When a company such as Durect conducts a reverse share split, it is usually because shares have fallen to a lower per-share pricepoint than the company would like. This can be important because, for example, certain types of mutual funds might have a limit governing which stocks they may buy, based upon per-share price. The $5 and $10 pricepoints tend to be important in this regard. Stock exchanges also tend to look at per-share price, setting a lower limit for listing eligibility. So when a company does a reverse split, it is looking mathematically at the market capitalization before and after the reverse split takes place, and concluding that if the market capitilization remains stable, the reduced share count should result in a higher price per share.

Looking at the DRRX split history from start to finish, an original position size of 1000 shares would have turned into 100 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into Durect shares, starting with a $10,000 purchase of DRRX, presented on a split-history-adjusted basis factoring in the complete DRRX split history.

About Durect

Durect is a biopharmaceutical company developing lifesaving investigational therapies derived from its Epigenetic Regulator Program. Larsucosterol, a chemical entity in clinical development, is the primary candidate in Co.'s Epigenetic Regulator Program. An orally bioavailable small molecule, larsucosterol has been shown in both in vitro and in vivo studies to play a regulatory role in lipid metabolism, stress and inflammatory responses, and cell death and survival. Co. is developing larsucosterol for alcohol-associated hepatitis, a life-threatening acute liver condition with no approved therapeutics. Co. has also investigated larsucosterol in patients with non-alcoholic steatohepatitis. According to our DRRX split history records, Durect has had 1 split.

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