Durect to Rebound from Setback

Durect Corp. (DRRX - Snapshot Report) utilizes 6 proprietary drug delivery technologies to develop pharmaceutical systems that enhance treatment capabilities in the areas of chronic pain, cardiovascular diseases, and central nervous system disorders.

The company recently received disappointing news when its lead pipeline candidate, Remoxy, failed to receive FDA approval in December 2008. While this news is a setback for the company, we believe that the product will ultimately receive approval and should see significant demand due to its ability to reduce the potential of drug abuse / misuse. Meanwhile, we remain optimistic on the remaining candidates in Durect’s pipeline which consists of three candidates in phase II development.

Moreover, we were pleased to hear about Durect’s partnership deal with Alpharma (ALO) for Eladur. In our opinion, the current share price represents an attractive entry point. We thus rate the shares a Buy with a revised price target of $5.

Arpita Dutt, CA contributed to the report.

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