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Durect (Nasdaq: DRRX ) investors just got a painful reminder of what happens when an important drug candidate fails a phase 3 trial.
When post-surgery pain reliever Posidur failed to meet its primary endpoint, shares were promptly slashed by a third. That's life in spec pharma. The trial, named BESST, gave the worst possible results: Posidur failed to show statistical significance in reducing pain. But hey, at least it was shown to be safe!
Durect will huddle up with partner Hospira (NYSE: HSP ) and chat with the FDA, but it's pretty bleak. Although one group reported taking 16% less opioids, it doesn't matter since the drug ended up with a mean reduction in pain scores of just 7%. Ouch!
This isn't the end of the line for Durect. It has two products on the market and its extended-release and abuse-resistant technologies can still be licensed out, but it needs to start winning. Shares have fallen 75% since top drug candidate Remoxy, partnered with Pfizer (NYSE: PFE ) and Pain Therapeutics (Nasdaq: PTIE ) , suffered a huge setback last summer when the FDA rejected it due to manufacturing concerns. Pain Therapeutics said it didn't know whether the irregularities were caused by the actual manufacturing or how the drug was measured in the different lots. Keep in mind this is a drug the trio has been trying to get approved since 2008.
But the FDA isn't against improved painkillers. The month prior and the month after, two similar drugs were approved, one by Johnson & Johnson and another by Pfizer and partner Acura Pharmaceuticals (Nasdaq: ACUR ) , each of which overcame initial setbacks. The troubles with Acura's drug Oxecta were with the formulation, so it's not completely analogous, but hopefully Pfizer's experience in navigating these waters can help speed along Remoxy.
Beyond Remoxy, Durect has two drugs in phase 2 trials, two more in phase 1, and one preclinical candidate. Bottom line, Posidur was the company's nearest-term candidate of moving the needle. Now investors are resting their hats on the ability to get Remoxy's issues finally straightened out and past the FDA along with some compounds that are years away. Today's sell-off is justified as there are probably better places to put your money in the meantime.
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