Pfizer Terminates Development and License Agreement Between Alpharma Ireland and DURECT

On February 28, 2012, Pfizer Inc. PFE notified DURECT Corporation, a Delaware corporation DRRX, that Pfizer is terminating, effective August 30, 2012, the Development and License Agreement between Alpharma Ireland Limited and DURECT dated September 19, 2008 relating to the worldwide development and commercialization of ELADUR® , DURECT's transdermal bupivacaine patch. Pfizer acquired these rights to this agreement through its acquisition of King Pharmaceuticals, which in turn had acquired Alpharma. Pfizer's termination returns to DURECT the rights to develop and commercialize ELADUR worldwide. Pfizer has committed to assist in an orderly and rapid transition of this program back to DURECT. Under the License Agreement, Alpharma will assign to DURECT all regulatory documentation and development data developed by Alpharma related to ELADUR, and DURECT is obligated to pay future royalties to Alpharma based on sales or licensing of ELADUR up to the amount of Alpharma's direct out-of-pocket costs and expenses incurred to generate development data assigned to DURECT. Under the terms of the License Agreement, Alpharma paid DURECT an upfront license fee of $20 million, with the potential of an additional $243 million in performance milestone payments based on the successful development, approval and commercialization of ELADUR in multiple territories and with multiple indications as defined in the agreement. Of these potential milestones, $93 million were development-based milestones (none of which were achieved), and $150 million were sales-based milestones (none of which were achieved). DURECT would also have received royalties on product sales of ELADUR. Alpharma also reimbursed DURECT for development costs incurred by DURECT for ELADUR.