Key Takeaways
- Strategic Acquisition: Bausch Health will acquire DURECT Corporation for $63 million upfront, with potential milestone payments of up to $350 million, expanding its late-stage liver disease pipeline.
- Focus on Unmet Need: Larsucosterol, a novel epigenetic modulator with Breakthrough Therapy Designation, is being advanced to a Phase III trial for alcoholic hepatitis, a condition with no approved treatments.
- Pipeline Synergy: The deal complements Bausch’s ongoing Phase III program for rifaximin SSD in cirrhotic patients and reinforces the company’s broader investment in hepatology R&D.
Bausch Health has announced a definitive agreement to acquire DURECT Corporation, strengthening its hepatology portfolio through the addition of larsucosterol, a novel, epigenetic modulator in late-stage development for alcoholic hepatitis (AH). According to the company, larsucosterol has shown promise in Phase II trials and has been granted FDA Breakthrough Therapy Designation (BTD).
Under terms of the deal, Bausch Health will pay $1.75 per share in cash for a total of $63 million upfront, with additional potential milestone payments of up to $350 million if the milestone is achieved before either the 10-year anniversary of the first commercial sale in the United States or December 31, 2045, whichever occurs earlier.1
Why is Bausch Health Betting on larsucosterol to Address a Critical Gap in Liver Disease Treatment?
"This announcement is fundamental progress on our Strategic Priority—Innovation, which is to intensify focus and operating rigor behind R&D and business development and demonstrates our commitment to hepatology and finding new ways to address unmet medical needs, living our purpose of enriching lives through our relentless drive to deliver better health outcomes for patients,” said Thomas J. Appio, CEO, Bausch Health, in a press release.
Registrational Trial Plans Underway
A registrational Phase III trial is being planned to assess the safety and efficacy of larsucosterol in patients with severe AH. According to Bausch Health, the multi-center study will be randomized, double-blind, and placebo-controlled, with 90-day survival set as the primary endpoint. The trial design will reflect FDA input provided during a Type B meeting under the BTD.1
“There is a significant unmet need in the treatment of patients with AH given the high mortality rate and that there are no currently approved treatments,” said Jonathan Sadeh MD, MSc, EVP, chief medical officer, head of R&D, Bausch Health, in the press release. “We are very excited to add larsucosterol, an asset which has FDA [BTD], to our pipeline, particularly as it builds on our existing expertise within the hepatology space. It is complementary to our ongoing Phase III program of soluble solid dispersion of rifaximin (rifaximin SSD) being studied in cirrhotic patients globally.”
Strategic Context
In January, Bausch + Lomb, a subsidiary of Bausch Health, announced that it had acquired Whitecap Biosciences, a company currently developing two potential therapies for use in glaucoma and geographic atrophy.2
Long-Term Potential
According to Bausch Health, AH led to approximately 164,000 hospital admissions in the United States in 2021. Currently, there are no approved treatments for AH globally.1
“AH, by our estimates, is responsible for about 100 deaths per day in the US and billions of dollars in healthcare costs,” stated James E. Brown, DVM, president, CEO, DURECT, in the press release. “Since we reported results from our Phase IIb AHFIRM clinical trial for larsucosterol in AH, our primary focus has been advancing larsucosterol towards the completion of clinical development. We chose this transaction with Bausch Health because we believe it provides significant value for our stakeholders, both immediately and in the long term, should larsucosterol be approved and achieve commercial success.
“We view Bausch Health as the right partner to advance larsucosterol due to their expertise in hepatology, commercial success with Xifaxan and experienced development team. We look forward to the potential impact larsucosterol could have for patients with AH and the medical community that cares for them. Thank you to our team at DURECT and our partners that have helped advance larsucosterol to this point."
References
- Bausch Health to Acquire DURECT Corporation, Strengthening Commitment to Developing Innovative Solutions for Patients with Liver Disease. Bausch Health. July 29, 2025. Accessed July 30, 2025. https://ir.bauschhealth.com/news-releases/2025/07-29-2025
- Bausch + Lomb Bolsters Pipeline with Acquisition of Whitecap Biosciences. Bausch + Lomb. January 13, 2025. Accessed July 30, 2025. https://ir.bausch.com/press-releases/bausch-lomb-bolsters-pipeline-acquisition-whitecap-biosciences?utm_source=chatgpt.com
