DURECT Corporation (NASDAQ:DRRX) Q4 2022 Earnings Call Transcript

Keith Lui: Yes, for hospital products like this. And again, we always start with somewhere — on every launch I’ve worked on somewhere between 1,500. And for a hospital-based product like that, I think that range is still applicable.

James Brown: Yes. And for some of the longer-tail things like the codes and the like, we’ve already got the process in motion.

Keith Lui: Yes. Good.

Francois Brisebois: Okay, great. And in terms of awareness for MSLs and whatnot, is age something that liver transplant docs are very much aware of? Or is it something, based on the fact that there’s nothing really that’s been working and the steroids have really been working for a long time, that there’s a lot of education that’s still needed?

James Brown: Maybe, Keith, you can speak, and then Norman can follow up on that because there’s two different perspectives about the same.

Keith Lui: Yes. No, it’s a very good point and one that we certainly took to heart. And actually it’s a great entry point for our new disease awareness site that we actually just launched. It’s called Explore AH epigenetics. And so there is awareness of AH, particularly over the past couple of years. We’ve seen an increase in the incidence of AH. Unfortunately, over the course of the past couple of years with pandemic, so it has become higher on folks’ radar screens for gastros and hepatologists. But the intersection between AH, the current treatment paradigms, which we all think and hepatologists think are subpar and why there’s still a high unmet medical need, the intersection between AH and the role that epigenetics may play is the reason why we developed this educational website.

That’s an unbranded, just purely looking at — again, that intersection of epigenetics and alcohol-associated hepatitis. So I would encourage you and others to that website. But in between now and top line results, and until we actually are able to launch the product, certainly, education around AH and the role that epigenetics may play in that is a high priority for us.

James Brown: Absolutely. And Norman, maybe you can speak to it from the clinician’s perspective and awareness of this molecule?

Norman Sussman: Yes, especially for the patients that get admitted. So for the hospitalized, AH can be a pretty broad spectrum from very mild disease with very low risk to sort of admission level where people come into a hospital and we expect somewhere between a 30% and 50% death rate. For people who work in hospitals, it’s no surprise. It’s completely overwhelmed most transplant hepatology practices and most transplant programs. It sort of displayed so much stuff it’s become — it’s a crisis in many ways. I can’t — having not worked in a community hospital. Most of the people we see with severe AH are transferred from somewhere else. So that sort of second level where you have hospitals that take reasonably high acuity patients that I’m pretty sure those people know because in my practice, I would get called from hospitals, not always gastroenterologist saying, “Hey, I’ve got this patient with AH.” So I think there’s very wide recognition in the hospital practices.

At the — to add to Keith’s comments, in terms of hepatologists, there is — I would be prepared to say there is not a hepatologist in the United States who is unaware of either AH or of this product. It has received extremely, extremely close scrutiny. People are very excited about it. And I hope the results are as good as we expect them to be, but awareness is not going to be a big issue. And to the site that Keith mentioned, it’s really sort of for the next level of people that need to know more about AH. So it’s really designed to spread the word downstream as it were.

Operator: Our next question comes from Kristen Kluska with Cantor Fitzgerald.

Kristen Kluska: And you’re getting very close to that finish line. So the first question I had was what is your understanding on whether or not there are different histopathological phenotypes of these patients? And even if that is indeed the case, would you expect 928 to behave differently across different populations? Or is the mechanism quite broad to address this?

James Brown: Yes, definitely. I’ll let Norman speak to that for sure. But there are maybe some subtle suggestions of certain genetic components with certain populations I saw some one speak once about a population in South America where that’s a possibility. But I think generally, there isn’t much known. But Norman, what do you think?

Norman Sussman: Yes. The histopathological diagnosis has more or less — well, you know this from our previous discussion. In the U.S. practicing, no one biopsy these patients. Some people actually including the object to the term of this biopsy proven. It’s really just — there is a constellation of findings. There’s no classic histologic finding that defines AH. It usually shows a number of features. It’s a mixed number. And the diagnosis in, I would guess, 95% or more of cases is clinical. The prognostic value of the biopsy, there have been a few papers that refer to it, but my opinion and the opinion of several of my senior colleagues is that the biopsy gives very little additional prognostic or diagnostic value. And that the last — it’s somewhat — there are people who really believe the biopsy shows some value. And I don’t mean to those people’s opinions, but a lot of people do not think that the biopsy adds much in any regard.

Kristen Kluska: Okay. Can you remind us what you’ve shared publicly related to the powering that way into this trial? And what’s your latest understanding or expectation on how the placebo arm would behave in light of published findings and natural history around this 90-day point? It sounds like you’re citing about 30% mortality at this time?

Norman Sussman: Yes, we are. But I think.

James Brown: Go ahead.

Norman Sussman: Okay. So it’s a blinded study. So we don’t know which — who’s falling into what group. But our endpoint — observed endpoints are very close to our projected endpoints that the statistician and I and several other people at DURECT worked on prior to coming up with a final protocol. So we’re more or less on track.

James Brown: You’re referring to this very surprising paper that was published on surprisingly low mortality, but that is a historic low and no other papers have not demonstrated that number. And for sure, our event rate is well above that.

Kristen Kluska: Okay. And then outside of the primary endpoint 90-day mortality or liver transplant, can you remind us some of the key secondary outcome measures you’re going to be looking at as well? And whether you’re looking at different markers, cell counts or other factors that are going to help you understand the contribution to liver injury?

Norman Sussman: So we have a lot of second endpoints. The two most promines are looking at 28-day outcomes for both mortality. So we have in the hierarchical transplant events, meaning transplant or death, followed by death, followed by 28-day transplant or death, followed by a 28-day mortality. And then a variety of biomarkers that, I can’t remember all of it off the top of my head, the things like Lille score MELD progression. And then we’ll also stratify by enrollment MELD.

Operator: . Our next question comes from Ed Arce with H.C. Wainright.

Antonio Arce: Let me add my congrats on the continued progress and staying on track. I wanted to ask a couple of questions around that pace, just to make sure that come June 30, we’ve reached full enrollment. First, just looking at the pace given over 200 patients were enrolled on the November 2 update, and you now have over 260 as of today. So over the last 4 months, that comes out to about 15 patients a month. And I’m just wondering if that’s a fair way of thinking about the progression? That would indeed, from the current point, get you to the target of 300 by the end of June. And then the second question, just again, along with time lines, but also the activities that are involved. From the point of last patient last dose, if a second dose is necessary for that last patient to the data readout, what activities are involved in the process of those number of months?

James Brown: Sure. First off, yes, your calculation, I think, is fine. It’s — in my — from my — where I sit, probably a bit on the pessimistic side. I certainly hope we’ll do better than just barely squeaking in. But the team is doing a great job of enrolling. And whenever that last patient, last visit occurs, and it actually isn’t from the last dose, it’s from — when they were enrolled in the study. Day 1, they get the first dose. That’s when the 90-day clock starts. And so from that last patient dosed, one can count forward 90 days. Then — and as even now, we are doing real-time cleanup. And Norman can give us a specific number, but it’s a very high percentage already of the data that we’re looking to clean up. And that’s a constant process with any clinical trial.

To the extent that you can, you’d like to, in real-time, keep the data as — for each of the patients as well organized and query anything that needs to be queried and kind of iron out any discrepancies or any data points that are missing and the like. And — so let’s just say we have north of 80% of that wrapped up or in hand by the time they get last patient last visit, then you’ve got another — the team feels very optimistic. They feel, 2. I’m kind of saying probably closer to 3, but it will be in that 2- to 3-month time frame. — that we will continue to clean up the data until we get to the point where we feel comfortable enough that we want to go hands and pencils down, and we’re going to have data lock. And at that point, within just a very short time within just a few days, we’ll have the — we’ll have the information, and we’ll have the data that we look forward to announcing.

So it will come pretty quickly, and it’s really just a matter of cleaning up the data to make sure — because once you lock the database, it’s really difficult and you should never actually go back. If you want to use it as a pivotal trial, you’ve got to be really done when you lock it. And so that’s the most critical piece actually in those last few months where you’re going through and making sure that you’ve got everything well understood and well in hand. Norman?