Collaborations

In December 2002, DURECT entered into an agreement granting Pain Therapeutics the exclusive worldwide right to develop and commercialize four oral sustained-release, abuse-deterrent opioid analgesic products based on ORADUR® technology. These products are REMOXY® (ORADUR-oxycodone), ORADUR-hydromorphone, ORADUR-oxymorphone, and ORADUR-hydrocodone. In May 2015, Pain Therapeutics sent a letter to DURECT that provided us with formal written notice regarding the termination of hydrocodone (and only hydrocodone) as a licensed product under the agreement. The letter does not alter the terms of the agreement regarding the three remaining licensed products (REMOXY, hydromorphone or oxymorphone).

Under the terms of the agreement, Pain Therapeutics paid DURECT an upfront license fee of $1.0 million, with the potential for an additional $7.2 million in performance milestone payments based on the successful development and approval of the three ORADUR-based opioids. Of these potential milestones, all $7.2 million are development-based and none are sales-based. DURECT will also receive royalties for REMOXY and the other licensed products—if commercialized—of 6.0% to 11.5% of net sales of the product, depending on sales volume.

There are various termination provisions in this agreement.

In July 2011, DURECT and Zogenix entered into an agreement (the Zogenix Agreement) for the development and commercialization of Relday™, a proprietary long-acting injectable formulation of risperidone based on DURECT’s SABER® controlled-release technology. DURECT and Zogenix had previously worked together on this product under a feasibility agreement pursuant to which DURECT’s research and development costs were reimbursed by Zogenix. Under the agreement, Zogenix will be responsible for the clinical development and commercialization of Relday, and DURECT will be responsible for non-clinical development, including formulation and CMC activities. DURECT will be reimbursed by Zogenix for its Relday-related research and development efforts.

Zogenix paid a non-refundable upfront fee to DURECT of $2.25 million in July 2011. Zogenix is obligated to pay DURECT up to $103 million in total future milestone payments with respect to Relday, subject to and upon the achievement of various development, regulatory, and sales-related milestones. Of these potential milestones, $28 million are development-based and $75 million are sales-based. Zogenix is also required to pay DURECT a mid-single-digit to low-double-digit percentage patent royalty on annual net sales of the product, determined on a jurisdiction-by-jurisdiction basis. Zogenix is further required to pay DURECT a tiered percentage of fees received in connection with any sublicense of the licensed rights.

There are various termination provisions in this agreement.

In January 2014, DURECT and Impax entered into an agreement (the Impax Agreement) granting Impax an exclusive worldwide license to develop and commercialize ELADUR®, DURECT’s investigational transdermal bupivacaine patch for the treatment of pain associated with post-herpetic neuralgia (PHN). The agreement covers the use of DURECT’s proprietary TRANSDUR® transdermal delivery technology, on which ELADUR is based, as well as other related intellectual property, and the sale of certain assets and rights related to the product. Impax will control and fund the ELADUR development and commercialization program.

In connection with the Impax Agreement, Impax paid a non-refundable upfront fee to DURECT of $2.0 million in January 2014. Impax agreed to make contingent cash payments to DURECT of up to $61.0 million, based upon the achievement of predefined milestones, of which $31.0 million are development-based and $30.0 million are sales-based. Upon first commercialization of ELADUR by Impax, DURECT will also receive a tiered mid-single-digit to low-double-digit royalty on annual net product sales, determined on a country-by-country basis. Impax is also required to pay DURECT a percentage of fees received in connection with any sublicense of the licensed rights.

There are various termination provisions in this agreement.

In December 2014, DURECT and Santen entered into an agreement (the Santen Agreement) granting Santen an exclusive worldwide license to develop and commercialize a sustained-release injectable ophthalmology product utilizing DURECT’s proprietary SABER® technology and other intellectual property. Santen will control and fund the development and commercialization program for this product. The parties will establish a joint management committee to oversee, review, and coordinate development activities.

In accordance with the Santen agreement, Santen paid DURECT an upfront fee of $2.0 million and agreed to make contingent cash payments to DURECT of up to $76.0 million upon the achievement of certain milestones—of which $13.0 million are development-based and $63.0 million are commercialization-based—including requirements for the achievement of certain product sales targets. Santen will pay for a certain portion of DURECT’s costs incurred in the development of the licensed product, and if the product is commercialized, DURECT will also receive a tiered single-digit to low-double-digit royalty on annual net product sales, determined on a country-by-country basis.

There are various termination provisions in this agreement.