Initial Purchaser Exercises Option to Purchase an Additional $10 Million Of the $50 Million of 6.25% Convertible Notes

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CUPERTINO, Calif., Jul 11, 2003 /PRNewswire-FirstCall via COMTEX/ — DURECT Corporation
(Nasdaq: DRRX) announced today that the initial purchaser of $50 million of
its 6.25% Convertible Notes due 2008 has elected to exercise its option to
purchase an additional $10 million principal amount of such Notes. As a
result, the final aggregate principal amount of the offering of the Notes will
be $60 million. These Notes will be convertible into DURECT Corporation
common stock at a conversion price of $3.15 per share (reflecting a premium of
25%, relative to the NASDAQ closing price for DURECT common stock of $2.52 on
June 12, 2003), and will bear interest at a rate of 6.25% per annum. The
placement of the notes is expected to close on July 14, 2003.

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As previously announced, DURECT expects to use the net proceeds of the
offering to fund the research, development, manufacture and commercialization
of existing and future products and for general corporate purposes. The
offering is being made by means of an offering memorandum to qualified
institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as

The Notes and common stock issuable upon conversion of the Notes have not
been registered under the Securities Act of 1933, as amended, or applicable
state securities laws, and unless so registered, may not be offered or sold in
the United States, except pursuant to an applicable exemption from the
registration requirements of the Securities Act of 1933, as amended, and
applicable state securities laws.

This press release shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy the
Notes. This press release is being issued pursuant to and in accordance with
Rule 135c under the Securities Act of 1933, as amended.

The statements in this press release regarding DURECT’s financing
activities 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 raise additional capital. 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, 2002 filed with the
SEC on March 14, 2003, DURECT’s Quarterly Report on Form 10Q and other
periodic reports filed with the SEC under the heading “Factors that may affect
future results.”


Schond L. Greenway
Senior Director, Investor Relations and
Strategic Planning of DURECT Corporation
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