Bausch Health to acquire DURECT for $63 million upfront

LAVAL, QUEBEC/CUPERTINO, CALIFORNIA - Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) announced Tuesday it has entered into a definitive agreement to acquire DURECT Corporation (NASDAQ:DRRX) in a deal valued at up to $413 million, gaining access to larsucosterol, a potential treatment for alcoholic hepatitis. According to InvestingPro data, DURECT currently maintains a market capitalization of $17.16 million and generated revenues of $1.86 million in the last twelve months.

Under the agreement, Bausch Health will pay $1.75 per share in cash, representing a 217% premium to DURECT’s closing price on July 28, for an upfront payment of approximately $63 million. The deal includes potential additional milestone payments of up to $350 million based on future net sales targets. InvestingPro analysis shows DURECT holds more cash than debt on its balance sheet, though the company has been rapidly burning through its cash reserves.

Larsucosterol, DURECT’s lead asset, has received FDA Breakthrough Therapy Designation for alcoholic hepatitis, a life-threatening condition with no currently approved treatments. The drug is an epigenetic modulator that has shown promising results in Phase 2 trials.

"This announcement is fundamental progress on our Strategic Priority - Innovation," said Thomas J. Appio, Chief Executive Officer of Bausch Health, in a statement based on the press release.

Alcoholic hepatitis accounted for approximately 164,000 hospital admissions in the U.S. in 2021. A registrational Phase 3 program to evaluate larsucosterol’s safety and efficacy is being planned, with 90-day survival as the primary endpoint.

The acquisition complements Bausch Health’s existing hepatology portfolio, which includes an ongoing Phase 3 program for rifaximin SSD in cirrhotic patients.

The transaction is expected to close in the third quarter of 2025, subject to customary closing conditions including the tender of a majority of DURECT’s outstanding shares.

Centerview Partners LLC is serving as financial advisor to Bausch Health, while Locust Walk is advising DURECT.

In other recent news, Bausch Health Companies Inc. has announced a definitive agreement to acquire DURECT Corporation in an all-cash transaction valued at approximately $63 million. This acquisition includes potential additional milestone payments of up to $350 million. The focus of the deal is DURECT’s lead asset, larsucosterol, which is an epigenetic modulator currently being developed for the treatment of alcoholic hepatitis. Notably, larsucosterol has received FDA Breakthrough Therapy Designation, highlighting its potential in addressing this life-threatening liver condition that currently lacks approved treatments. This acquisition reflects Bausch Health’s strategic move to expand its portfolio in the field of liver disease. The transaction is expected to enhance Bausch Health’s position in the pharmaceutical industry by integrating DURECT’s promising therapeutic developments. These recent developments underscore Bausch Health’s commitment to advancing treatment options for critical health conditions.

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