We are developing a transdermal bupivacaine patch (ELADUR) based on our proprietary TRANSDUR transdermal technology intended to provide continuous delivery of bupivacaine for up to three days from a single application, as compared to a wearing time limited to 12 hours with currently available lidocaine patches. We anticipate that ELADUR will have several potential differentiating attributes compared with currently marketed lidocaine patches, including extended duration of action and better wearability.

Market Opportunity
A debilitating complication of herpes zoster is Post-Herpetic Neuralgia, which is usually defined as the presence of pain at the site of eruption that last more than a month after the onset of zoster eruption. Within the affected skin supplied by the nerve root, patients have a variety of sensory abnormalities in addition to neuropathic pain. Pain can persist for months and occasionally years.

In September 2008, we entered into a development and license agreement with Alpharma Ireland Ltd., an affiliate of Alpharma, Inc., granting such party the exclusive worldwide rights to develop and commercialize ELADUR. Alpharma, Inc. is a global specialty pharmaceutical company with a growing branded franchise in the U.S. pain market. This agreement became effective in October 2008 after passing clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under this agreement, Alpharma paid us an upfront license fee of $20 million in the fourth quarter of 2008, with possible additional payments of up to $93 million upon the achievement of predefined development and regulatory milestones spread over multiple clinical indications and geographical territories as well as possible additional payments of up to $150 million in sales based milestones. If ELADUR is commercialized, DURECT would also receive royalties on product sales. Alpharma will control and fund the further development program. Alpharma was acquired by King Pharmaceuticals in December 2008 and, as a result, the rights and obligations of our agreement are now controlled by King.

Expected Product Benefits:

• Longer duration of action, as compared to the 12 hours of relief provided with currently available lidocaine patches;
• Fast onset time;
• Potentially deeper tissue penetration of bupivacaine versus lidocaine patches.

Current Clinical Status
This investigational drug is currently in Phase II. Phase II results are not necessarily predictive of the results of Phase III trials. There have been numerous drug candidates that have succeeded in Phase II clinical trials that have later failed in Phase III clinical trials.

In 2007, we successfully completed a 60 patient Phase IIa clinical trial for ELADUR. In this study of patients suffering from PHN, ELADUR showed improved pain control versus placebo during the 3-day continuous treatment period. In addition, ELADUR appeared well tolerated overall, and patients treated with ELADUR and placebo exhibited similar safety profiles. In 2008, we conducted manufacturing scale-up and processing studies to secure additional Phase II and Phase III supplies and developed our clinical and regulatory strategy for further development of this program.

To review data on ELADUR reported at the American Pain Society 27th Annual meeting, click here.