Shares of DURECT Corporationj (NASDAQ:DRRX) had a very bad Friday, and are down by 11.23% , but this is not as worrying as the information that came in after hours. According to the latest press release from DURECT, Gilead Sciences, Inc.(NASDAQ:GILD) , has provided notice that, effective as of December 22, 2020, it is terminating the License Agreement with DURECT.
What is this all about?
The deal, signed back in July 19, 2020, is related to R&D agreement between Gilead and DURECT development and commercialization of a long-acting injectable HIV investigational product utilizing DURECT’s SABER® technology. Back then Gilead made an upfront payment to DURECT of $25 million, while the Company stated how there is a “potential for up to an additional $75 million” in ergulatory milestones and “up to an additional $70 million in sales based milestones, as well as tiered royalties on product sales”.
As a result of this termination, DURECT anticipates recognizing remaining deferred revenue of approximately $23.1 million in the second quarter of 2020,
Year-to-date DRRX stock is pretty much sleeping with small ups and downs. With the latest information shares will probably go down another 10% and if there is no positive news on DUR-928 Phase 2 in Subjects With SARS-CoV-2 With Acute Liver or Kidney Injury I do not expect any further jumps.
Furthermore, the price of DRRX stock is same now as it was 5 years ago. If you are interested in a fast growing stock (at least for the reminder of 2020) this is not a stock for you.