RespireRx Pharmaceuticals Inc (RSPI)

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OT - Aiming, Here's a little more on Durect. In addition to their partnership with PTIE/King for Remoxy and other abuse resistant opioids (Remoxy in Phase 3, and 2nd one in Phase 1), their lead in-house program is for a longer lasting version of Bupivacaine, the commonly used surgical anesthetic. Durect's technology allows the anesthetic effect at the surgical site to last for 2-3 days, which greatly reduces the need for post-surgical opioid pain meds and their associated side effects, as well as greatly reducing the need for post operative attention from the surgeon and hospital staff. Surgeons on call are going to love this product since they'll get a lot fewer late night calls due to post-op pain. Not having to use post-op opioid pain meds is another big plus, since these have side effects of their own like respiratory depression (which increases the risks of the patient contracting pneumonia), plus the opioid's actions also make it considerably more difficult to detect various surgical complications early, before they become serious. There's a good chance that Durect's long acting Bupivicaine ("Posidur") could become the standard anesthetic for many surgical procedures (company market analysis estimates 30 mil procedures/year). Durect also has several other proprietary drug delivery systems. Either Remoxy or Posidur alone could make the company a great investment, and both programs look like big winners (IMO) -

>>> Durect's Pain-Free Deal
http://www.fool.com/news/mft/2006/mft06113022.htm

By Brian Lawler
11/30/2006

Sometimes it takes a big partnership deal for investors to get excited over a pharmaceutical company. A deal signed yesterday by drug developer Durect(Nasdaq: DRRX) appears to have done the trick for the small specialty pharma, since shares rose more than 25% today.

The deal Durect inked yesterday with European pharma Nycomed involves its Posidur local anesthesia injection. The drug is in multiple phase 2 trials as a treatment for post-operative pain and is slated to enter phase 3 trials in 2007. If it can achieve regulatory approval, Posidur's biggest potential benefit over other local anesthetics already on the market is its longer-lasting effect.

This deal with Nycomed provides for up to $188 million in payments to Durect if Posidur can hit certain development, regulatory, and sales milestones. Durect will also receive $14 million up front, which should equate to about another half-year's worth of cash (at its current burn rate) to supplement the $74 million already sitting on its balance sheet.

By keeping the upfront payment low and back-loading most of the cash payments, Nycomed hedges its losses in case Posidur doesn't pan out. Regardless, Durect will receive quite a high royalty rate, in the 15%-40% range, depending on the sales level Posidur achieves. Also, Durect gets to keep U.S. and Asian marketing rights for the drug.

The potential for Durect's science and technology has been validated before, when King Pharmaceuticals(NYSE: KG) signed a $400 million collaboration and marketing agreement with Pain Therapeutics(Nasdaq: PTIE), which had licensed Durect's technology for abuse-resistant pain drugs and from which Durect will receive royalties if approved.

With no possible additional drug candidate approvals and subsequent royalties or revenues anywhere close to occurring, farming out Posidur makes great business sense for Durect and will limit any share dilution from financings that may need to be done in the future. It's trading at a market capitalization of more than $330 million as of this writing, though, meaning that shares are a little richly valued for my blood, considering the length of time it will take for meaningful royalties and subsequent earnings to start coming to Durect. <<<