Bausch Health Set to Acquire DURECT Corporation for $63 Million

Bausch Health Companies Inc. has announced a definitive agreement to acquire DURECT Corporation, a biopharmaceutical firm specializing in epigenetic therapies, for approximately $63 million in cash. The deal includes potential milestone payments up to $350 million, contingent upon achieving specific net sales targets. This acquisition centers on DURECT's lead asset, larsucosterol, an epigenetic modulator with FDA Breakthrough Therapy Designation for treating alcoholic hepatitis (AH).

Alcoholic hepatitis is a severe form of alcohol-associated liver disease characterized by liver inflammation and cell damage, leading to complications such as liver failure. In 2021, AH accounted for approximately 164,000 hospital admissions in the United States, with no FDA-approved therapies currently available. Larsucosterol has shown promise in addressing this significant unmet medical need.

Under the terms of the agreement, Bausch Health will pay $1.75 per share in an all-cash transaction, representing a premium of approximately 191% to DURECT's 30-day volume-weighted average trading price as of July 28, 2025. The transaction is expected to close in the third quarter of 2025, pending customary closing conditions, including a majority of DURECT's outstanding shares being tendered.

Thomas J. Appio, Chief Executive Officer of Bausch Health, emphasized the strategic importance of the acquisition, stating, "This transaction represents fundamental progress on our Strategic Priority—Innovation, which is to intensify focus and operating rigor behind R&D and business development."

Larsucosterol is an endogenous sulfated oxysterol and epigenetic modulator that inhibits DNA methyltransferases, potentially reducing cell death, lipotoxicity, and inflammation. In the Phase 2b AHFIRM trial, larsucosterol demonstrated a reduction in 90-day mortality among U.S. patients by 57% and 58% for the 30 mg and 90 mg doses, respectively, compared with placebo. Following discussions with the FDA, DURECT announced plans for a single Phase 3 trial enrolling 200 U.S. patients, with a 90-day survival primary endpoint. Topline results are expected within two years of trial initiation.

The acquisition complements Bausch Health's existing hepatology portfolio, which includes an ongoing Phase 3 program for rifaximin SSD in cirrhotic patients. By integrating larsucosterol into its pipeline, Bausch Health aims to strengthen its commitment to developing innovative solutions for patients with liver disease.

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

This strategic move underscores Bausch Health's dedication to addressing unmet medical needs in hepatology and its commitment to advancing innovative therapies for patients suffering from severe liver diseases.