Greetings and welcome to DURECT Corporation Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr.

Mike Arenberg, Chief Financial Officer. Please go ahead, sir..

Good afternoon, and welcome to our third quarter 2020 earnings conference call. This is Mike Arenberg, Chief Financial Officer of DURECT Corporation. I will provide a brief review of our financial results; and then Jim Brown, our President and CEO, will provide an update of our program. We will then open up the call for a question-and-answer session.

Before beginning, I would like to remind you of our safe harbor statement. During the course of this call, we may make forward-looking statements regarding DURECT's products and development, expected product benefits, our development plans, future clinical trials or projected financial results.

These forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Further information regarding these and other risks can be found in our SEC filings, including our 10-K and 10-Q under the heading Risk Factors. Let me now turn to our financials.

Total revenue in Q3 2020 was $2.7 million compared to $10.8 million in Q3 2019. Q3 2019 included the recognition of $6.2 million in deferred revenue from an upfront fee and milestone payments. So excluding that, the comparison of $2.7 million versus $4.6 million.

Product revenue, largely from the sale of ALZET pumps and LACTEL Polymers, was $2.4 million in Q3 2020 compared to $3.0 million in Q3 2019. The gross margin for these combined product lines was 55% in Q3 2020. These product lines continued to be strong and cash flow positive.

R&D expense was $7.0 million in Q3 2020 compared to $7.9 million in Q3 2019, primarily due to lower expenses in partner-funded R&D programs and lower POSIMIR-related expenses. SG&A expenses were $3.5 million in Q3 2020 as compared to $3.8 million in Q3 2019. Our underlying burn rate during the quarter was $7.6 million.

In Q3, we raised $6.1 million net of expenses by selling about 2.7 million shares through our ATM facility at an average price of $2.32. At September 30, 2020, we had cash and investments of $49.8 million as compared to $51.3 million at June 30, 2020, and $64.8 million at December 31, 2019. With that, thanks again for joining our call.

And I will now turn the call over to Jim for an update on certain of our programs..

30 milligrams and 90 milligrams of DUR-928 and a placebo arm. As with the Phase IIa trial, patients in the AHFIRM trial will receive an infusion with DUR-928 or placebo on day 1. And if tailing the hospital on day 4, they will receive a second infusion. The primary endpoint for AHFIRM will be 90-day survival.

We are currently initiating clinical sites and expect to dose the first patients soon. We expect that if we achieve a robust survival benefit, the study may support the NDA filing. Next, I will update on the DUR-928 Phase II trial in hospitalized COVID-19 patients with acute liver or kidney injury.

DUR-928 is non-antiviral agent with a naturally occurring epigenetic regulator that has tremendous potential to treat acute organ injury, including the systemic inflammation, such as in the case of sepsis.

Phase IIa clinical evidence in patients with acute alcoholic hepatitis and preclinical evidence in a number of multi-organ injury model, which demonstrate protection of the lung, liver and kidney, as well as demonstrated safety in AH patients in our Phase IIa study, suggests that DUR-928 be able to help COVID-19 patients.

In addition to long, patients with severe COVID-19 can develop multi-organ injury, including acute kidney, liver and/or cardiac injury, resulting from direct viral infections or complications from the viral infection. These may contribute to poor outcomes of patients with COVID-19.

From a safety perspective, DUR-928 has been well tolerated in nearly 300 subjects, both healthy volunteers and patients in multiple Phase I and II studies. Most relevant to COVID-19 are the results from our Phase IIa study of DUR-928 in AH patients.

As I described earlier, all 19 patients treated with DUR-928 survived the 28-day study, while one-month mortality in AH clinical trials is, on average, 26%. The size of multi-organ injury, one of the main complications associated with the death of AH patients, similar to those patients with COVID-19, is sepsis.

Therefore, this acute organ injury could be effectively treated or prevented in hospitalized patients with COVID-19. Lives could be potentially saved.

This Phase II trial is a double-blind, placebo-controlled, multicenter study to evaluate the safety and efficacy of DUR-928 in hospitalized, severe or critically-ill COVID-19 patients with acute liver or kidney injury. This study is an 80-patient trial with a 3:1 ratio of active to placebo.

The dose of DUR-928 is 150 milligrams by intravenous infusion on day one and day four. The primary efficacy endpoint is a composite of survival and being free of acute organ failure at day 28.

It is our hope that GUR-928, in combination with the standard of care, will be able to help COVID-19 patients with acute liver or kidney injury, which, if successful, ultimately could save the lives of some of these patients. We dosed our first patient in this trial in September.

We now have drug at multiple sites, and we are in the process of adding more sets. Next, I will update on the DUR-928 NASH program. In May of 2020, we reported positive top line results from our Phase Ib trial of DUR-928 in NASH patients with Stage one to three fibrosis.

This was a randomized, open-label and multicenter study of DUR-928 in NASH patients conducted in the United States. DUR-928 was dosed orally for 28 consecutive days at 50 milligrams or 150 milligrams once a day or 300 milligrams twice a day and followed up for an additional 28 days.

A total of 65 patients completed the study, and there were at least 20 patients per dose group. Key endpoints included safety and pharmacokinetics, clinical chemistry and biomarkers as well as liver fat content and liver stiffness by imaging that includes both MRI-PDFF and fiber scan.

GUR-928 treatment in this trial resulted in a global reduction from baseline of liver enzymes, liver fat, stiffness as measured by imaging and serum lipid. Many of these reductions were statistically significant.

Our statistically significant 24% reduction in plasma triglyceride was seen in the 16 patients who had baseline triglyceride levels above 200 milligrams per deciliter. 43% of the patients in this trial had at least a 10% reduction in liver fat as measured by MRI-PDFF.

In this group of patients, live fat, liver stickiness, liver enzymes and serum lipids were statistically significantly reduced from baselines. GUR-928 was well tolerated at all three doses evaluated. There were no serious adverse events recorded during the study.

Pharmacokinetic parameters after repeated dosing were comparable to those after a single dose from a prior study, indicating neural simulation after repeat dosing. Also, drug exposure was dose-dependent.

We believe having multiple important parameters all moving in the desirable direction are particularly impressive when you consider the patients were only dosed for one month. Additional results will be presented in the poster at the upcoming AASLD meeting, which is going to be between November 13 and 16.

These results achieved over a one-month course of treatment, together with the continued safety profile of DUR-928, are promising indicators of DUR-928's potential in NASH. Next, to the POSIMIR program.

POSIMIR is our investigational postoperative pain relief vehicle that uses our patented SABER technology and is designed to deliver bupivacaine to provide up to three days of pain relief after surgery.

Since our last earnings call, we have continued to communicate with the FDA regarding their review of the POSIMIR NDA and believe they are making progress with their review. If approved, we plan to license POSIMIR to a partner for commercialization in the United States.

We expect that this deal would include an upfront license fee and royalties based on product sales. Today, it's my pleasure to welcome Dr. Norman Sussman as our new Chief Medical Officer. Dr. Sussman is a renowned hepatologist with a proven track record in clinical research of liver disease.

He will provide critical support in advancing our clinical programs, and we look forward to his contribution. Dr. Sussman has extensive clinical experience and expertise in the liver disease field and brings over 30 years of clinical research and development experience in academia and industry.

He joined DURECT from Baylor College of Medicine where he was an Associate Professor of Medicine and Surgery. Dr. Sussman has been a faculty member of Baylor College of Medicine intermittently since 1985.

During this time, he has served as a principal investigator for research focused on assessment and management of acute liver failure and artificial liver support. Dr. Sussman has also had leadership experience in industry as the Founder and Vice President of both Hepatics Inc. from 1993 to 1995 and Amphioxus Cell Technology from 1995 to 2003.

Most recently, he has served in senior leadership role as a member of the Baylor Faculty Senate and as Director of Project ECHO, the telehealth program at Baylor's St. Luke's Medical Center. Dr. Sussman received his MBBch from the University of Witwatersrand in Johannesburg South Africa.

He then completed his residency at St Louis University Hospital and his first doctor fellowship at Washington University. He is Board-certified in internal medicine, gastroenterology and transplant ethnology. Dr.

Sussman is also a fellow of the American Association of the Study of Liver Disease, which is a designation that recognizes the superior level of professional achievement in the field of hepatology.

He is the thought leader in the field of hepatology, an excellent commission and communicator, and we're excited to have him with us as a member of our senior team. We are planning a virtual event later this month to introduce Dr. Sussman to our investors. We will announce the details of this event in the near future.

In summary, we're excited about the progress on DUR-928, the flagship of our epigenetic regulator program. We have begun clinical site initiation visits and are nearing first patient dosing in AHFIRM, our Phase IIb DUR-928 trial in severe AH patients.

Based on the results in the Phase II AH trial and the fact that survival is the primary endpoint for our AHFIRM, we are optimistic that if we are able to demonstrate a robust survival benefit in this trial, it may support an NDA filing.

We initiated patient dosing and are adding clinical sites into the DUR-928 Phase II trial in COVID-19 patients with acute liver or kidney injury.

In addition to the positive top line results we've already announced from our Phase Ib trial of DUR-928 in NASH patients with liver enzymes, liver fat and liver thickness as well as plasma lipids all moving in the right direction, we will be presenting biomarker data from this NASH trial at the AASLD meeting this month.

When you combine these results with the safety profile of DUR 928, we believe it has a chance to play an important role in the treatment of NASH. Today, we welcome Dr. Norman Sussman, DURECT's new Chief Medical Officer. His experience and patient focus will be critically important for the development of DUR-928 in AH and for other indications.

And during the quarter, we continued correspondence with the FDA regarding the POSIMIR NDA and believe they are making progress on their review. With that, we'd now like to take any questions you may have..

[Operator Instructions] Our first question comes from the line of Kristen Kluska with Cantor Fitzgerald. You may proceed with your question..

Hi, good afternoon, everybody. And thank you for taking my questions. My first question is in regards to the Phase IIb AHFIRM study for alcoholic hepatitis.

So based off the three-month mortality probability correlated with MELD scores and the literature around the hospitalizations and mortality, I wanted to ask what you might assume the mortality rate could be for the placebo group with these understandings..

Well, we did make a number of assumptions with regard to that as we laid out our patient numbers, and we are very conservative on our estimates. That's how we arrived at 300. But we haven't given the actual breakdown.

I don't know, WeiQi, what are your thoughts on that?.

Yes. I think that when we calculate the placebo mortality in three months, we actually looked at multiple publications out there. And then based on this group of patients as a three-month mortality, so in general, these patients at three-month mortality are at 20% to 30%.

So we actually make run like a computer modeling run and then maybe from a whole scale of the mortality and as compared with the 928. Of course, GUR-928, we haven't had three-month mortality data to base on. However, we do have mortality to base on.

So assume we have a similar increase from the second month to third month in terms of the rising of mortality as the published data, so then we run modulate to calculate our power for the mortality..

Yes. That was kind of the basis, and then we took a very conservative view on all that as we did the computer modeling..

Yes..

We assumed a lot more placebo patients would live and a lot more 928 patients would die with our basic assumption..

Okay. The next question is on the COVID-19 study for acute liver kidney injury. So it appears on clinicaltrials.gov that you have sites open in Chicago, Detroit and New York where, unfortunately, we have seen an increase in terms of the number of COVID-19 cases there.

So I know in your prepared remarks, you did mention that you are looking to open more sites.

So I wanted to ask, what are the key metrics you're looking at, at this time? And then also, in a situation where perhaps Chicago were cases really are, unfortunately, skyrocketing, would you look to kind of try to balance it out in the sites? So for example, if there's one where there's a lot of patients, you might look to balance it more across the site?.

We always try to have balance in any clinical trial, for sure. And unfortunately, it does come in split, as you said, and it's horrible when it does hit. We hit a center, and then it will go away, and it will come up someplace else. So we always try to be mindful of balance whenever we are conducting any clinical trial.

And as far as the new centers that we look to add in, those are generally in the South and in the West, and we've been working on these for a while and expect that they'll be up soon. So I hope that gives you some sense of it, but..

Yes.

And then, the last question also related to this program is just that since some of these organ injuries may appear during the hospitalization and now that there has been more cases, thus, more literature to kind of support the different organs that are being damaged as a result of the virus, how often are these patients getting their liver enzymes and the other key measurements checked to kind of look for this now that it's more known?.

Well, it's all part of their screening. So they get those as all part of a normal panel. And it's been unfortunate because we have seen of late that these monoclonal antibodies aren't seeming to help the more seriously ill, the most seriously-ill patients, and they're looking to try and give those earlier on.

We've seen a couple of major programs stopped their critical patient dosing and look to try to pay those patients who are less damaged. But they -- what we did -- they did the blood chemistries on a regular basis, so we would -- and the physicians would know what was going on.

WeiQi, would you add anything to that?.

Yes. So I think they do test at least all these patients given the fact that all these patients are -- so for the hospital physicians and then the caregivers, they usually -- they do care for them daily. But then the sample, they do only check for them typically is once daily. So every day, they don't get safety panels tracked.

So if there is an enzyme level, live enzyme levels elevated, they follow them carefully. Once they meet the criteria, so our physicians and our study coordinators, they are following up and monitoring these patients very closely. And then some patients maybe did not quite meet our criteria, but they actually monitor them daily..

Okay, thanks. That's very helpful looking forward to the updates at the liver meeting..

Thank you..

Our next question comes from the line from Francois Brisebois with Oppenheimer. You may proceed with your question..

Hey, thanks for taking the question. First one here, I just wanted to talk about the evolution of the primary endpoint here. Obviously, it's easier at a shorter time period. It seems like 90 days is still pretty short, which is nice.

And then, can you just talk about how that's evolved in terms of the length of survival rates with time?.

Sure, it was historically longer. And in fact, when Gilead did their trial that didn't work with their SB1 inhibitor, that was a six-month trial. But the FDA and the liver association both in the U.S. and Europe have been meeting fairly frequently going over this.

And the last meeting where we attended -- where this was discussed was in October of last year in Chicago. And at that meeting, it was decided that 90 days would be an appropriate amount of time to be able to look at follow-up and survival. This is an acute episode. That seems to be the best duration.

And so based on that, that I think the FDA made their decision that that's what they wanted to see from this trial..

Okay, great.

And in terms of the dosage, can you just talk about the difference between one dose and two doses here and how that was decided for the Phase IIb and your confidence in that the second dose at day four could help?.

Sure. Yes, I'll let WeiQi speak to that first. Go ahead, WeiQi..

Sure. Thank you, Jim. So we actually, in our Phase IIa study, of course, that study was designed as the safety PK study. So we gave our first dose. Every patient would receive the first dose. However, we -- at the time we made a decision we thought if the patient is qualified to be discharged, why should we keep these patients.

Because as -- earlier, as Jim mentioned, these patients are relatively younger, and then they tend to recover by themselves, if you can help them to recover from the acute episode. So if would they are after first dose, recover from their acute episode, and then why should we keep them in the hospital.

So that's why, in the first Phase IIa study, we made the decision only those patients, if they are still hospitalized, then they would receive the second dose. And also, that's also based, of course, based on the mechanism of action of our drug.

So with that experience in mind, and then we decided when we move to the Phase IIb trial, we will keep the same dosing regimen. So only if those people are still -- patients are still hospitalized, then they would receive the second dose.

If they -- after the first dose, if they do recover, and then last quarter, means they are on the trend of recovery. So the chances are most of these patients, they will eventually come down -- calm down their liver inflammation..

Okay, understood. And then is Dr.

Sussman on the line or no?.

No, he's not on the line right now. He's actually in his -- his actual first day. So he's still going through orientation and just kind of getting all the paperwork done and everything else. So he's -- although I'd say he was on the call earlier this morning, so he -- but he was -- he's got some first day stuff to do today.

He's actually been working with us, helping us for a while. Sorry, go ahead..

Figure, yes. On the AH side, obviously, with COVID, there seems to be more and more of the drinking and the consumption, as you mentioned. Do you think that's something -- are you guys giving any color on the recruitment timing? Is that something that you actually -- a lot of companies are struggling to enroll drink COVID.

And do you think this is something that can actually accelerate your enrollment?.

I don't know if accelerate is the right term. But I do think, unfortunately, I know that alcohol consumption is up in the United States. We know that from the literature.

We know that from the physicians we talk to as we've been out talking to, WeiQi and I have been talking to physicians at centers, whether it's for the COVID trial or centers or for AH as they're signing up these sites, they're all talking about the AH patients that they have in there.

So there are a lot more alcohol consumption, a lot more people in the hospital for AH. And unfortunately, it seems as if a lot of them are younger. And so I don't want to make any projections right now. We want to kind of see how the trial is going as far as enrollment. So we're going to give it some months to get a sense of it all.

But it certainly is a different time. And if you've got alcoholic hepatitis, you don't have an option to stay home. If you stay home, you're probably going to die. And so they do end up having to go to the hospital, and they do end up at the hospital.

And so I think it's different from that perspective versus other trials where it's at the election of the patient.

And there are is so many different diseases from my colleagues out there who are running other companies, that it can be a challenge during this time to conduct clinical trials, but that may not be the case, probably won't be the case for them..

Okay. And then just lastly here, this is probably more for Mike. Any color you can give on revenues kind of going forward? Is this something that we would expect here? I'm thinking more on the collaboration R&D and other line, $306,000. It was negative $30,000 in the first quarter.

Just trying to get a gauge for going forward what you can share there?.

Yes. Thanks, Francois. We don't really project our revenues like that. But we do have a number of early-stage collaborations that generate revenue. And then on the product revenue side, we -- I would say that Q3 was a little bit depressed from the -- due to the virus, but I think Q4 will look better..

Okay, excellent.

I'm just trying to -- is there something that's changed in the business on that side versus the first quarter and second quarter '19, where it was more about $1.5 million on that line?.

The biggest change on the collaborative R&D was Gilead. They were driving a fair amount of debt in 2019. And so that, you take that away, and -- but we still have a number of early stage, small programs. So they're going to kind of fluctuate from quarter-to-quarter..

Excellent. All right. That's it from me. Thank you..

Thank you..

Our next question comes from the line of Mayank Mamtani with B. Riley. You may proceed with your question..

Hi, good afternoon. This is dialog for Mayank. Congrats on all the progress with GUR-928. Great for Dr. Sussman joined the team. We look forward to working with him. First question from us is on POSIMIR. Would be great if you could provide a bit more granularity on some of the information requests, if any, that are more recent than others.

And any incremental color you have on sort of the agency stop process on how POSIMIR might stick in the postoperative pain management paradigm? And I'm thinking of some of the recent FDA reviews in the state, one being kind of the CRL issues avenue therapeutics due to a theoretical concern of opioid stacking and then also observing some non-opioid analgesics like IV meloxicam and Heron's program? Just any color you have there would be great..

Yes. I mean we're trying to stay as neutral as we can on this. So we just -- we want our investors look what's going on as far as communications. And we have been in active communications with the FDA during this past quarter, which is what we shared. We haven't given details of the types of conversations, communications that we've had.

And I couldn't really speak to their thoughts on the post-op space. Certainly, there have been a number of decisions with different products, but POSIMIR has its own pass, and we're working towards it. We don't want to appear overly optimistic. We don't want to appear overly pessimist.

I'm really trying to just communicate a neutral kind of position at this point in time. But just to let people know they're asking questions, we're giving answers very quickly. At this point, don't want to give the types of questions they're asking, but it's still going on..

Okay. No, that's fair. I appreciate the thoughts. Maybe switching gears to the alcoholic hepatitis program. A similar line of questioning on how you sort of see 928 fitting in the context of the treatment paradigm, particularly in the context of the watch-and-wait approach.

Looking at the recent Gilead observational study that they'll present at AASLD, where sort of clearly, earlier intervention, albeit with transplant, may have resulted in better outcomes.

And in that same line of thinking would help how you think about kind of accommodating a placebo response if patients are aggressively managed in a more well-controlled clinical trial setting..

Well, I think the nice thing about this disease is the patients do have an opportunity, but to have a little bit transplant if they're at the end of the line, and there's no other help and no other hope for them. So -- and they turned to be everybody's good stewards as the hep C patients have been. So it's nice to have that backstop.

The unfortunate circumstances is that backstop is very expensive. We have a minimum kind of $800,000 oftentimes goes well in excess of $1 million.

And so what we have with 928 is something that we hope can be out there to help these patients, put them on the right track physically and then allow them to move forward with their lives in the right direction and save a tremendous amount of cost, along with potentially saving their lives.

And so we think there's a great opportunity for the drug because, as you know, there is no therapy approved out there. And steroids have been shown not to improve survival and can double the infection rate nearly so.

And so it's -- we think it's a great opportunity for 928 to be able to help patients in an ICU setting and may well be the first of many indications. But it's certainly a very, very important one. Probably one of the most important ones out there in the liver space today. It's one of the reasons why Dr. Sussman is joining us.

And I look forward to when you guys get a chance to hear his experience because he just literally on Friday left the clinic, and he was treating these patients for many, many years. So he can give you his perspective as to why he's here and what do you think it's going to mean..

Absolutely. I'm very much looking forward to that sort of virtual investor. And just lastly, one question on the NASH indication.

Kind of given the benign safety profile that you guys have served in the Phase Ib study with oral candidate, is there any plans to explore a pediatric NASH indication? And if so, what sort of incremental talks work may be pending?.

That -- it would require additional talks. And that is something we want to always looks at, but I think we would cut the path through first in adults and then look for pediatric after. But you're right in noting that DUR-928 has a very nice safety profile to date, and we're quite happy that that's the case.

And we're also very fortunate to have all of those parameters moving in the right direction. For a 28-day study, that's pretty impressive. And look forward to sharing more data, the biomarker data at the AASLD meeting coming up in another few weeks or so..

Great. Thanks for taking our questions, and congrats on all the projects..

Thank you..

Our next question comes from the line of Michael Morabito with Chardan Capital Markets. You may proceed with your question..

Hi, guys, thanks for taking the questions. I just have follow-ups on a couple of updates. On AHFIRM, you mentioned that you have already opened a couple of sites so far, but you haven't started dosing yet.

So do you have any indication of how many patients you think that you might dose as early as this quarter and how that will increase moving forward as you open more sites? And could you also give us a sense of how many of those sites will be in the U.S.

versus ex-U.S.?.

Sure. I'll let WeiQi maybe speak to the site split between U.S. and Europe projected at this point..

Yes. We probably approximately 1/3 of the site will be in Europe, and then 2/3 of the site will be in U.S. So that -- this is different from the Gilead trial, as Jim earlier mentioned, that's one of the benchmarks for the enrollment.

So Gilead, mostly their sites were focused in Europe, but we decided to focus most of our sites in U.S., so that where we are currently, we are focusing on mainly opening up for the U.S. side..

Yes. I think that's good. Yes, I think if you look at using the Gilead trial as a benchmark, they took -- it was about 18 months for them to enroll 100 patients, but that was requiring six-month model follow-up, and we will be doing only three months. So it will be less time there. They also required liver biopsy of all of their patients.

And that unfortunately tends to slow trials down. And they required all of their patients to take steroid. And that's only somewhere around 40% of serious patients are eligible to take steroids; so that has a substantial cut on the population as well.

And when you add those together with the Phase IIa data we have with such a nice response and then the unfortunate fact that during the pandemic, this condition seems to be higher, all of those things will have an influence on the enrollment rate..

Okay, great.

And as a follow-up, as you move forward this AHFIRM and you begin enrolling and begin dosing patients, what impact do you expect that to have on the R&D costs moving forward over the next 12 to 18 months?.

The trial, fortunately, is not a particularly expensive trial, and by pharma standards, it's probably about $25 million total external costs, and so that will be divided up across the duration of the trial. So it determines something that we can afford to do and having our budget..

Okay. And finally, just you mentioned in your press release the launch of messenger by Orient pharma.

Do you expect this to have any kind of meaningful impact on the product revenues moving forward?.

I'll let Mike speak to it.

Mike?.

Yes. So it's the first country to see the launch. So Taiwan, which is a relatively small ADHD market, so probably not right away. Hopefully, Orient will be partnering it in additional countries. They have 14 countries in Asia. So certainly would hope that they would be partnering in additional countries and that there would be a growth there.

But initially, it will be pretty small, we would expect..

Okay, great. Thanks for taking the question..

Thank you..

Our next question comes from the line of Ed Arce with H.C. Wainwright. you may receive with your question..

Hi, good afternoon, everyone. This is Thomas Yip asking a couple of questions for Ed. Congratulations to Dr. Sussman's appointment to the DURECT team. My first question is about the Phase IIb AHFIRM trial going along with last couple of questions about enrollment.

Roughly, Can you tell us the rough number of sites that are active so far and given AHFIRM is targeted only for severe patients, what is the expected pace of enrollment versus the Phase IIa approved concept trial?.

Well, the interesting thing in the Phase IIa trial, we enrolled the severe patients much more rapidly. We enrolled all 12 severe patients before we had completed -- we had only enrolled seven in the moderate patients because the moderations don't typically -- they sometimes go to the hospital.

But if they do, they don't stay very long and because they aren't as severely ill. So the fact we're enrolling severe, I think, will actually, unfortunately, difficult because they're very sick. Those patients will present at a much higher rate.

The number of centers, I don't know that we -- have we broken that out, WeiQi?.

No. I don't think we have broken that out, yes..

Yes, it's going to be a good number. It will be north of 40 centers total between North America and Europe..

And more, yes..

And more, yes. And we have a number that we've already had site initiation visits, and we have more planned, almost whenever they come on a weekly basis, we add in more and more. And then they can ship drug, and then it gets set up and get ready to go. So we just started to get up, but very, very excited about being able to help these patients..

Yes, definitely. It sounds like good progress so far.

And then regarding the AHFIRM's endpoints, is there a 90-day survival benefit threshold of 928 over placebo that you believe could enable 928's NDA?.

Yes. If we're able to show our best survival at 90 days, it's hard to argue against that, right, because survival is kind of the ultimate endpoint. And now a surrogate endpoint is the point, is a very important if not the most important one.

So if we can show an improvement in survival over placebo when there's no therapy out there today that is approved and patients are dying at a rate that some of the worst cancers out there one- month and two-month and three-month survival, we certainly believe that would merit -- should merit an American accelerated review and potentially getting approval on a single trial..

Right, okay. Yes, we look forward to that. And then one question regarding the NASH program.

Given three doses that were tested in Phase Ib, 50, 100 and 150, are there any work ongoing to either narrow down the dose or perhaps even testing, putting in new dosage of for Phase II?.

Well, certainly, the next trial that we would do would be some type of Phase IIa trial, would be my guess. And the dose will be further refined there. But I don't know, WeiQi, do you want to speak to the dose? What it brings....

Yes. I think that for this current study, completed the study, we have a very wide dose range, costed from 50 to 600 milligrams per day. So that's quite a wide range of doses for the GUR-928. And as Jim earlier mentioned that we just have received the outbound other data because of the delay due to the pandemic of the reagent.

So right now, we have all the data together. We get submitted a poster for the AASLD, but at the same time, we are in the process of sharing our data and then talking to multiple of our KOLs and then to get the feedback, what could be our next study in the field..

Okay, thanks. Thanks. Thank you, for the update is. And what about that? I think it's going to have questions, and congratulations on the birth of fiscal quarter..

Thank you so much..

Our next question comes from the line of Elemer Piros with ROTH Capital Partners. You may proceed with your question..

Yes. Hello, everyone. Jim, if I may just turn for a quick moment to Mike. Mike, I was too slow to write on how many shares you issued during the quarter. Maybe if you could give me, please, the ending share count as of September 30, if you have it..

Yes, 203.2 million shares..

203.2.

And Jim, in the COVID study, how many sites do you plan to add to the current three? What is the plan?.

It's not going to be a huge number at this point. Right now, we're looking to maybe double that. And it will depend on how enrollment goes and how this virus goes and where it goes because it's not a simple process.

Do you find it, to say, in the city, and then difficult -- it's very difficult to go to a city that is a hotspot and to set up at that point in time because the centers are just overwhelmed.

And so one needs to be somewhat anticipate a little bit or find a center that is not yet burning so hot and work with them because it takes quite a bit of time to get a center up and running with all the legal pay work that needs to be done.

So, I think we'll just have to -- we're just kind of -- we're moving through the process is very dynamic kind of as it goes..

Do you have an advantage vis-à-vis some competing drug there in terms of the -- you address a unique aspect of it..

I think so. I don't know that there really is anyone else out there looking to treat patients that have other organs that are damaged actively. Certainly, the steroids are out there and being used for that, and we're happy to use 928 with steroids. So that's fine and with any antiviral that are helpful.

But it is -- so that, I think, is to our advantage. The reality of it is there are huge number of trials out there. Most of them are trying to help patients who are less severely ill than the ones we're going for severe to critical. So most of our patients that we're looking at are in the ICU or just about to go into the ICU.

So it's a different group of patients and a lot of agents are looking at.

And then, the other -- you lay over the top of that, these vaccine trials, which, although we're not competing with them from the site of patients, we are competing with them, unfortunately, by virtue of just the infrastructure within a given hospital system and how we study coordinators alike.

So you have some company that are looking to enroll 30,000 patients or 50,000, those are a wave of requirements from these facilities that are challenging for them to deal with at the same time. So all of these things kind of interplay. So it's a complex world..

Yes.

So once you had a chance to share the complete NASH data with the KOLs, what do you think we might hear about the next steps, the Phase IIa trial, as you described it?.

No, I think it will probably be a next year event, would be my guess, just based on that the AASLD coming up very shortly, and we're talking to people. So maybe we talk to more people during AASLD and post AASLD. With Dr. Sussman being onboard, he will also be involved in the process.

So I don't know, WeiQi, do you want to try and give any more clarity? Or is that reasonable?.

I think that's reasonable. I don't have anything else to add, yes..

Yes. Because the end of the year is coming faster than we'd like, unfortunately..

Yes. But thank you so much..

Sure..

Our next question comes from the line of Francois Brisebois with Oppenheimer. You may receive a question..

Sorry, quick last one here.

Just wondering, any update on potential publication related to the methods of action of DUR-928? Or just any color there?.

He is working on it, I don't know.

WeiQi, what would you say about the manuscript or what's going on?.

Yes, the manuscript has been submitted, and we do -- from our side, we do hope it can be published very soon. Of course, for people who are familiar with the publication procedures, sometimes maybe it depends on the editors or the reviewers, they may want the author to revise certain paragraphs as they have different questions.

And then so usually, going back and forth a few runs, so but then, the manuscript has been compiled and then submitted. So we are really hoping it can be out very soon..

Yes, a great number of years of hard work on that one, let me tell you..

Understood. I just had that. Thank you..

Sure..

Our next question comes from the line of Hank Beinstein with Gagnon Securities. You may proceed with your question..

Good afternoon, Jim. Congratulations to Dr. Sussman to your team. I'm sure that this will be a major addition and hopefully, move the projects along more rapidly over time. Most of my questions have been answered, but I did have one related to the AH study, if I could.

Are the hospitals that were involved in the earlier studies participating in the current anticipated study of 300 patients?.

I'd say almost all of them are and a lot of their friends.

I don't know, WeiQi, what would you say?.

Yes. I think I would say the same, yes..

There's a lot of people who have been falling and asked when it's coming because they have so many of these patients. It's really sad. And a lot of young people in their late '20s and 30s because, I guess, there's just more bridge drinking with millennials than there was from my generation, for sure, so..

Well, I noted that your earlier comment was that 1/3 of the hospitals would be in Europe.

Is that because we can't get enough hospitals here in the United States? Why are we extending the program to Europe?.

Well, I think it's both because the disease of circumstances occur both places, and we're trying everything we can to try and speed enrollment. And so we're availing ourselves of all possible, if There's a decent site out there that can help. And especially, if you look at what's going on in the U.K.

and certain places in Europe, Northern Europe and the like there and in Eastern Europe, there's a lot of problems with alcohol consumption..

All right, got it. Okay, fine. Thank you very much, and contrasting, getting congrats on adding Dr. Sussman to your team..

Thanks..

Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Mr. Mike Arenberg for closing remarks..

Well, thanks, everyone, for participating. We're excited about the progress we're making on a number of fronts, and look forward to keeping in touch with those of you that would like to reach out over the next few days and weeks and months. And thanks again for participating..

Thank you, all..

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time..