DURECT Corporation Announces Acquisition of Southern BioSystems, Inc.

Apr 30, 2001, 01:00 ET from DURECT Corporation

    CUPERTINO, Calif., April 30 /PRNewswire/ --
 DURECT Corporation (Nasdaq:   DRRX) announced today that it has acquired
 Southern BioSystems, Inc. ("SBS"), a privately held company located in
 Birmingham, Alabama. SBS develops, manufactures and sells biodegradable
 polymer and non-polymer drug delivery systems. SBS also provides bulk supply
 of biodegradable polymer for seven FDA approved products sold by five
 customers.
     Under the terms of the acquisition, DURECT is issuing 1,350,560 shares of
 common stock, and will issue up to 724,856 additional shares of common stock
 upon the exercise of outstanding SBS options and warrants, in exchange for all
 of SBS's outstanding equity interests.  DURECT is also assuming approximately
 $1.7 million in debt. As a result of the acquisition, SBS is a wholly owned
 subsidiary of DURECT. DURECT will register the shares issued in connection
 with the acquisition for resale with the Securities and Exchange Commission in
 the fourth quarter of 2001.  The terms of the transaction may require DURECT
 to increase the total number of shares of DURECT common stock issued to former
 SBS equity holders at the time the registration statement is filed, if
 necessary, so that the total consideration received by the former SBS equity
 holders, on a fully diluted basis, is valued at approximately $25 million,
 based on the price of DURECT common stock in the period of time before the
 registration statement is filed. The transaction is intended to qualify as a
 tax-free reorganization and is being accounted for using the purchase method
 of accounting.
     As part of this acquisition, DURECT has acquired intellectual property,
 including 3 issued U.S. patents, covering SBS's proprietary drug delivery
 technologies.  SBS has three drug delivery platforms, the SABER(TM) delivery
 system, microspheres and drug-loaded implants, as well as ongoing product
 development programs. The SABER(TM) technology is a patented and versatile
 depot technology with a simple manufacturing process. SABER(TM) is intended to
 be injected subcutaneously as a liquid, via a needle and syringe, and remains
 in a highly viscous liquid form following injection to conform to body shape.
 SBS has existing collaborations and active human therapeutic development
 programs in place with a number of pharmaceutical companies, including Purdue
 Pharma L.P., AstraZeneca, Alcon and others.  SBS also has several animal
 therapeutic collaborations in place.
     "This acquisition continues our strategy to expand the breadth of our drug
 delivery capabilities. With this acquisition, we have added three additional
 drug delivery platforms, the SABER(TM) delivery system, microspheres and drug-
 loaded implants, which will allow us to move additional products into
 development. These technology platforms, which enable delivery of drugs from
 days to months, are very complementary to our existing DUROS(R) business,
 which has a therapeutic delivery profile from months to a year," stated Dr.
 James E. Brown, CEO of DURECT.
     "We are pleased to be associated with a core team of technical experts at
 the forefront of depot technology development," stated Dr. Felix Theeuwes,
 Chairman and Chief Scientific Officer of DURECT. "We believe that the
 SABER(TM) technology has the potential to make significant impacts in the
 treatment of chronic debilitating diseases and may in the future enable many
 biotechnology drugs to reach the marketplace in a superior dosage form.
 Ultimately, this could lead to improved therapy for patients. The SABER
 platform is a highly lipophilic, non-polymer depot that has shown reduced
 initial drug release upon injection and improved release profile, and may
 provide a less painful administration when compared to alternative polymer
 based products on the market today such as human growth hormone or leuprolide
 for prostate cancer. As a result of this acquisition, we will initiate
 development on additional protein-based therapeutic candidates."
     "We are very excited with the added expertise that DURECT brings to the
 SBS technology business. Given the resource base at DURECT in product
 development, clinical expertise, manufacturing, and financing, we look forward
 to expanding our development efforts and accelerating our business plan for
 both partner and internal development programs," said Dr. Wallace Smith, Chief
 Executive Officer of SBS.
     As a result of this acquisition, DURECT plans to increase spending on
 additional research and development programs.  DURECT expects the increased
 spending to have a neutral impact to DURECT's future break-even profitability,
 which is anticipated for 2004.
 
     About DURECT Corporation:
     DURECT Corporation is pioneering the development and commercialization of
 pharmaceutical systems to deliver the right drug to the right site in the
 right amount at the right time. DURECT's pharmaceutical systems combine
 technology innovations from the medical device and drug delivery industries
 with proprietary pharmaceutical and biotechnology drug formulations. These
 capabilities can enable new drug therapies or optimize existing therapies
 based on a broad range of compounds, including small molecule pharmaceuticals
 as well as biotechnology molecules such as proteins, peptides and genes.
     DURECT's lead product in development, DUROS sufentanil, is designed to
 deliver sufentanil on a continuous basis for 3 months for the treatment of
 chronic pain.  Sufentanil is a FDA approved opioid that is currently used in
 hospitals as an anesthetic.  Chronic pain is a significant problem associated
 with chronic diseases, including cancer and various neurological and skeletal
 disorders.  DUROS sufentanil is intended for patients whose chronic pain is
 stable, opioid responsive and results from a variety of malignant and non-
 malignant causes.  Annual sales of opioids for the treatment of chronic pain
 exceed $1 billion.
     In addition to DUROS sufentanil, DURECT's second product in development,
 DUROS hydromorphone, continuously delivers hydromorphone to the spine. DURECT
 is also selling FDA cleared catheters for the delivery of fluids to the inner
 ear. DURECT also manufactures, sells and distributes the ALZET(R) osmotic pump
 product for use in laboratory research.
     Founded in 1998, DURECT is headquartered in Cupertino, CA. The company's
 World Wide Web site can be accessed at http://www.durect.com. The company's
 World Wide Web site for ALZET osmotic pumps and IntraEAR can be accessed at
 http://www.alzet.com and http://www.intraear.com, respectively. To join
 DURECT's email alert service, please register by selecting "Email Alerts" on
 the main Investor Relations web page at http://www.durect.com.
     DUROS is a registered trademark of ALZA Corporation.
 
     About Southern BioSystems, Inc.:
     Southern BioSystems, Inc. ("SBS") researches, develops and manufactures
 controlled-release drug delivery products to help clients commercialize human
 and veterinary pharmaceuticals.  SBS has three drug-delivery platforms: the
 proprietary SABER(TM) delivery system, microspheres and drug-loaded implants.
     SABER(TM) is a biodegradable highly viscous liquid that can be formulated
 for oral, parenteral dermal or other routes of administration. SBS has the
 capabilities to formulate microspheres for oral, parenteral dermal or other
 routes of administration. SBS also develops drug-loaded implants and, through
 its subsidiary Birmingham Polymers, also manufactures biodegradable polymers.
     The company's World Wide Web site can be accessed at
 http://www.southernbiosystems.com.
      SABER(TM) is a trademark of Southern BioSystems, Inc., a subsidiary of
 DURECT Corporation.
 
     The statements in this press release regarding DURECT's products in
 development, product development plans, expected product benefits, anticipated
 spending or financial results are forward-looking statements involving risks
 and uncertainties that could cause actual results to differ materially from
 those in such forward-looking statements. Potential risks and uncertainties
 include, but are not limited to, DURECT's ability to develop, manufacture and
 commercialize its products, complete successful clinical trials, obtain
 product approvals from regulatory agencies, build a manufacturing facility,
 manage its growth and costs, as well as marketplace acceptance of DURECT's
 products. Further information regarding these and other risks is included in
 the company's S-1 registration statement, filed with the SEC on September 22,
 2000, 424(b) prospectus filed with the SEC on September 28, 2000, Quarterly
 Report on Form 10Q for the quarter ended September 30, 2000 filed with the SEC
 on November 14, 2000 and Annual Report on Form 10K for the fiscal year ended
 December 31, 2000 filed with the SEC on March 30, 2001.
 
     Contact:  Schond L. Greenway, Director, Investor Relations of DURECT
 Corporation, 408-777-1417, schond.greenway@durect.com
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X40707362
 
 

SOURCE DURECT Corporation
    CUPERTINO, Calif., April 30 /PRNewswire/ --
 DURECT Corporation (Nasdaq:   DRRX) announced today that it has acquired
 Southern BioSystems, Inc. ("SBS"), a privately held company located in
 Birmingham, Alabama. SBS develops, manufactures and sells biodegradable
 polymer and non-polymer drug delivery systems. SBS also provides bulk supply
 of biodegradable polymer for seven FDA approved products sold by five
 customers.
     Under the terms of the acquisition, DURECT is issuing 1,350,560 shares of
 common stock, and will issue up to 724,856 additional shares of common stock
 upon the exercise of outstanding SBS options and warrants, in exchange for all
 of SBS's outstanding equity interests.  DURECT is also assuming approximately
 $1.7 million in debt. As a result of the acquisition, SBS is a wholly owned
 subsidiary of DURECT. DURECT will register the shares issued in connection
 with the acquisition for resale with the Securities and Exchange Commission in
 the fourth quarter of 2001.  The terms of the transaction may require DURECT
 to increase the total number of shares of DURECT common stock issued to former
 SBS equity holders at the time the registration statement is filed, if
 necessary, so that the total consideration received by the former SBS equity
 holders, on a fully diluted basis, is valued at approximately $25 million,
 based on the price of DURECT common stock in the period of time before the
 registration statement is filed. The transaction is intended to qualify as a
 tax-free reorganization and is being accounted for using the purchase method
 of accounting.
     As part of this acquisition, DURECT has acquired intellectual property,
 including 3 issued U.S. patents, covering SBS's proprietary drug delivery
 technologies.  SBS has three drug delivery platforms, the SABER(TM) delivery
 system, microspheres and drug-loaded implants, as well as ongoing product
 development programs. The SABER(TM) technology is a patented and versatile
 depot technology with a simple manufacturing process. SABER(TM) is intended to
 be injected subcutaneously as a liquid, via a needle and syringe, and remains
 in a highly viscous liquid form following injection to conform to body shape.
 SBS has existing collaborations and active human therapeutic development
 programs in place with a number of pharmaceutical companies, including Purdue
 Pharma L.P., AstraZeneca, Alcon and others.  SBS also has several animal
 therapeutic collaborations in place.
     "This acquisition continues our strategy to expand the breadth of our drug
 delivery capabilities. With this acquisition, we have added three additional
 drug delivery platforms, the SABER(TM) delivery system, microspheres and drug-
 loaded implants, which will allow us to move additional products into
 development. These technology platforms, which enable delivery of drugs from
 days to months, are very complementary to our existing DUROS(R) business,
 which has a therapeutic delivery profile from months to a year," stated Dr.
 James E. Brown, CEO of DURECT.
     "We are pleased to be associated with a core team of technical experts at
 the forefront of depot technology development," stated Dr. Felix Theeuwes,
 Chairman and Chief Scientific Officer of DURECT. "We believe that the
 SABER(TM) technology has the potential to make significant impacts in the
 treatment of chronic debilitating diseases and may in the future enable many
 biotechnology drugs to reach the marketplace in a superior dosage form.
 Ultimately, this could lead to improved therapy for patients. The SABER
 platform is a highly lipophilic, non-polymer depot that has shown reduced
 initial drug release upon injection and improved release profile, and may
 provide a less painful administration when compared to alternative polymer
 based products on the market today such as human growth hormone or leuprolide
 for prostate cancer. As a result of this acquisition, we will initiate
 development on additional protein-based therapeutic candidates."
     "We are very excited with the added expertise that DURECT brings to the
 SBS technology business. Given the resource base at DURECT in product
 development, clinical expertise, manufacturing, and financing, we look forward
 to expanding our development efforts and accelerating our business plan for
 both partner and internal development programs," said Dr. Wallace Smith, Chief
 Executive Officer of SBS.
     As a result of this acquisition, DURECT plans to increase spending on
 additional research and development programs.  DURECT expects the increased
 spending to have a neutral impact to DURECT's future break-even profitability,
 which is anticipated for 2004.
 
     About DURECT Corporation:
     DURECT Corporation is pioneering the development and commercialization of
 pharmaceutical systems to deliver the right drug to the right site in the
 right amount at the right time. DURECT's pharmaceutical systems combine
 technology innovations from the medical device and drug delivery industries
 with proprietary pharmaceutical and biotechnology drug formulations. These
 capabilities can enable new drug therapies or optimize existing therapies
 based on a broad range of compounds, including small molecule pharmaceuticals
 as well as biotechnology molecules such as proteins, peptides and genes.
     DURECT's lead product in development, DUROS sufentanil, is designed to
 deliver sufentanil on a continuous basis for 3 months for the treatment of
 chronic pain.  Sufentanil is a FDA approved opioid that is currently used in
 hospitals as an anesthetic.  Chronic pain is a significant problem associated
 with chronic diseases, including cancer and various neurological and skeletal
 disorders.  DUROS sufentanil is intended for patients whose chronic pain is
 stable, opioid responsive and results from a variety of malignant and non-
 malignant causes.  Annual sales of opioids for the treatment of chronic pain
 exceed $1 billion.
     In addition to DUROS sufentanil, DURECT's second product in development,
 DUROS hydromorphone, continuously delivers hydromorphone to the spine. DURECT
 is also selling FDA cleared catheters for the delivery of fluids to the inner
 ear. DURECT also manufactures, sells and distributes the ALZET(R) osmotic pump
 product for use in laboratory research.
     Founded in 1998, DURECT is headquartered in Cupertino, CA. The company's
 World Wide Web site can be accessed at http://www.durect.com. The company's
 World Wide Web site for ALZET osmotic pumps and IntraEAR can be accessed at
 http://www.alzet.com and http://www.intraear.com, respectively. To join
 DURECT's email alert service, please register by selecting "Email Alerts" on
 the main Investor Relations web page at http://www.durect.com.
     DUROS is a registered trademark of ALZA Corporation.
 
     About Southern BioSystems, Inc.:
     Southern BioSystems, Inc. ("SBS") researches, develops and manufactures
 controlled-release drug delivery products to help clients commercialize human
 and veterinary pharmaceuticals.  SBS has three drug-delivery platforms: the
 proprietary SABER(TM) delivery system, microspheres and drug-loaded implants.
     SABER(TM) is a biodegradable highly viscous liquid that can be formulated
 for oral, parenteral dermal or other routes of administration. SBS has the
 capabilities to formulate microspheres for oral, parenteral dermal or other
 routes of administration. SBS also develops drug-loaded implants and, through
 its subsidiary Birmingham Polymers, also manufactures biodegradable polymers.
     The company's World Wide Web site can be accessed at
 http://www.southernbiosystems.com.
      SABER(TM) is a trademark of Southern BioSystems, Inc., a subsidiary of
 DURECT Corporation.
 
     The statements in this press release regarding DURECT's products in
 development, product development plans, expected product benefits, anticipated
 spending or financial results are forward-looking statements involving risks
 and uncertainties that could cause actual results to differ materially from
 those in such forward-looking statements. Potential risks and uncertainties
 include, but are not limited to, DURECT's ability to develop, manufacture and
 commercialize its products, complete successful clinical trials, obtain
 product approvals from regulatory agencies, build a manufacturing facility,
 manage its growth and costs, as well as marketplace acceptance of DURECT's
 products. Further information regarding these and other risks is included in
 the company's S-1 registration statement, filed with the SEC on September 22,
 2000, 424(b) prospectus filed with the SEC on September 28, 2000, Quarterly
 Report on Form 10Q for the quarter ended September 30, 2000 filed with the SEC
 on November 14, 2000 and Annual Report on Form 10K for the fiscal year ended
 December 31, 2000 filed with the SEC on March 30, 2001.
 
     Contact:  Schond L. Greenway, Director, Investor Relations of DURECT
 Corporation, 408-777-1417, schond.greenway@durect.com
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X40707362
 
 SOURCE  DURECT Corporation