Bausch Health Completes Acquisition of DURECT Corporation, Expanding Late-stage Liver Disease Portfolio

Rhea-AI Summary

Bausch Health (NYSE:BHC) has successfully completed its acquisition of DURECT Corporation for $1.75 per share, representing a total upfront cash payment of $63 million. The deal includes potential additional milestone payments of up to $350 million based on net sales achievements.

The acquisition brings DURECT's lead asset larsucosterol, an FDA Breakthrough Therapy-designated epigenetic modulator for alcohol-associated hepatitis (AH), into Bausch Health's hepatology pipeline. A Phase 3 program is being planned to evaluate the treatment's safety and efficacy. Currently, there are no approved therapies for AH, with existing supportive care resulting in approximately 30% mortality within 90 days of hospitalization.

The tender offer secured approximately 19,984,767 shares, representing about 62% of DURECT's outstanding common stock. Following the merger, DURECT has become a wholly owned subsidiary of Bausch Health and will be delisted from Nasdaq.

Positive

• Acquisition of larsucosterol, an FDA Breakthrough Therapy for alcohol-associated hepatitis with no current approved treatments
• Potential for additional revenue through milestone payments up to $350 million
• Strengthens Bausch Health's hepatology pipeline in high-need therapeutic area
• Strategic expansion into liver disease market with late-stage asset

Negative

• Significant upfront cash payment of $63 million required
• Phase 3 trial costs and development risks still ahead
• Milestone payments contingent on future sales performance
• Integration costs and risks associated with merger completion

Insights

Pharmaceutical Industry Analyst

Bausch Health's acquisition of DURECT adds breakthrough therapy for untreated liver disease, expanding pipeline with significant market potential.

Bausch Health has completed its $63 million acquisition of DURECT Corporation, gaining larsucosterol - an epigenetic modulator with FDA Breakthrough Therapy Designation for alcohol-associated hepatitis (AH). The deal structure includes potential milestone payments of up to $350 million based on future sales performance, capped at the earlier of 10 years after first US commercial sale or December 2045.

This acquisition addresses a significant unmet medical need. AH currently has no FDA-approved therapies, with patients relying on corticosteroids that yield inadequate outcomes and approximately 30% mortality within 90 days of hospitalization. The high mortality rate and frequency of hospitalizations from this condition represent a substantial market opportunity.

Strategically, this transaction aligns with Bausch Health's focus on expanding its hepatology portfolio with late-stage assets. By acquiring a drug with Breakthrough Therapy Designation that's advancing toward Phase 3 trials, Bausch gains a potential first-to-market therapy for AH. The breakthrough designation also suggests potential for accelerated regulatory review.

For DURECT shareholders, the $1.75 per share cash consideration provides immediate liquidity, while the contingent value rights (CVRs) offer potential upside if larsucosterol achieves commercial success. The transaction structure - with 62% of shares tendered before completion - indicates strong shareholder support for the deal terms.

This acquisition demonstrates Bausch Health's commitment to rebuilding its pipeline with innovative therapies addressing substantial unmet needs, potentially creating new revenue streams to strengthen its long-term growth trajectory.

The transaction adds larsucosterol, an FDA Breakthrough Therapy for alcohol-associated hepatitis with a registrational Phase 3 clinical trial in development, to Bausch Health's hepatology pipeline

LAVAL, QC, AND CUPERTINO, CA / ACCESS Newswire / September 11, 2025 / Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) ("Bausch Health"), a global, diversified pharmaceutical company, today announced the successful completion of its previously announced tender offer to acquire DURECT Corporation ("DURECT"). Under the terms of the agreement, Bausch Health acquired all outstanding shares of DURECT for $1.75 per share in cash, representing a total upfront cash payment of approximately $63 million at closing. The transaction also includes the potential for two additional net sales milestone payments of up to $350 million in the aggregate (subject to certain adjustments in respect of a retention plan) if the milestones are achieved before the earlier of the 10-year anniversary of the first commercial sale in the United States and December 31, 2045.

The acquisition adds DURECT's lead asset, larsucosterol, a novel epigenetic modulator with FDA Breakthrough Therapy Designation for treatment of alcohol-associated hepatitis ("AH"), to Bausch Health's hepatology pipeline. Currently, there are no approved therapies indicated to treat AH, and patients must rely on supportive care such as corticosteroids, which are often inadequate for long-term treatment and result in about 30% mortality within 90 days of hospitalization. A registrational Phase 3 program is currently being planned to evaluate the safety and efficacy of larsucosterol for the treatment of patients with severe AH.

"We are pleased to complete the acquisition of DURECT, which brings larsucosterol into our hepatology pipeline as a promising advanced-stage therapy," said Thomas J. Appio, Chief Executive Officer, Bausch Health. "There is an urgent need for treatments for alcohol-associated hepatitis, a disease that leads to a significant number of hospitalizations each year. This addition supports our ongoing efforts to develop innovative therapies for liver diseases with limited or no current treatment options. The acquisition aligns with our strategic focus on purposeful R&D and advancing solutions in areas of unmet medical need."

The tender offer for all outstanding shares of DURECT expired at 5:00 p.m., New York City time, on September 10, 2025. Equiniti Trust Company, LLC, the depositary for the tender offer, has advised Bausch Health that approximately 19,984,767 shares of DURECT common stock were validly tendered and not properly withdrawn in the tender offer, representing approximately 62% of the then-outstanding shares of DURECT's common stock. All of the conditions to the tender offer have been satisfied, and on September 11, 2025, a wholly owned subsidiary of Bausch Health ("Merger Sub") accepted for payment and will as promptly as practicable pay for all shares validly tendered and not properly withdrawn in the tender offer. Following the consummation of the tender offer, Merger Sub merged with and into DURECT in accordance with Section 251(h) of the Delaware General Corporation Law without a vote of DURECT stockholders (the "Merger"), with DURECT continuing as the surviving corporation in the Merger under the name DURECT Corporation. In the Merger, shares of DURECT that were not tendered in the tender offer were converted into the right to receive $1.75 per share in cash plus one CVR.

Following the closing of the tender offer and Merger, DURECT Corporation became a wholly owned subsidiary of Bausch Health. Prior to the opening of trading on The Nasdaq Stock Market LLC ("Nasdaq") on September 11, 2025, all shares of DURECT common stock will cease trading on Nasdaq, and DURECT intends to promptly cause such shares to be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended.

Advisors

Centerview Partners LLC acted as exclusive financial advisor and Sullivan & Cromwell LLP acted as legal advisor to Bausch Health. Locust Walk acted as exclusive financial advisor and Orrick, Herrington & Sutcliffe LLP acted as legal advisor to DURECT.

About Bausch Health
Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC), is a global, diversified pharmaceutical company enriching lives through our relentless drive to deliver better health care outcomes. We develop, manufacture and market a range of products primarily in gastroenterology, hepatology, neurology, dermatology, dentistry, aesthetics, international pharmaceuticals and eye health, through our controlling interest in Bausch + Lomb Corporation. Our ambition is to be a globally integrated healthcare company, trusted and valued by patients, HCPs, employees and investors. Our gastroenterology business, Salix Pharmaceuticals, is one of the largest specialty pharmaceutical businesses in the world and has licensed, developed and marketed innovative products for the treatment of gastrointestinal diseases for more than 30 years. For more information about Salix, visit www.Salix.com and connect with us on Twitter and LinkedIn. For more information about Bausch Health, visit www.bauschhealth.com and connect with us on LinkedIn.

About DURECT Corporation
DURECT Corporation is a late-stage biopharmaceutical company pioneering the development of epigenetic therapies that target dysregulated DNA methylation to transform the treatment of serious and life-threatening conditions, including acute organ injury. Larsucosterol, DURECT's lead drug candidate, binds to and inhibits the activity of DNA methyltransferases, epigenetic enzymes that are elevated and associated with hypermethylation found in AH patients. Larsucosterol is in clinical development for the potential treatment of AH, for which the FDA has granted a Fast Track and a Breakthrough Therapy designation; MASH has also been explored. For more information about DURECT, please visit www.durect.com and follow DURECT on X (formerly Twitter) at https://x.com/DURECTCorp.

Forward Looking Statements
This news release may contain forward-looking statements about the proposed transaction with DURECT and the future performance of Bausch Health (Bausch Health and DURECT, collectively, "the Parties"), which may generally be identified by the use of the words "anticipates," "hopes," "expects," "intends," "plans," "should," "could," "would," "may," "believes," "subject to" and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Actual results are subject to other risks and uncertainties that relate more broadly to the Parties' overall businesses, including those more fully described in the Parties' most recent annual reports on Form 10-K and quarterly reports on Form 10-Q and detailed from time to time in the Parties' other filings with the U.S. Securities and Exchange Commission and, in the case of Bausch Health, the Canadian Securities Administrators, which factors are incorporated herein by reference. In addition, such risks and uncertainties include, but are not limited to, the following: uncertainties relating to the success of larsucosterol and its path to regulatory approval; achievement of the net sales milestone payments; reliance on third parties, which increases the risk that submissions for regulatory approval of larsucosterol may be delayed or that we will not have sufficient quantities of larsucosterol available at an acceptable cost, which could delay, prevent or impair our development and commercialization efforts of larsucosterol; future clinical trials for larsucosterol may be delayed and may not demonstrate efficacy or safety; and open-label trials of larsucosterol in AH have inherent limitations. Additional information regarding certain of these material factors and assumptions may be found in the Parties' filings described above. These forward-looking statements speak only as of the date hereof. The Parties undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law.

Investor Contact: Garen Sarafian ir@bauschhealth.com (877) 281-6642 (toll free)

Media Contact: Katie Savastano corporate.communications@bauschhealth.com (908) 569-3692

SOURCE: Bausch Health Companies Inc.

View the original press release on ACCESS Newswire

FAQ

How much did Bausch Health pay to acquire DURECT Corporation?

Bausch Health paid $1.75 per share in cash, totaling approximately $63 million upfront, with potential additional milestone payments of up to $350 million based on net sales achievements.

What is the main asset Bausch Health acquired from DURECT?

The main asset acquired is larsucosterol, an FDA Breakthrough Therapy-designated epigenetic modulator for treating alcohol-associated hepatitis (AH), which currently has no approved treatments.

What percentage of DURECT shares were tendered in BHC's acquisition?

Approximately 19,984,767 shares were validly tendered, representing about 62% of DURECT's outstanding common stock.

What is the current status of larsucosterol's development?

Larsucosterol is preparing for a registrational Phase 3 clinical trial to evaluate its safety and efficacy in treating severe alcohol-associated hepatitis.

How will the DURECT acquisition impact Bausch Health's business?

The acquisition strengthens Bausch Health's hepatology pipeline by adding a late-stage breakthrough therapy for alcohol-associated hepatitis, expanding their presence in liver disease treatments with significant market potential.