of us.

  • I don't know, Matt, if you want to speak to that.

  • Matt Hogan - CFO

  • I think what we are describing here are a number of different Phase 2A type studies.

  • These are not, you know, huge patient populations.

  • They'll be relatively small.

  • Therefore, they're not that expensive.

  • What we are really looking for are some biomarkers that would suggest utility, so we go from an animal model with utility to showing some effect in humans, before we launch into then much larger, more definitive Phase 2 studies.

  • So therefore, the cost isn't that prohibitive, but we would expect also to do a couple of these, two or three or something like that, next year, not just one.

  • Jim Brown - President & CEO

  • The nice thing about this is it's highly conserved, so we see the same plasma concentrations in humans -- and this was identified initially in human liver cells, but then we developed an assay for it.

  • And whether it's human plasma or in hamsters, mice, rats, monkeys, or dogs, the plasma concentrations in normals are almost the exact same, so it is highly conservative across all these species.

  • Its effects across the various species we tested are actually very similar.

  • Even when you look at this, it seems there is quite a variety of disease states we are testing here, with stroke, and ischemic renal, and acetaminophen toxicity, and endotoxin, or septic shock, and then you look at the various high fat things.

  • But oftentimes these things are associated with lipotoxicity -- if you look at what's going on inside the cell, why the cell dies, it's actually a very similar process, and we are able to protect against that.

  • What we are seeing in the chronic, we are actually seeing in the acute.

  • It is just happening on a cell basis, one cell dying at one moment in time, so you effectively have acute on chronic effect, that in the acute state, you just see in the acute state.

  • If we can see these similar kind of results in humans, see some of these same biomarkers change, we will have dramatic increase in the awareness and the confidence of what this can do, even on the chronic side.

  • Annabel Samimy - Analyst

  • Okay.

  • And just a couple more questions on the areas.

  • You mentioned orphan drugs in large areas, but so far most of the areas that you mentioned or you studied have been pretty large areas.

  • Can you just give us a little bit more idea of the orphan areas?

  • Jim Brown - President & CEO

  • Well, without getting into too much, you can think about things like -- I guess if you follow what Interceptor done, when you look at primary biliary cirrhosis, and a number of orphan indications they're looking at, certainly there a number of lipid storage diseases where we can make a difference.

  • On the acute side, you know, a number of these toxicities, there isn't much out there.

  • Even subcut the population of people having specific types of surgery where you cut off the blood supply, restrict the blood supply, because you are doing some surgery some place in the body that requires that.

  • The kidneys normally see 20% of your blood flow every minute, so just a short period of time can dramatically damage the kidneys.

  • For us to be able to step in there and make a difference -- you would see a difference in just days.

  • I think I stated previously when we talked about the renal model, the person we have done this with has been doing this work for over 30 years, and he said he's never seen results like this, it's better than his positive control.

  • And his positive control was N-acetyl cysteine, the drug they use to treat -- trying to protect kidneys, but they also use it for acetaminophen toxicity in liver.

  • I think we are going to have a great number of orphan indication opportunities both on the acute and the chronic side.

  • Annabel Samimy - Analyst

  • Okay.

  • And if I could just ask one more question on ORADUR, they moved into Phase three data.

  • Does that come with any milestone payments or anything that can generate some value for you?

  • Matt Hogan - CFO

  • No, the gist of the way that deal was structured was they paid for multiple phase one studies, so we could pick the formulation.

  • They're paying for the phase three.

  • They get Taiwan and a few other countries over there, but we retain the US and Europe.

  • And so, in light of that kind of a structure, given that we got to keep the US and Europe and they're paying for all this data, we don't get any milestones in their territory.

  • We are specifically trying to make it clear, we don't think it's a huge commercial opportunity in Taiwan.

  • The benefit to us is getting that data, because if that looks good, it makes the value of the whole program look much more attractive for those bigger markets.

  • For the bigger markets, we don't owe them anything.

  • Annabel Samimy - Analyst

  • Okay.

  • Great.

  • Thank you.

  • Operator

  • Our next question is from Jim Molloy.

  • Jim Molloy - Analyst

  • Hey guys.

  • Thanks for taking the question.

  • I had a quick question on REMOXY -- the refiling here.

  • I know this has been just the longest road on this drug and here we are finally getting close, hopefully, yet again.

  • Can you walk through either any potential thoughts on what PTIE will be doing to make sure this thing gets through this time, and any discussions you may have had with potential partners on this product?

  • Jim Brown - President & CEO

  • Well, the partnership discussions would be all there.

  • We would only be supportive there.

  • That would be their news to talk about.

  • I won't mention anything there.

  • As far as the resubmission itself, you are right, it definitely has been a long road; it's been two complete response letters.

  • With each one, the issues have narrowed and narrowed, further and further.

  • So it is like you are putting closer to a hole, unless you putt like I do and you go 50 feet on the other side.

  • Typically, one gets closer and closer.

  • We are within the hula hoop now around that hole, and literally, if you want to use this analogy too far, I'd say it's a tap in at this point, because they have confirmation that was received from Pfizer as to what they needed to do, and they have done it.

  • They have the one year stability on this formulation.

  • They've got the effective bioequivalence work all done.

  • I think they're in pretty good shape, as close as you can get to feeling very comfortable about a resubmission, this is about as close as you could get to one that should go in and get out the other side.

  • I think we are hopefully going to see REMOXY on the market a year or so from now.

  • Jim Molloy - Analyst

  • That would be great.

  • So it's not a Dustin Johnson type of moment, but best wishes on that.

  • Jim Brown - President & CEO

  • Thanks.

  • Jim Molloy - Analyst

  • Take the analogy one step further.

  • Then any discussions with partners on your other programs?

  • I know you've similarly got some products that should they get closer to the market should draw some interest from larger pharma, any discussions you can talk about how those are doing?

  • Jim Brown - President & CEO

  • I think we are having a lot of really great discussions around POSIDUR, because if you look at the market today, you know, there really isn't -- there is Pacira which is out there.

  • Now by law, the justice department is coming to them telling them you have to say it's a 24 hour product, which we know it was.

  • So now it is, by definition, a 24 hour product, with small surgeries that they have shown effect in against placebo control and that was the bunion and the hemorrhoid.

  • We are going to be out there with shoulder, with hernia, now with gallbladder.

  • We'll have a number of successful trials against bupivacaine hydrochloride.

  • We'll have three full days of pain control.

  • We'll have 60% to 80% reduction in narcotics from the shoulder and the hernia trial.

  • I think we are going to be able to really differentiate ourselves.

  • We know enough drug you need to give, over 600 milligrams, to get it to last for three days.

  • If one looks at anything else out there, there are two other products that are attempting to come into that space.

  • One is with Heron, which is former A.P. Pharma, and the other is Innocoll.

  • Neither are giving enough drug.

  • They're in the 300 range, I think, milligrams, and one's got a combination issue and the other has a substrate that they put into the wound that with gentamicin showed an increased rate of infection.

  • I think we are in pretty good shape, if one stacks up what we have.

  • We'll have something that's put directly into the wound, doesn't require refrigeration, will give three days of delivery.

  • I think we've got a pretty valuable asset.

  • Jim Molloy - Analyst

  • I would agree with that.

  • Thank you guys for taking the call, the questions.

  • Operator

  • Our next question is from Len Yaffe.

  • Len Yaffe - Analyst

  • Thank you very much.

  • As I look at DUR-928, one thing about NASH and acute kidney industry, they're both incredibly unserved major medical needs, where drugs and in the case of AKI bardoxolone have failed.

  • And in NASH it looks like the drugs that Wall Street thought were going to be the successful drugs appear not to be living up to promise, at least in clinical trials, and part of that's injecting my own interpretation.

  • What I see in common between those two diseases is inflammation.

  • Your drug seems to be perfectly positioned in terms of dealing with those.

  • I was wondering if you have done any work in either comparing 928 to the drugs that haven't worked out, i.e., bardoxolone, which had side effect issues but seemed to be effective and perhaps your drug was -- appears to have the same efficacy but without the heart failure side effects?

  • Or on NASH either with the PPARs or anything else where it might be common?

  • And then secondly if you could comment on when you expect to enter human clinicals in the acute kidney injury side.

  • Jim Brown - President & CEO

  • First on the tox, we have not seen any toxicity yet.

  • We haven't done any head to head comparisons but we look at the genes that we influence and genes that some of the products you mentioned influence and it looks as if we are going to have a broader reach.

  • As I said earlier, without the toxicity, even -- whether if you start looking at cardio tox and these kind of things, typically one looks at the canine models for those kind of things.

  • We have dosed, in some of these species, 1,000 times their native concentration of 928, sometimes more than that -- many thousands of times, and seen no changes at all.

  • So far, I am quite impressed with this molecule.

  • But remember that it is something that's naturally within all of us does give me a lot of, you know, strength in feeling like that we're going to find a home for this.

  • We are going to find a dose with which it makes sense, because obviously we produce it every day and we are all living and walking around.

  • As far as picking a Phase two time frame for looking at protecting the kidneys and the like, that's going to be a 2016 event for us and we'll be talking about it near the end of the year.

  • Have to hold off on that.

  • We are working with thought leaders now, some really great people, and we are getting all of their input.

  • Still a little early for us on that.

  • Len Yaffe - Analyst

  • Great.

  • Thank you very much.

  • Jim Brown - President & CEO

  • You're welcome.

  • Operator

  • (Operator Instructions)

  • We are receiving no more questions at this time.

  • I'd like to turn it back to you for closing comments.

  • Jim Brown - President & CEO

  • Thank you all for participating.

  • If you do come up with additional questions after this, please reach out to us.

  • We would be happy to talk to you.

  • Thank you very much.

  • Operator

  • This concludes today's teleconference.

  • You may disconnect your lines at this time and have a wonderful day.