Stifel upgraded Durect (NASDAQ:DRRX) to “buy” from “hold” and raised its price target to $3 from $1.25 and also transitioned coverage to Adam Walsh from Annabel Samimy. The stock closed at $1.59 on July 11.
Mr. Walsh writes that Durect appears poised for upside over the next 12-to-18 months. “We expect Posimir to remain in focus near-term ahead of upcoming pivotal Phase 3 PERSIST results due in the fourth quarter this year and potential approval/launch as soon as the second half of 2018,” he added.
Posimir is a non-opioid analgesic designed to provide three days of local pain relief following one-time intra-incisional instillation at the close of surgery.
“We are optimistic on the potential for a positive outcome in PERSIST based on our analysis of results from the prior BESST trial,” Mr. Walsh said. He also likes a recent Sandoz deal for U.S. rights to the drug, as it brings, among other things, a potential steady source of future milestone/royalty revenue that can be leveraged to support an ambitious development program for key emerging pipeline asset, DUR-928.
Mr. Walsh said he is encouraged by recent Phase 1b data in NASH patients, which showed that single dose of DUR-928 produced rapid and meaningful improvements in several key biomarkers of liver disease just 12 hours after dosing.
In addition, he expects results from three planned Phase 2 trials in primary sclerosing cholangitis, acute organ injury and psoriasis to “mature” in the second half of 2018. “A positive outcome in any of these indications could prove transformative for the company.”
