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DURECT Reports Positive Results from POSIDUR(TM) Phase IIb Hernia Trial, Triggering $8 million Milestone Payment from Nycomed

July 17, 2007

DURECT Corporation announced today positive results from a 122 patient Phase IIb clinical trial of POSIDUR(TM) for treatment of post-operative pain in patients undergoing inguinal hernia repair. This Phase IIb trial was designed to be the study upon which DURECT and its collaborator Nycomed would base their decision for advancing POSIDUR into Phase III clinical trials. In the trial, POSIDUR demonstrated statistically significant reductions in pain and total consumption of supplemental opioid analgesic medications versus placebo. These successful results trigger an $8 million milestone payment to be made by Nycomed to DURECT under the parties’ collaborative agreement. In preparation for the Phase III program, DURECT has scheduled an end-of-Phase II meeting with the U.S. Food and Drug Administration (FDA).

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“We believe that the results of our Phase IIb trial support the validity of our POSIDUR product concept of simultaneously relieving pain while reducing opioid consumption,” stated James Brown, President and CEO of DURECT Corporation. “Our partnership with Nycomed provides us with financial and development support along with a strong marketing presence to commercialize POSIDUR in Europe and other countries. We intend to market POSIDUR ourselves in the U.S., if approved, thus providing us with a pathway to establishing our own specialty pharmaceutical business.”

Phase IIb Inguinal Hernia Trial

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Design

The POSIDUR Phase IIb clinical trial was designed to evaluate the tolerability, activity, dose response and pharmacokinetics of POSIDUR in patients undergoing open inguinal hernia repair. The study was conducted in Australia and New Zealand as a multi-center, randomized, double blind, placebo-controlled study in 122 patients. Study patients were randomized into three treatment groups: patients that were treated with POSIDUR 2.5 mL (n=43), POSIDUR 5 mL (n=47) and placebo (n=32). The co-primary efficacy endpoints for the study were Mean Pain Intensity on Movement area under the curve (AUC), a measure of pain over a period of time, 1-72 hours post-surgery, and the proportion of patients requiring supplemental opioid analgesic medication during the study. Secondary efficacy endpoints included Mean Pain Intensity on Movement AUC over the period 1-48 hours post-surgery, mean total consumption of supplemental opioid analgesic medication, and time to first use of supplemental opioid analgesic medication. The threshold for statistical significance was considered to be at the p<0.05 level.

Results

Pain Control

In relation to the co-primary endpoint of pain reduction as measured by Mean Pain Intensity on Movement AUC 1-72 hours post-surgery, the patient group treated with POSIDUR 5 mL reported thirty-one percent (31%) less pain versus placebo (p=0.0033). A thirty-five percent (35%) reduction of pain as measured by Mean Pain Intensity on Movement AUC for the period 1-48 hours post-surgery, a secondary endpoint measure, was reported between the POSIDUR 5 mL treatment group versus placebo (p=0.0007).

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