DURECT Corporation Announces Fourth Quarter and Year End 2007 Financi...(tents and patent applications as w...)

applications as well as their international counterparts. We believe

this portfolio will benefit our business by broadening our drug

delivery technology base and strengthening our intellectual property

position.

-- Reduction in Convertible Notes. We reduced the balance of our

outstanding convertible notes from $37.3 million at December 31, 2006

to $23.6 million as of December 31, 2007 by paying a small premium over

the future interest payments due on these notes in order to induce

early conversion. The outstanding convertible notes will mature on

June 15, 2008, if not converted earlier.

Financial Guidance for 2008 and Major Potential Milestones Over the Next 12-18 Months

-- Financial Guidance. Our net cash consumption is heavily influenced by

the timing and structure of new corporate collaborations, as well as

the achievement of milestones under existing collaborations. While we

anticipate entering into new collaborations in 2008 and beyond,

assuming no new collaborations, no milestone payments and aggressive

funding of our R&D programs, many of which are in clinical development,

we anticipate our net cash consumption in 2008 will be approximately

$32-36 million.

-- Business Development Activities. We have multiple late stage programs

that may potentially be partnered over the next 12-18 months. These

include ELADUR, TRANSDUR-Sufentanil for Europe and for Asia, POSIDUR

for Asia, as well as various internal programs which we have not

described publicly in detail.

-- Remoxy. Our collaborator, Pain Therapeutics, has stated that they

expect to file the NDA for Remoxy in Q2 2008.

-- POSIDUR. We are continuing our dialogue with the FDA regarding our

Phase III program, upon completion of which we plan to
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