Bausch Health to acquire Durect for $1.75 per share in cash upfront

Bausch Health Companies (BHC) and DURECT Corporation (DRRX) announced a definitive agreement under which Bausch Health will indirectly acquire DURECT Corporation, including a novel therapeutic molecule, larsucosterol, which can harness the power of epigenetic modulation. Larsucosterol, an endogenous sulfated oxysterol and an epigenetic modulator, has demonstrated promising results for the treatment of alcoholic hepatitis in Phase 2 trials. Bausch Health’s hepatology development and commercial capabilities are well-suited to support the clinical development and potential commercialization of larsucosterol. A registrational Phase 3 program to evaluate the safety and efficacy of larsucosterol for the treatment of patients with severe AH is being planned. The trial will be a randomized, double-blind, placebo-controlled, multi-center study. The primary endpoint will be 90-day survival. The trial design will incorporate feedback received from the FDA during a Type B meeting under Breakthrough Therapy Designation as well as learnings from the prior Phase 2b AHFIRM trial in AH. The acquisition of the clinical development program for larsucosterol in AH compliments the ongoing Bausch Health RED-C clinical program which is designed to assess the efficacy of a next generation therapeutic, rifaximin SSD, to delay onset of first overt hepatic encephalopathy hospitalization and all-cause mortality. There are no medications globally approved for the primary prophylaxis and delay in decompensation to first episode of OHE in cirrhosis. Patient enrollment in two global Phase 3, randomized, double-blind, placebo-controlled studies is now complete with efficacy and safety results expected to be announced in early 2026. Under the terms of the definitive agreement, a wholly owned subsidiary of Bausch Health will commence a tender offer for all outstanding shares of DURECT Corporation. Under the terms of the definitive agreement, Bausch Health will pay $1.75 per share in an all-cash transaction for an upfront consideration of approximately $63M at closing, with the potential for two additional net sales milestone payments of up to $350M in the aggregate if the milestone is achieved before the earlier of the 10 year anniversary of the first commercial sale in the United States and December 31, 2045. The purchase price payable at closing represents a premium of approximately 191% to the 30-day volume-weighted average trading price of DURECT’s common stock ended on July 28, 2025, the last trading day before the announcement of the transaction. This upfront consideration represents a premium of approximately 217% to the trading price of DURECT’s common stock ended on July 28, 2025. The transaction is conditioned on a majority of the outstanding shares of DURECT Corporation’s common stock being tendered into the tender offer and not withdrawn, as well as other customary closing conditions. The transaction is expected to close in the third quarter of 2025. Assuming the closing of the tender offer, Bausch Health will acquire any shares of DURECT not tendered into the tender offer through a merger of a wholly owned subsidiary with and into DURECT for the same per share consideration payable in the tender offer.