Cantor Analyst: Durect Is Worth $3/Share, So Buy It

In a report issued Tuesday, Cantor Fitzgerald analyst Irina Rivkind Koffler reiterated a Buy rating and $3.00 price target on shares of DURECT Corporation DRRX, a micro-cap specialty pharmaceutical company.

The firm likes the company in account of its “attractive post-operative pain asset (POSIDUR), a number of late-stage, royalty-generating partnerships like Remoxy, Relday, and Eladur, and is developing a ‘novel class of steroids’ for the treatment of both chronic and acute indications such as metabolic disease and acute kidney or liver injury,” the note explains.

POSIDUR, in particular, is advancing as the company moves forward with its third Phase III double-blind, placebo-controlled trial. If everything goes according to plan, the drug could receive FDA approval by late 2017, the analyst added.

According to the research note, management feels optimistic about the upcoming trial outcome. Cantor Fitzgerald assigned POSIDUR a 75 percent probability of FDA approval.

On top of POSIDUR, Koffler mentioned three other catalysts she expects will drive Durect’s growth:

1) Zogenix, Inc. ZGNX could be announcing its Phase II Relday data (long-acting injectable anti-psychotic) in the third quarter of 2015.

2) Another micro-cap partner, Pain Therapeutics, Inc. PTIE, is expected to re-submit its Remoxy NDA in the first quarter of next year, and the analysts at Cantor believe the drug could get partnered before this occasion.

3) “Durect will conduct Phase I work on the injectable form of DUR-928 in 2015 and management still expects Phase IIa data in 2016.”