DURECT Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2023

There are 10 speakers on the call.

Operator

And welcome to the DURECT Corporation First Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tim Papp, Chief Financial Officer.

Speaker 1

Good afternoon, and welcome to DURECT Corporation's Q1 2023 earnings conference call. This is Tim Papp, Chief Financial Officer of DURECT. Before we begin, 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 for projected financial results. These forward looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such Further information regarding these and other risks can be found in our SEC filings, including our 10 ks and 10 Qs Under the heading Risk Factors.

Speaker 1

To begin, I would like to review our Q1 2023 financial results. Our total revenues in the Q1 were $2,100,000 compared to $1,900,000 for the prior year. This increase was due primarily to an increase in collaborative R and D revenue. R and D expense was 8 point $6,000,000 for the Q1 compared with $8,200,000 for the prior year. The increases were primarily due to higher clinical trial expenses for our ongoing were $4,100,000 compared with $3,700,000 for the prior year.

Speaker 1

This increase was primarily due to higher market research expenses, higher audit related expenses as well as higher employee expenses. As of March 31, 2023, we had Cash and investments of $44,400,000 as compared to $43,600,000 at December 31, 2022. We completed a registered direct offering in February 2023, raising $8,800,000 in net proceeds. Excluding the proceeds from the financing, our cash burn in the Q1 was approximately $8,000,000 We believe our cash on hand is sufficient to fund operations into the Q1 of 2024. Lastly, I would like to highlight that we will be hosting a KOL event in New York City on May 16.

Speaker 1

We are pleased to be hosting Doctor. Paul Gaglio from the Columbia University Department of Medicine And Doctor. Brett Fortune from the Albert Einstein College of Medicine, Department of Medicine and Division of Hepatology. Doctor. Gaglio and Doctor.

Speaker 1

Fortune are both renowned hepatologists with a wealth of experience treating alcohol associated hepatitis or Ah. We look forward to hearing our insights about the current treatment paradigm for Ah and the unmet medical need in this highly lethal disease. Several members of our leadership team will join Doctors Gaglio and Fortune to discuss the ongoing development and commercial landscape for larsutasterol in Ah in advance of the top line readout from Affirm. You can find the details for the webcast of the event in our press release from April 27 on our website. Now, I would like to turn the call over to our CEO, Jim Brown, for an update on certain of our programs.

Speaker 2

Thank you, Tim. Hello, everyone. Thank you for joining us today for our Q1 2023 update. We're excited about the continued progress for our lead clinical program, oresucosterol for the treatment of alcohol associated hepatitis. 2023 is poised to be a significant year for DIRECT as we look forward to completing our Affirm trial and reporting top line data by the end of the year.

Speaker 2

If successful, we believe Affirm has the potential to support an NDA filing. Our primary focus as a company remained gaining approval for lasecoasterol in Ah and bringing this potentially life saving therapeutic to patients with no effective treatment options today. We are nearing our enrollment target of 300 patients in our Phase 2b AFFIRM trial with more than 285 patients dosed to date. We continue to expect completion of enrollment by the end of this quarter. As a reminder, Affirm is a 300 patient placebo controlled double blind Multinational study with 2 active dosing arms and a placebo arm of 100 patients each.

Speaker 2

We're enrolling patients with severe Ah, which are patients with MELD scores ranging from 21 to 30 and MADRI discriminative function scores greater than or equal to 32. The primary endpoint for Affirm is reduction in mortality or liver transplant at 90 days. We've enrolled patients in Affirm through a global network of clinical sites, including leading hospitals in the U. S, Australia, EU and the U. K.

Speaker 2

Our sites include renowned liver centers and we are working with some of the world's preeminent thought leaders in Ah. The FDA has granted our Larcicosterol Ah program fast track designation, and we are hopeful that a positive result in Affirm could support an NDA filing. With this in mind, Larcico Sero has the potential to be the 1st FDA approved treatment for Ah where there is a substantial unmet need for these patients. We designed AFIRM to be a potentially pivotal trial based on our Phase 2a data. In our open label Phase 2a trial, all 19 patients survived the 28 days, an encouraging result giving that approximately 26% of hospitalized Ah patients die within 28 days based on historical data.

Speaker 2

In April, we announced that our Phase 2a data had been published online by the American Journal of Gastroenterology. This peer reviewed article includes Cross study comparisons with well matched severe Ah patients from a contemporaneous trial conducted by the DEFEAT Alcohol or DASH consortium. While the sample sizes were small and these patients were not part of a control study, These comparisons indicate that severe Ah patients treated with either 30 milligrams or 90 milligrams of Loxecosteirostel has statistically significantly lower Lille scores compared to the patients treated with the standard of care, including steroids. In addition, liver enzyme levels decreased rapidly in the larcicosterol treated patients, including statistically significant reductions in ALT. We believe these results provide further evidence of the potential for lasecoasterol as a treatment for Ah.

Speaker 2

Our confidence that the AFFIRM trial will be successful is driven by Our compelling Phase 2a study data, including the recently published comparisons, the mechanism of action of Luxyposterol, which ties directly into the biology of and our multiple preclinical animal studies where we observed the profound survival benefit in multiple relevant acute organ injury models. I'd like to briefly turn to the market opportunity for Ah. In addition to this high mortality rate, Ah represents A significant cost to the U. S. Healthcare system with over 150,000 hospital adjacencies attributed to Ah at a cost of between $50,000 to $150,000 each.

Speaker 2

As a result, Osequosterol represents a potential multibillion dollar opportunity in the United States alone and could simultaneously provide substantial overall cost savings to the healthcare system. We will discuss the economic opportunity for La Cucosterol further during our upcoming KOL event. We've begun to lay the groundwork for potentially commercializing VASIKO Sterile in the U. S. And believe we can effectively launch the product through through sized hospital focused sales force.

Speaker 2

We are also continuing to build awareness around the role of epigenetic regulators in acute diseases like Ah. Ah is also a global concern, allowing Varsiqua Sterile the potential to serve ex U. S. Ah patients and their healthcare systems. These ex markets represent additional attractive market opportunities.

Speaker 2

Because we enroll patients from a global site network, We believe a positive result from Affirm may support regulatory filings in the EMA and other regions. In summary, we continue to make great strides with AFFIRM and have enrolled more than 285 patients to date. We are on track to complete dosing the last patient in the AFFIRM trial this quarter, which would enable reporting of top line results in the second half of this year. If successful, we believe Affirm has the potential to support an NDA filing. With that, we'd now like to take any questions you may have.

Operator

Thank you. We will now be conducting a question and answer session. It may be necessary to pick up your hands up before pressing the star Thank you. Our first question is from Kristen Kluszka with Cantor Fitzgerald. Please proceed with your questions.

Speaker 3

Hi, good afternoon, everybody. Thanks so much for taking my questions. The first one I had is if you could break down for us this $50,000 to $100,000 Costs that you cited in your prepared remarks, I guess how much of this is just driven by the fact that patients are often in the hospital for Couple of days. And obviously, I respect and understand the 90 day endpoint related to the FDA. But Time to hospital, especially because in the 2A, a number of your patients didn't even need that second dose.

Speaker 3

I guess like how important are those statistics Going to be for payer conversations, should this drug be successful?

Speaker 2

Great question, Christian. Thank you. And It's good to hear from you. I'll start it and then I'd like Keith to maybe speak a little further on this issue as well. I think we've seen From most of the literature that I've seen is your typical patient stay in the hospitals around 6 days for those that live and longer for those that don't.

Speaker 2

And for those that live, it's about a $50,000 cost. For those that die in the hospital, it's $150,000 and then good the majority of patients, if they're going to pass away actually, They moved the Malibu Hospital to Hospice Care. But Keith, do you want to maybe speak some to the pharmacoeconomic drivers vis a vis hospitalization costs?

Speaker 4

Sure. Thanks for the question, Kristen. I think it's a good observation. I mean, the folks that are driving the higher end of that $150,000 costs, Of course, are the ones that unfortunately expire and die while in hospital. This is taken from the HCUP NIS dataset.

Speaker 4

And our belief and we're doing continued research in this is that those are the patients that Unfortunately, take up the most amount of healthcare utilization as far as diagnostics, more intensive care unit time in hospital, length of stay, And you had cited our Phase 2a study that showed that 2 thirds of these severe Only required one dose. However, that may be different in the AFFIRM trial. So we'll be interpreting all of those results, length of stay, Time in ICU, time is a step down unit, overall length of stay, and all of that will be important as we put together

Speaker 5

Thank you.

Speaker 3

Appreciate your thoughts there. And a question we've been getting is just why do you believe that other mechanisms have failed in this space? And what is it about ORTUGOSTERIAL's mechanism that might be more appropriate in the setting, especially with That's recent paper and some of the deeper diligence you've conducted.

Speaker 2

That's a great question as well. And I'll address it and then we'll see if we have some more because we have both Weiqi and Norman on the line as well. I think first off, it's a complex disease. Ah, Unfortunately, it leads to the breakdown of a number of systems. These patients are eventually dying of multi organ failure.

Speaker 2

So it's not just Eventually, most of them die actually from kidney disease. And we've shown with larcuchosterol that we protect against multi organ failure, to protect the kidneys, the liver, the lungs and numerous models. And we've shown shoring up as it were in protection of these organisms and humans who have chronic kidney disease or chronic liver disease when we've dosed and seen reductions in the statocaritin18, these markers are cell death. If we look at drugs that have been tested against Ah in the past, there have been 2 main areas Focus and one was in trying to reduce apoptosis and a couple of drugs have been tested there and unfortunately Didn't work. And then there's also been drugs looking to block certain cascade of the inflammatory system with monoclonal antibodies, and those also were more one note and really couldn't address the breadth of the disease.

Speaker 2

With our sucral, we have a molecule that changes what we know has gone wrong. We know that there are elevations in DNNT or DNA methyltransferase levels in these patients. And so we know, transferase levels in these patients. And so we know from patient data that there is hypermethylation ongoing and we know A host of different systems within the cells are damaged. We know larcicocele protects against mitochondrial membrane Damage and so we've got that component up.

Speaker 2

We know it reduces lipotoxicity, reduces inflammation, enhances cell survival and regeneration of the cells, increases autophagy. There's just a host of different components that are that have gone wrong that are addressed. But maybe I'd give it to maybe Wei Tiu can start and then Norman maybe finish on this as well. Any additional thoughts?

Speaker 5

No, I think Jim, you have covered quite well. I would also just add one more thing because alcohol, Particularly in alcohol associated hepatitis subjects, they do have impaired liver Regeneration. So liver regeneration is very important in overcoming the acute liver injury And then resulting acute liver failure. So, LASIKO SERAL certainly promoting the liver regeneration. That's also Important.

Speaker 5

Jim just mentioned that a little bit as well.

Speaker 2

Thank you. And Norman?

Speaker 6

Yes. I have too much to add to it. I was very impressed with the mitochondrial stabilization because Mitochondrial dysfunction is a big part of the apoptosis pathway. So I thought that was important. And the steroids affect inflammation, but they also probably interfere with liver regeneration as Wei Chi pointed out.

Speaker 6

You need sort of this Broad improvement without inhibiting the liver regeneration in order to recover from this. So I feel as if prior treatments have addressed one thing at a time and what you need is something much, much broader than that. And the mechanism of action is really impressive, but even more impressive is the empiric data

Speaker 2

Great. Well, thank you both. Yes, I think it is interesting when you see the histology of these patients, They aren't often biopsy, but sometimes they are. You do see mega mitochondria, so you know that there's a stress in that organelle anyway.

Speaker 3

Okay, thanks. And then for the second half of the year readout, just because we're getting really close now, do you anticipate that you would Share certain endpoints first through a press release and then maybe save more detailed data for a medical Presentation, what are your kind of preliminary thoughts on this assuming that this plan goes to place with timing?

Speaker 2

Yes. It will depend on the timing. But this is too important to wait and we wouldn't. So When we have the last patient enrolled, which we're getting close, obviously, we know we're now over 285. So we just have just a few patients to go, a dozen or so left.

Speaker 2

And so, when we enroll that last patient, we will announce that and then people can start to count down. So they'll know it'll be 3 months And Norman and the team have done a great job of keeping up with the patients As we've gone, so we've been closing out centers as we can and closing out patients as we can. And so our hope is that we'll just have those last 10 or so patients to clean up as we get to the last few months. So the team is hoping to have data within 2 months or so after last patient, last visit. That would be wonderful.

Speaker 2

Happy whenever it comes. But when that day comes when we unblind the trial, We hope to report out with just a few days. And so that would be our objective. I'm sure we'll have a press release and Sure, conference call. I don't know about the timing of that versus meetings.

Speaker 2

We certainly wouldn't hold anything back at that point. I think we'll talk about it. And then eventually, we'll present the data in more in a broader fashion through publication and through meetings. But Norman, do you want to add anything to that?

Speaker 6

Yes, I think that's correct, Jim. Clearly, we're as excited as anyone to unblind and see what the top line data on, the most important And then decide on a publication and presentation strategy.

Speaker 3

Great. Thanks. Look forward to seeing you in New York next week.

Speaker 2

Yes, absolutely. That's right. Thank you for reminding me. Yes, we do have Our KOL event next Tuesday in New York. So happy to have you guys over and if not online, it would be great.

Operator

Thank you. Our next question is from Ed Arce with H. C. Wainwright. Please proceed with your question.

Speaker 7

Hi, Jim. Hi, everyone.

Speaker 8

Hey, Ed. Thanks for

Speaker 7

taking my questions. It was great to see you last week and I Also look forward to seeing you next week at your event. Beyond the timing of Important as investors start sharpening their pencils on this readout is to just go over and explain why there were actually There are 2 dose arms in this study. And ultimately, If both are positive and both are powered for statistical significance, You would seek to get both of them on the label. And then separately, the other question I had was just around Commercialization, given that this is potentially a pivotal study and you could be looking at You know, an approval in the not too distant future.

Speaker 7

We just wanted to get your thoughts on The hospitalization sales force, the MSL sales force, how you expect that to unroll given that there is a fairly concentrated targeted set of call points. Thanks so much.

Speaker 2

Okay. Sure, Ed. And I'll start off and then I'll let Wei Chi speak to a little more to the doses, And then we'll certainly have Keith speak to the commercialization post that. So with regard to the doses, we are looking at at 2 different doses, which allows us to gain a little more insights. And Basically, we've seen pretty exciting results already in the Phase IIa with both of these doses and we've seen in various other human experiences a variety of doses tested And oftentimes, the low dose looks every bit good, if not better than the higher, and that's also been the case in some of the non clinical.

Speaker 2

So it's So we certainly are excited to see what will come from this. But as far as dosing, Weiqi, any additional thoughts there?

Speaker 5

Yes. Those two doses were selected based on our understanding of the dose response relationship in various mechanistic studies and also based on the ADME data in both in animals and in human. And on top of that, it was based on the PK data we obtained through the Phase to a study. So that's how we determine these 2 doses Should be in the optimum dose range of the drug exposure to the liver because It's specifically liver centric disease. So that's how we selected these two doses.

Speaker 5

Although we know That 150 milligram dose, that's the one we also used in the Phase IIa study, that's the highest dose, is also Phase in this subject. Nevertheless, 30 90 milligram we selected moving to Phase 2b are other, we believe are the

Speaker 2

Yes. I think that's a good point from a safety standpoint. In the NASH patients, we dosed for a month, 600 milligrams as high as 600 milligrams a day. So we certainly have given a huge amount more than these doses and for a much more for extended period of time. So maybe then I'll hand over the commercialization question to Keith, who For those of you who don't know, he has a tremendous commercial experience, in particular of late, before coming to direct at both Genentech and Pharmacyclics, Sold a number of oncology products and has dealt with lethal diseases before.

Speaker 2

So we're excited For Keith and his team to take this on.

Speaker 4

Yes. Thanks, Jim. On Ed, your question of Potential hospitalization sales force, we have been doing some preliminary work on just understanding the hepatology and gastroenterology And the various hospitals and their discharge volumes in Ah, working with big data houses that are well known like But we know that there is a rough population of heps and gastros and Advanced practice providers in the U. S. Of about 5000 to 6000.

Speaker 4

We know there's around 4000 hospital But only about half of those have had Ah discharges of over 10 per year. So we're starting to get down through the funnel on what that concentrated target list may look like, But we're still pretty early in the analysis. I think we've talked about on previous calls, a sales force I think would be ample to cover the United States for a rare disease, hospital based disease like Ah. And we continue to work through on pace of what our commercial planning looks like. We'll talk a little bit more about that At next Tuesday's KOL event as well.

Speaker 4

But we do have a pretty good understanding of where the targets may be and where those high volume tertiary And start to think about tiering structures and how that might influence the construction of a Field sales force and commercial organization would look like.

Speaker 7

Great, Keith. Thanks for that. I appreciate it. I look Forward to more details on Tuesday. One additional question, if I may, is just around the primary endpoint, obviously, 90 day mortality and reduction in transplant.

Speaker 7

We know as you mentioned, Jim, that Ah Natural History is About 26% mortality rate at 28 days. Do you have Any measures forward for the rate of transplants for Ah patients?

Speaker 2

Great question and I'll let Norman speak to it a little bit after I'm done. Unfortunately, they're just the bottom line is there aren't enough livers to go around. There are about 9,000 livers available for transplant in the United States across the entire country. We know there are 150,000 hospitalizations in 2020 for Ah. And we estimate that about 120,000 patients represent those 150,000 hospitalizations with some coming back again.

Speaker 2

120,000 patients, 9,000 transplants. Well, they don't all go to Ah. In fact, it's estimated that about half of those 9,000 Planted livers go to people with alcohol associated liver disease. The other half go to people who remaining viral Patients and inherited diseases like Wilson's and PSC and some obviously to NASH patients as well. So you've got about half of those, about 4,500 going to patients with alcohol associated liver disease.

Speaker 2

And Somewhere between a half and a third of that remaining then 4,500 go to Ah patients, which means you're talking about Somewhere around 2,000 patients being having livers available for them out of 120,000. So it's just that the numbers aren't there. And I know no one can speak much more eloquently than I can with regard to this.

Speaker 6

I don't know about eloquently, but That is as you know, it's a moving target because transplanting people for is a fairly recent development and is sort of gaining in popularity. And Previously, people didn't want to admit they were transplanting them because there was sort of this general feeling that you needed 6 months of sobriety. And so There was a tremendous under reporting and that was shown in a very nice paper by Brian Lee. Since then, There's been general acceptance that's growing. Actually, Munoz has now created a special category for alcohol So we'll give more accurate numbers going forward.

Speaker 6

But for right now, we don't know that exact number. And as Jim said, we think I think speaking to my colleagues, it's approximately a third to a half of the people attributed to alcohol And alcohol makes up about half of the transplant volume of that 9,000 patients that are transplanted. So And then getting to the endpoint, it does obscure. So the 26% 30% you mentioned is sort of an all comers. So if you just take a general population of Ah, you should expect a 30% And that's been shown in multiple studies.

Speaker 6

But when you deal with a transplant center, they tend to see people in the higher And so the mortality of patients with a MELD of say 25 is more like 40%. And so you see higher mortality as you go up as your admission meld score goes up.

Speaker 2

Yes. I would add also from a pharmacoeconomic standpoint, so If we take a rough guesstimate of the number Norma just gave us, say it's close to $2,000 We know transplants can cost Close to $1,000,000 each. So you're talking about somewhere in the range of about a $2,000,000,000 check that's being written for that piece. And And the other component, the hospitalization, we think represents probably $7,000,000,000 to maybe $8,000,000,000 as well. So it's a substantial cost

Operator

Thank you. Our next question is from Francois Brisebois with Oppenheimer. Please proceed with your question.

Speaker 2

All right.

Speaker 9

Thanks for taking the question. Just a couple here. Just in terms of the inclusion criteria, just to touch on the MELD score and the severity, can you remind us the Difference between the Phase IIa and the Phase IIb in terms of severity of patients and also From the cross comparisons, either with Louisville or DASH, can you also touch on the severity of those patients? And I guess the implications of the changes in severity in the Phase 2b. Thank you.

Speaker 9

Yes. Sure. And

Speaker 2

To straight up, we are taking severe patients. So these are patients in the AFFIRM trial that they range and meld from a 21 to 30, which match exactly with the severe patients we had in our Phase IIa trial. And to put that into some perspective, Got IMEELVA 21, you've got about a 20 I'd say 25%, 26%, maybe to 30% chance of dying in the next 90 days. And if you go to Imelda 30, it's 60%. And as it almost says in the mid range, 24% to 25%, it's 40%.

Speaker 2

And so it's obviously a huge problem. And as far as the consortium goes, what we tried to do It's picked patients who would have matched for our study. That was the objective there to get like and like. And then we had to have patients who We're doing a 28 day comparison, so they had to be alive at 28 days. So we had to not count the DASH patients that died, and there were a number that unfortunately Died before 28 days that aren't counted in there because they don't have 28 day enzyme data or score data at all.

Speaker 2

What we saw was their survivors versus ours and all of ours survived. We still saw, to my eye, improvements in liver function and the like that looked Like we had patients who were in a better space. I don't know, Norman or Wei Chi, you've got anything to add?

Speaker 6

I think that accurately states it. When you look at the paper, remember that The patients in the DASH trial, the subjects in the DASH consortium had to survive at 28 days. So any patients Who died prior to that were censored out of it. And even with that, you still see tremendous you see better survival. And you but What was really impressive is how much their biochemistry was better, including their markers of liver injury, Bilirubin and Melisko is well, Melisko is it's a bit more complicated.

Speaker 6

But So, Bet Survival and bilirubin were significantly better.

Speaker 9

Great. Thank you. And if I could just ask one last one. So in terms of as the comment to the previous answer about the doses used, Is it fair to assume you don't necessarily expect a dose response here, correct?

Speaker 2

We might I mean, we're doing the study in order to determine that. We couldn't say enough we couldn't get enough information out of the small number of patients in the Phase 2a. So we're doing this trial to understand dose. And I certainly hope we can distinguish between the 2 doses, but I think it remains to be seen. I don't know, Weiqi, what would you say

Speaker 5

Actually, I think that's what Jim you answered probably, so right. Well, we'll have to see that Please do, please.

Speaker 2

Yes. We just don't know.

Speaker 5

Yes.

Speaker 2

Understood. All right. I'd be happy if either one wins, I'm really So I'll take either one or

Speaker 5

both. Yes.

Speaker 4

Fair. Thank you.

Operator

Thank you. Our next question is from Sean Kim with JonesTrace. Please proceed with your question.

Speaker 8

Hi, everyone. Thank you for taking my questions. Hi. I just have a few questions on 1 on science and couple on commercial. So I guess my first question is Based on your further analysis of the Phase IIa study, just curious to hear your thoughts around some patients requiring second dose of large scale sterile to see if there was any differences in terms of Demographic characteristics of these patients or the ultimate clinical outcomes versus those who received only 1 dose?

Speaker 8

And kind of tying that into the commercial. As you think about potentially commercializing the product, your thoughts around

Speaker 2

Sure. I'll Take it first and certainly ask Weichie to comment as well and then obviously Keith on the second. I I think the first thing is important to note that just that we didn't have very many second doses, even in the severe patients, just a small number. And because it was the first testing of this drug in Ah patients, I think early on, We had some physicians who were keeping their patients in the hospital to enable a second dose, just thinking they want to give the Drug its best chance, not really kind of considering the way it works. Outside of oncology, it's the first Epigenetic modulator to be being developed in medicine.

Speaker 2

And so the whole concept that only a single dose Might reset my epigenome and allow my organs to improve is a very different way of The way I think about it for what it's worth, I think about it, it's a bit like a heart attack for the liver. You've got a liver under change set stress, but If one can get it over that acute stress circumstance, the liver does have great regenerative capacity and this drug aids in that regard. So I think it's all about shoring it up, shoring the other organ depth, so nobody can begin to repair itself. But, Wei Chi, what are your thoughts

Speaker 5

Yes. Just like Jim mentioned that epigenetic modulation Typically, as we know that the effect is relatively long lasting, especially for The NMT1 inhibition effect theoretically would be even longer lasting than The NMT IIIA and IIIB inhibition, so meloxicosteroid inhibits all 3. So The effect we expect will be relatively longer lasting than anti inflammatory agents or anti Just asking, agents are just simply promoting the liver regeneration. Now, talking about the liver regeneration, Another factor with 1 or 2 doses is the liver is a very unique organ it can regenerate. So otherwise, once you have the liver to overcome the acute episode, They would regenerate and then hopefully would recover the acute episode.

Speaker 5

These are the reasons Why we only selected 1 or 2 doses for this particular indication?

Speaker 2

Thank you, Weiqi. And now Keith, maybe some thoughts around the 1 or 2 doses and commercialization. I know at this point, But we're a ways away from pricing, but maybe you can just give us some general thoughts.

Speaker 4

Yes, sure. It's a good question. I would say at this point, I would Corroborate what Jim was saying, it's probably too early to say, although in our Market Access strategy meetings, this is certainly a topic of discussion. Obviously, the final decision is going to be influenced heavily by the Affirm results and looking at the cohort of patients and their that had 1 or 2 doses, but having run a similar analysis on previous drugs, pre launch drugs that I've worked on, I will say that it is challenging for pricing on a per treatment course basis as opposed to on a per dose basis. You run into various issues like ASP, best pricing and what have you, government discounts and the like.

Speaker 4

So, while we have not made any kind of determined decisions on that, it is something that, will take into affect the Affirm results, and that will strongly have a heavy influence like I said on how we think about overall pricing and on a per treatment course versus per dose pricing arrangement.

Speaker 8

Okay. That's helpful. Thank you. And just one more question on potential commercial side. So I guess you mentioned about 5 6000 hepatologists and gastroes.

Speaker 8

Just wondering how many of those doctors are currently aware Of large costerol and epigene regulator program in general and how much effort you'd be needed to bringing these physicians up to date on large cost of sterile?

Speaker 2

That's a great question. And I think I'd let Norman start and then I'll let Keith finish because I think that might have followed in perspective. So I'd love to hear this one. So Norman?

Speaker 6

Right. Steve actually has data. So I'm just going to say that among my colleagues, I sort of have lived in the academic hepatology world, which is a loose term for saying transplant centers. And among those colleagues, there is practically uniform knowledge of this trial. Keith has done a much more thorough job of looking at people sort of in what I would not meaning to sound pejorative, but in sort of the next year.

Speaker 6

And so Keith, I would like you to take it from there.

Speaker 4

Yes. We've conducted some market research in the U. S. Looking at unaided recall of various products in Ah and obviously there aren't too many that are under development and certainly the larcenycoasterial program is furthest along in 2b development. But I would corroborate what Norman was saying.

Speaker 4

In those hospitals that are typically transplant centers or academic Referral centers with multiple, hep and gastro specialists that have a particular interest in alcohol, I think the Recall or the knowledge of our trial and Luxucasterel is high. However, when you look at the entire population of about 5000 to 6000 that I quoted earlier, That's inclusive of anybody because this is not a disease that is typically referred to only a handful of sites Only a handful of sites have Ah specialists. If any hepatologists or gastroenterologists, they would have the training to treat Ah. And so it is fairly spread out to our knowledge right now. And when you get out of those tertiary care centers

Speaker 1

and specialty sites that are still seeing

Speaker 4

Ah patients, the recall is going to be a sites that are still seeing Ah patients, the recall is going to be a little bit lower, but therein lies the commercial opportunity and while we're trying to understand what the baseline of that now, particularly that's not too surprising given that there's nothing Approved for Ah and having worked in disease areas that have had little or no standard of care and other fatal diseases Like in oncology, hematology, there's a lot there may be a number of things under development, but until you hit a Randomized controlled clinical trial study endpoint, that doesn't really raise the flag for most people to start paying attention. I think if a firm hits, later this year, as we've talked We certainly will have a big flag to raise with that whole population of pets and gastros and events practice providers and bring a lot of value to patients and to the aged community.

Speaker 8

Great. Thank you very much.

Operator

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Jim Brown for any closing comments.

Speaker 2

Okay. I just want to thank you all for participating today. And as always, if you have any further questions, please follow-up. And we look forward to seeing hopefully a number of you in New York next Tuesday. Take care.

Speaker 2

See you soon. Bye.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
DURECT Q1 2023
00:00 / 00:00