DURECT Corporation Announces Third Quarter 2012 Financial Results and Update of Programs

 DURECT Corporation Announces Third Quarter 2012 Financial Results and Update
                                 of Programs

PR Newswire

CUPERTINO, Calif., Nov. 5, 2012

CUPERTINO, Calif., Nov. 5, 2012 /PRNewswire/ --DURECT Corporation (Nasdaq:
DRRX) announced today financial results for the three months ended September
30, 2012. Total revenues were $3.8 million for the three months ended
September 30, 2012 as compared to $8.1 million for the three months ended
September 30, 2011. Net loss for the three months ended September 30, 2012
was $4.8 million, compared to a net loss of $5.0 million for the same period
in 2011.

(Logo: http://photos.prnewswire.com/prnh/20020717/DRRXLOGO)

At September 30, 2012, we had cash and investments of $21.0 million, compared
to cash and investments of $23.7 million at June 30, 2012 and $30.8 million at
December 31, 2011. We have no debt obligations, other than normal liabilities
associated with running our business.

"Following our pre-NDA communications with the FDA this summer, we are
preparing to submit a new drug application for POSIDUR in the first quarter of
2013," stated James E. Brown, D.V.M., President and CEO of DURECT. "Pfizer
has initiated a confirmatory bioavailability study to assess the
pharmacokinetic profile of modified REMOXY formulation compositions, with a
data read out expected early in 2013. We also are pleased that Zogenix has
been actively enrolling in the Phase I clinical trial for Relday."

Update of Programs:

  oREMOXY^® (oxycodone) Extended-Release Capsules CII. Pfizer has efforts
    underway to resolve the issues raised in the REMOXY Complete Response
    Letter and stated in their quarterly earnings call on November 1, 2012
    that they have initiated a confirmatory bioavailability study to assess
    the pharmacokinetic profile of modified REMOXY formulation compositions,
    with data expected in early 2013. Pfizer expects that the results of this
    study will provide greater clarity on Pfizer's ability to adequately
    address the questions raised in the Complete Response Letter, and Pfizer
    is targeting a meeting with the FDA in late March to discuss these
    outputs. Based on feedback Pfizer receives from the FDA at the meeting,
    Pfizer will subsequently determine the next steps and/or required timing
    to respond to the Complete Response Letter.

    REMOXY,  an investigational drug, is a unique long acting oral formulation
    of oxycodone intended to treat moderate to severe pain. Based on DURECT's
    ORADUR^® technology, which is covered by issued patents and pending patent
    applications owned by us, REMOXY is designed to discourage common methods
    of tampering associated with prescription opioid analgesic misuse and

  oPOSIDUR^™ (SABER^®-Bupivacaine) Post-Operative Pain Relief Depot.
    Following our pre-NDA communications during the summer with the FDA
    regarding POSIDUR, we intend to submit a new drug application (NDA) under
    505(b)(2) with the FDA in the first quarter of 2013.

    POSIDUR is our investigational post-operative pain relief depot that
    utilizes our patented SABER technology to deliver bupivacaine to provide
    up to three days of pain relief after surgery. We currently hold
    worldwide commercialization rights to POSIDUR.

  oTransdermal Development Candidates. DURECT has two transdermal products
    that are in mid- to late-stage development with features that may be
    superior to currently available patches. TRANSDUR^™-Sufentanil  is our
    proprietary transdermal patch intended to deliver sufentanil to chronic
    pain sufferers for a period of up to 7 days from a single application;
    this compares favorably against existing fentanyl patches which are
    substantially larger and typically effective for 2-3 days. ELADUR, for
    topical neuropathic conditions such as post-herpetic neuralgia (PHN), is
    our proprietary transdermal patch intended to deliver bupivacaine for a
    period of up to three days from a single application; existing lidocaine
    patches for this condition can be worn for 12 hours with a rest period of
    12 hours during which time many patients experience breakthrough pain. We
    are in discussions with potential partners regarding licensing development
    and commercialization rights to these two transdermal programs to which we
    hold worldwide rights.
  oORADUR-ADHD Program. We are developing a drug candidate (ORADUR-ADHD)
    based on DURECT's ORADUR Technology for the treatment of Attention Deficit
    Hyperactivity Disorder. This drug candidate is intended to provide
    once-a-day dosing with added tamper resistant characteristics to address
    common methods of abuse and misuse of these types of drugs. We and Orient
    Pharma have completed several Phase I pharmacokinetic studies with
    multiple formulations, and we are continuing to refine our lead
    formulations. Orient Pharma is our licensee for certain Asian and South
    Pacific countries, while we retain the rights to the rest of the world.
  oRelday^™ (Risperidone Program). In July 2011, we signed a development and
    license agreement with Zogenix to develop Relday, a product candidate
    targeting the antipsychotic market. In July 2012, Zogenix announced that
    it had initiated its first Phase I clinical trial for Relday in patients.
    This study is a single-center, open-label, safety and pharmacokinetic (PK)
    trial that will enroll 30 patients with chronic, stable schizophrenia or
    schizoaffective disorder. We understand that Zogenix expects that the
    study will be completed by the end of 2012. Relday is a proprietary,
    long-acting (once-monthly) injectable formulation of 0.5 mL of risperidone
    using DURECT's SABER controlled-release formulation technology in
    combination with Zogenix's DosePro^® needle-free, subcutaneous drug
    delivery system. The existing long-acting injectable risperidone product,
    which achieved $1.6 billion in global net sales in 2011, requires
    twice-monthly, 2 mL intramuscular injections with a 21 gauge or larger
  oFeasibility Projects and Other Activities. During the third quarter of
    2012, we continued work on several feasibility projects as a means of
    demonstrating that our technologies can achieve the drug delivery
    objectives set forth by our collaborators and are worthy of further
    development. The Zogenix program, described above, was one such project
    which has matured into a development and license agreement.
  oBusiness Development Activities. We have multiple programs that may
    potentially be licensed over the next 12-18 months. These include 
    POSIDUR, TRANSDUR-Sufentanil, ELADUR, ORADUR-ADHD (territories outside
    certain Asian and South Pacific markets), as well as various other
    programs which we have not described publicly in detail.

Earnings Conference Call

A live audio webcast of a conference call to discuss third quarter 2012
results will be broadcast live over the internet at 4:30 p.m. Eastern Time on
November 5 and is available by accessing DURECT's homepage at www.durect.com
and clicking "Investor Relations." If you are unable to participate during the
live webcast, the call will be archived on DURECT's website under Audio
Archive in the "Investor Relations" section.

About DURECT Corporation

DURECT is a specialty pharmaceuticalcompany developing innovative drugs for
pain and chronic diseases, with late-stage development programs including
proprietaryoral, transdermal and injectable depot delivery technologies
enable new indications and superior clinical/commercial attributes such as
abuse deterrence, improved convenience, compliance, efficacy and safety for
small molecule and biologic drugs. For more information, please visit

NOTE: POSIDUR^™, SABER^®, ORADUR^®, TRANSDUR^® and ELADUR^® are trademarks of
DURECT Corporation. Other referenced trademarks belong to their respective
owners. REMOXY, POSIDUR, ELADUR, TRANSDUR-Sufentanil and Relday are drug
candidates under development and have not been approved for commercialization
by the U.S. Food and Drug Administration or other health authorities.

DURECT Forward-Looking Statement

The statements in this press release regarding the potential bioavailability
study for REMOXY, potential regulatory meetings and submissions for REMOXY and
POSIDUR, anticipated clinical trials (including timing and results) for Relday
and our other drug candidates, the potential benefits and uses of our drug
candidates, collaborations with third parties and potential business
development activities are forward-looking statements involving risks and
uncertainties that can cause actual results to differ materially from those in
such forward-looking statements. Potential risks and uncertainties include,
but are not limited to, the risk that Pfizer will discontinue development of
Remoxy, the risk of adverse decisions by regulatory agencies, including
rejection of meeting requests, requests for additional information or product
non-approval, delays and additional costs due to requirements imposed by
regulatory agencies, potential adverse effects arising from the testing or use
of our drug candidates, the potential failure of our clinical trials to meet
their intended endpoints, our potential failure to maintain our collaborative
agreements with third parties or consummate new collaborations and DURECT's
(and that of its third party collaborators where applicable) difficulty or
failure to obtain approvals from regulatory agencies with respect to its
development activities and products, or ability to design, enroll, conduct and
complete clinical trials, complete the design, development, and manufacturing
process development of the referenced product candidates, manufacture and
commercialize the referenced product candidates, obtain marketplace acceptance
of the referenced product candidates, avoid infringing patents held by other
parties and secure and defend patents of our own, and manage and obtain
capital to fund operations and expenses. Further information regarding these
and other risks is included in DURECT's Form 10-Q on August 7, 2012 under the
heading "Risk Factors."


(in thousands, except per share amounts)
                                     Three months ended   Nine months ended
                                     September 30,       September 30,
                                     2012       2011       2012    2011
Collaborative research and           $       $       $      $  15,906
development and other revenue        1,126     5,206     41,681
Product revenue, net                 2,702      2,909      8,127   8,646
   Total revenues                    3,828      8,115      49,808  24,552
Operating expenses:
   Cost of product revenues^        1,037      1,300      3,616   3,786
   Research and development          4,745      8,452      15,361  27,040
   Selling, general and              2,854      3,377      9,183   10,420
Total operating expenses             8,636      13,129     28,160  41,246
Income (loss) from operations        (4,808)    (5,014)    21,648  (16,694)
Other income (expense):
   Interest and other income         17         31         66      109
   Interest expense                  (12)       (42)       (15)    (42)
Net other income                     5          (11)       51      67
Net Income (loss)                    $       $       $      $ 
                                     (4,803)    (5,025)    21,699  (16,627)
Net income (loss) per share
   Basic                            $      $      $     $  
                                     (0.05)     (0.06)     0.25   (0.19)
   Diluted                           $      $      $     $  
                                     (0.05)     (0.06)     0.25   (0.19)
Weighted-average shares used in
computing net income (loss) per
   Basic                            87,671     87,450     87,607  87,375
   Diluted                           87,671     87,450     87,726  87,375
Total comprehensive income (loss)    $       $       $      $ 
                                     (4,796)    (5,037)    21,700  (16,622)

(in thousands)
                                  As of                    As of
                                  September 30, 2012       December 31,
Current assets:
 Cash and cash equivalents     $             $         
                                    6,285                    8,896
 Short-term investments        12,193                   19,535
 Short-term restricted         -                        367
 Accounts receivable           2,082                    3,448
 Inventories                   3,291                    3,252
 Prepaid expenses and other    935                      1,803
current assets
Total current assets              24,786                   37,301
Property and equipment, net       2,559                    3,124
Goodwill                          6,399                    6,399
Intangible assets, net            40                       53
Long-term investments            2,141                    1,530
Long-term restricted Investments  400                      501
Other long-term assets            288                      288
Total assets                      $             $         
                                   36,613                    49,196
Current liabilities:
 Accounts payable              $             $         
                                     785                   1,274
 Accrued liabilities           3,760                    4,884
 Contract research liability   472                      1,361
 Deferred revenue, current     312                      7,372
Total current liabilities         5,329                    14,891
Deferred revenue, noncurrent      1,558                    30,090
Other long-term liabilities       662                      738
Stockholders' equity              29,064                   3,477
Total liabilities and             $             $         
stockholders' equity               36,613                    49,196
(1) Derived from audited
financial statements.


Website: http://www.durect.com
Contact: Matt Hogan, Chief Financial Officer, DURECT Corporation, 408-777-4936
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