Endo Pharmaceuticals and DURECT Corporation Agree To Collaborate on Treatment in Pain Management

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CHADDS FORD, Pa. and CUPERTINO, Calif., Nov. 11 /PRNewswire-FirstCall/ —
Endo Pharmaceuticals Holdings Inc. (Nasdaq: ENDP) and
DURECT Corporation (Nasdaq: DRRX), announced today that they have signed an
agreement to collaborate on the development and commercialization of DURECT’s
CHRONOGESIC(TM) (sufentanil) Pain Therapy System for the U.S. and Canada. The
companies believe CHRONOGESIC has significant potential to treat patients with
chronic pain resulting from a variety of malignant and non-malignant causes.
If approved, the product would represent the first systemic medication that
provides patients with uninterrupted pain treatment for three months from a
single application.

“Endo looks for innovative medicines to help patients and physicians in
need of treatment options for pain, and CHRONOGESIC represents one of the most
important potential advances in pain management,” stated Carol A. Ammon,
Chairman and Chief Executive Officer of Endo. “The collaboration with DURECT
demonstrates our continued commitment to execute our strategies for growth. We
are very excited about this opportunity and look forward to a successful
partnership with DURECT.”

“With an established commercial infrastructure, a number of gold standard
pain products and over 200 sales representatives focused on promoting
therapies for pain management, Endo is a well-established player in the pain
management arena,” stated Dr. James Brown, President and Chief Executive
Officer of DURECT. “CHRONOGESIC attracted high interest from a number of
potential partners. In the end, we selected Endo as our partner because of
their strong commitment to be a focused leader in the pain field. They have
commercial, sales and marketing executives with established track records for
successfully launching and building new ethical pharmaceutical product
businesses. Endo is a major player in the specialty pharmaceuticals business,
and CHRONOGESIC(TM) only adds to their leadership position in the pain
management arena.”

In previous clinical trials, CHRONOGESIC was shown to have an acceptable
safety and efficacy profile in over 80 patients. The CHRONOGESIC clinical
development program is on temporary hold pending agreement between DURECT and
the Food and Drug Administration (FDA) regarding additional monitoring and
data collection. These protocol changes requested by the FDA were not in
relation to any observed safety issue or adverse event. In addition, DURECT
is implementing some necessary design and manufacturing enhancements to the
CHRONOGESIC product. DURECT anticipates that the changes to the existing
clinical protocol, and the implementation of these design and manufacturing
enhancements, will delay the restart of clinical trials until the second half
of 2003.

Under the terms of the agreement, DURECT will be responsible for the
CHRONOGESIC product’s design and development. In connection with the execution
of the agreement, Endo will purchase $5.0 million of newly issued common
shares of DURECT. Once the clinical trials are restarted, Endo will fund 50%
of the ongoing development costs and will reimburse DURECT for a portion of
prior development costs upon the achievement of certain milestones. Milestone
payments made by Endo under this agreement could total up to $52 million. The
agreement also contains terms and conditions customary for this type of
arrangement, including representations, warranties, indemnities and
termination rights. For a full description of the arrangement, please see the
companies’ public filings with the Securities and Exchange Commission,
including Endo’s Form 8-K.

In addition, under the agreement, Endo has licensed exclusive promotional
rights to CHRONOGESIC in the U.S. and Canada. Endo will be responsible for
marketing, sales and distribution, including providing specialty sales
representatives dedicated to supplying technical and training support for
CHRONOGESIC therapy. DURECT will be responsible for the manufacture of
CHRONOGESIC. Endo and DURECT will share profits equally, based on projected
financial performance of CHRONOGESIC.

CHRONOGESIC is intended to target patients with opioid responsive chronic
pain that results from a variety of causes. CHRONOGESIC is designed to deliver
sufentanil continuously for three months of pain therapy. Sufentanil is an
opioid that is currently used in hospitals as an analgesic agent.

CHRONOGESIC(TM) is a miniature, self-driven titanium capsule that is
placed just under the skin, similar in size to a matchstick, from which drug
is dispensed by the natural process of osmosis at a highly controlled rate.
CHRONOGESIC is designed to address the potential problems of peaks (too much
medication) and troughs (too little medication) associated with currently
available chronic pain therapies. If approved, CHRONOGESIC will allow
physicians to prescribe, and continuously administer to patients, a fixed,
clinically meaningful baseline dose of sufentanil for moderate to severe
chronic pain for three months and may provide for less risk of potential
misuse, abuse and diversion than alternative currently available therapies for
chronic pain.

Chronic pain is a significant problem associated with chronic diseases,
including cancer and various neurological and skeletal disorders. Chronic
nonmalignant pain affects as many as 34 million Americans annually. In
addition, the National Cancer Institute estimates that 8.4 million Americans
alive today have a history of cancer. Sales of opioids for the treatment of
malignant and nonmalignant pain currently exceed $3 billion.

Endo and DURECT will conduct a joint conference call to discuss this press
release on Monday, November 11, 2002 at 5:00 p.m. EST (2:00 p.m. PST). The
call will be webcast live through DURECT’s corporate website and available for
30 days following the call. To access the webcast, please log on to the
Investor Relations site of www.www.durect.com. The domestic call-in number is
1-800-360-9865. The international call-in number is 1-973-694-6836. A
rebroadcast of the call will be available by phone for 24 hours beginning
approximately one hour after the close of the call and can be accessed at
1-800-428-6051 (passcode: 268774).

About Endo

Endo Pharmaceuticals Holdings Inc. is a fully integrated specialty
pharmaceutical company with market leadership in pain management products.
Through its Endo Pharmaceuticals Inc. subsidiary, the company researches,
develops, produces and markets a broad product offering of both branded and
generic pharmaceuticals, meeting the needs of healthcare professionals and
consumers alike. More information, including this and past press releases of
Endo Pharmaceuticals Holdings Inc., is available online at www.endo.com.

About DURECT Corporation

DURECT Corporation (www.www.durect.com) is pioneering the development and
commercialization of pharmaceutical systems for the treatment of chronic
debilitating diseases and enabling biotechnology-based pharmaceutical
products. DURECT’s goal is to deliver the right drug to the right site in the
right amount at the right time. DURECT’s lead product in development, the
CHRONOGESIC(TM) (sufentanil) Pain Therapy System, is a 3-month product for the
treatment of chronic pain. DURECT owns three proprietary drug delivery
platform technologies, including the SABER(TM) Delivery System (a patented and
versatile depot injectable useful for protein delivery), the MICRODUR(TM)
Biodegradable Microparticulates (microspheres injectable system) and the
DURIN(TM) Biodegradable Implant (drug-loaded implant system).

CHRONOGESIC(TM) is a trademark of DURECT Corporation. SABER(TM),
MICRODUR(TM) and DURIN(TM) are trademarks of Southern BioSystems, Inc., a
wholly owned subsidiary of DURECT Corporation. Other trademarks referred to
belong to their respective owners.

Endo Forward Looking Statement

This press release contains forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and projections. These statements
are subject to risks and uncertainties and, therefore, actual results may
differ materially from those expressed or implied by these forward-looking
statements. Forward-looking statements are not historical facts and include
information regarding the Company’s possible or assumed results of operations.
Also, statements or expressions that are preceded by, followed by, or that
include, the words “believes,” “anticipates,” “plans,” “expects,” “intends,”
“estimates” or similar expressions are forward-looking statements. Endo’s
estimated or anticipated future results, product performance or other non-
historical facts are forward-looking and reflect Endo’s current perspective on
existing trends and information. Many of the factors that will determine the
Company’s future results are beyond the ability of the Company to control or
predict. The reader should not rely on any forward-looking statement. The
Company undertakes no obligations to update any forward-looking statements
whether as a result of new information, future events or otherwise. Several
important factors, in addition to the specific factors discussed in connection
with these forward-looking statements individually, could affect the future
results of the Endo and could cause those results to differ materially from
those expressed in the forward-looking statements contained herein. Important
factors that may affect future results include, but are not limited to: market
acceptance of the Company’s products and the impact of competitive products
and pricing; dependence on sole source suppliers; the success of the Company’s
product development activities and the timeliness with which regulatory
authorizations and product launches may be achieved; successful compliance
with extensive, costly, complex and evolving governmental regulations and
restrictions; the availability on commercially reasonable terms of raw
materials and other third party manufactured products; exposure to product
liability and other lawsuits and contingencies; dependence on third party
suppliers, distributors and collaboration partners; the ability to timely and
cost effectively integrate acquisitions; uncertainty associated with pre-
clinical studies and clinical trials and regulatory approval; uncertainty of
market acceptance of new products; the difficulty of predicting FDA approvals;
risks with respect to technology and product development; the effect of
competing products and prices; uncertainties regarding intellectual property
protection; uncertainties as to the outcome of litigation; changes in
operating results; impact of competitive products and pricing; product
development; changes in laws and regulations; customer demand; possible future
litigation; availability of future financing and reimbursement policies of
government and private health insurers and others; and other risks and
uncertainties detailed in Endo’s Registration Statement on Form S-4 filed with
the Securities and Exchange Commission on June 9, 2000, as amended, and in
Endo’s Registration Statement on Form S-3 dated October 17, 2001. Readers
should evaluate any statement in light of these important factors.

DURECT Forward Looking Statement

The statements in this press release regarding DURECT’s products in
development, expected or potential product benefits, product development and
clinical trials plans and anticipated financial results or benefits are
forward-looking statements involving risks and uncertainties that can cause
actual results to differ materially from those in such forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
DURECT’s ability to complete the design and manufacturing process development
of its products, commercialize its products, obtain product and manufacturing
approvals from regulatory agencies, timely enroll patients and clinical sites
in connection with its clinical studies, effectively administer its clinical
trials, manage its growth and expenses, finance its activities and operations,
as well as marketplace acceptance of DURECT’s products. Further information
regarding these and other risks is included in DURECT’s Annual Report on Form
10-K for the fiscal year ended December 31, 2001 filed with the SEC on March
28, 2002, under the heading “Factors that may affect future results,” and
other periodic reports filed with the SEC. CHRONOGESIC is under development by
DURECT and has not been submitted or approved for commercialization by the US
Food and Drug Administration or other health authorities.

SOURCE DURECT Corporation; Endo Pharmaceuticals Holdings Inc.

CONTACT: Schond L. Greenway, Senior Director, Investor Relations and
Strategic Planning of DURECT Corporation, +1-408-777-1417 or
schond.greenway@durect.com; or Bill Newbould, Vice President, Corporate
Communications of Endo Pharmaceuticals, +1-610-558-9800 or

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/Web site: http://www.endo.com

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