Note 2. Strategic Agreements

The collaborative research and development and other revenues associated with the Company’s collaborators or counterparties were $428,000 and $749,000 for the three and six months ended June 30, 2025, respectively, compared with $606,000 and $1.1 million for the corresponding periods in 2024. The collaborative research and development and other revenue included (a) amounts related to earn-out revenue from Indivior UK Limited (“Indivior”) with respect to PERSERIS net sales, (b) research and development activities funded by our collaborators or counterparties and (c) royalty revenue from Orient Pharma Co., Ltd. (“Orient Pharma”) with respect to Methydur net sales.

Pending Acquisition by Bausch Health Companies Inc.

On July 29, 2025, Bausch Health Companies Inc. and DURECT announced a definitive agreement under which Bausch Health will indirectly acquire DURECT. Under the terms of the definitive agreement, a wholly owned subsidiary of Bausch Health is conducting a tender offer to acquire all outstanding shares of DURECT. Under the terms of the definitive agreement, Bausch Health will pay $1.75 per share in an all-cash transaction for an upfront consideration of approximately $63 million at closing, with 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 of larsucosterol in the United States and December 31, 2045. The transaction is conditioned on a majority of the outstanding shares of DURECT’s common stock being tendered into the tender offer and not withdrawn, as well as other customary closing conditions. The transaction is expected to close in the third quarter of 2025. Assuming the closing of the tender offer, Bausch Health will acquire any shares of DURECT not tendered into the tender offer through a merger of a wholly owned subsidiary with and into DURECT for the same per share consideration payable in the tender offer. For additional information, see Note 11, “Subsequent Events” to the financial statements in this Quarterly Report on Form 10-Q.

Agreement with Innocoll

On December 21, 2021, the Company entered into a license agreement (as amended, the “Innocoll Agreement”) with Innocoll Pharmaceuticals Limited (“Innocoll”). Pursuant to the Innocoll Agreement, the Company granted Innocoll an exclusive, royalty-bearing, sublicensable right and license to develop, manufacture and commercialize in the United States, POSIMIR®, the Company’s FDA-approved post-surgical pain product, with respect to all uses and applications in humans. None of the additional milestones under the agreement have been met. On May 6, 2025, Innocoll terminated the Innocoll Agreement and transferred all data and know-how related to POSIMIR to the Company. The Company is evaluating next steps with respect to finding a new partner to commercialize POSIMIR. The Company does not expect that this termination will have a material impact on its financial statements.

Patent Purchase Agreement with Indivior

In September 2017, the Company entered into an agreement with Indivior (the “Indivior Agreement”), under which the Company assigned to Indivior certain patents that may provide further intellectual property protection for PERSERIS, Indivior’s extended-release injectable suspension for the treatment of schizophrenia in adults. In consideration for such assignment, Indivior made non-refundable upfront and milestone payments to DURECT totaling $17.5 million. Additionally, under the terms of the agreement with Indivior, the Company receives quarterly earn-out payments into 2026 that are based on a single digit percentage of U.S. net sales of PERSERIS. Indivior commercially launched PERSERIS in the U.S. in February 2019. The Indivior Agreement contains customary representations, warranties and indemnities of the parties. Amounts recognized during the three and six months ended June 30, 2025 related to earn-out revenues from PERSERIS were $324,000 and $496,000, respectively, compared with $512,000 and $934,000 for the corresponding periods in 2024, and were included in collaborative research and development and other revenue. In July 2024, Indivior announced discontinuation of sales and marketing for PERSERIS due to the highly competitive market and impending changes that are expected to intensify payor management in the treatment category in which PERSERIS participates. The Company does not expect that this discontinuation will have a material impact on its financial statements.