UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities & Exchange Act of 1934
(Amendment No. __)*
Durect Corporation
(Name of Issuer)
Common Stock, $0.0001 par value
(Title of Class of Securities)
266605104
(CUSIP Number)
December 31, 2004
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which
this schedule is filed:
(X) Rule 13d-1(b)
( ) Rule 13d-1(c)
( ) Rule 13d-1(d)
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes.)
Potential persons who are to respond to the collection of information
contained in this form are not required to respond unless the form
displays a currently valid OMB control number.
CUSIP No. 266605104
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Zazove Associates, LLC 36-3984373
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) ( )
(b) ( )
3. SEC Use Only
____________________________________________________________
4. Citizenship or Place of Organization: Delaware
Number of 5. Sole Voting Power: 3,429,028 (see item 4)
Shares Bene-
ficially by 6. Shared Voting Power: 0
Owned by Each
Reporting 7. Sole Dispositive Power: 3,429,028 (see item 4)
Person With:
8. Shared Dispositive Power: 0
9. Aggregate Amount Beneficially Owned by Each Reporting Person
3,429,028 (see item 4)
10. Check if the Aggregate Amount in Row (9) Excludes Certain
Shares ( )
11. Percent of Class Represented by Amount in Row (9): 6.22%
12. Type of Reporting Person (See Instructions): IA
Item 1.
(a) Name of Issuer
Durect Corporation(the "Company")
(b) Address of Issuer's Principal Executive Offices
10240 Bubb Road, Cupertino, CA 95014
Item 2.
(a) Name of Person Filing
Zazove Associates, LLC
(b) Address of Principal Business Office or, if non,
Residence
940 Southwood, Incline Village, NV 89451
(c) Citizenship
Delaware limited liability company
(d) Title of Class of Securities
Common stock, $0.0001 par value
(e) CUSIP Number
266605104
Item 3. If this statement is filed pursuant to Sections 240.13d-1(b)
or 240.13d-2(b) or (c), check whether the person filing is a:
(a) ( ) Broker or dealer registered under section 15 of the Act
(15 U.S.C. 78o).
(b) ( ) Bank as defined in section 3(a)(6) of the Act
(15 U.S.C 78c).
(c) ( ) Insurance company as defined in section 3(a)(19) of the
Act (15 U.S.C. 78c).
(d) ( ) Investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8).
(e) (X) An investment adviser in accordance with Section
240.13d-1(b)(1)(ii)(E);
(f) ( ) An employee benefit plan or endowment fund in accordance
with Section 240.13d-1(b)(1)(ii)(F);
(g) ( ) A parent holding company or control person in accordance
with Section 240.13d-1(b)(1)(ii)(G);
(h) ( ) A savings associations as defined in Section 3(b) of
the Federal Deposit Insurance Act (12 U.S.C. 1813);
(i) ( ) A church plan the is excluded from the definition of
an investment company under section 3(c)(14) of the
Investment Company act of 1940 (15 U.S.C.)
(j) ( ) Group, in accordance with Section 240.13d-1(b)(1)
(ii)(J).
Item 4. Ownership
Provide the following information regarding the aggregate number
and percentage of the class of securities of the issuer identified in
Item 1.
(a) Amount beneficially owned:
3,429,028 shares of common stock, which includes
3,366,028 shares issuable upon the conversion of Durect
Corporation Convertible Debentures Due 06-15-08 (the
"Convertible Securities").
(b) Percent of class:
6.22%, calculated based on 55,168,793 shares of common stock
outstanding, which number is calculated by adding (i)
51,802,765 (the number of shares of common stock
outstanding as of October 29, 2004, as reported on the
Company's most recent quarterly report filed on Form 10-Q)
and (ii) 3,366,028 (the number of shares of common stock deemed
held under Rule 240.13d-3(d)(1) as a result of the beneficial
ownership of the Convertible Securities).
(c) Number of shares as to which the person has:
(i) Sole power to vote or to direct the vote: 3,429,028
(ii) Shared power to vote or to direct the vote: 0
(iii) Sole power to dispose or to direct the disposition
of: 3,429,028
(iv) Shared power to dispose or to direct the disposition
of: 0
Instruction. For computations regarding securities which
represents a right to acquire an underlying security see Section
240.13d-3(d)(1).
Item 5. Ownership of Five Percent or Less of a Class
If this statement is being filed to report the fact that as of
the date hereof the reporting person has ceased to be the beneficial
owner of more than five percent of the class of securities, check the
following ( ).
Instruction: Dissolution of a group requires a response to
this item.
Item 6. Ownership of More than Five Percent on Behalf of Another
Person.
If any other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from
the sale of, such securities, a statement to that effect should be
included in response to this item and, if such interest relates to
more than five percent of the class, such person should be
identified. A listing of shareholders of an investment
company registered under the Investment Company Act of 1940 or
the beneficiaries of employee benefit plan, pension fund or
endowment fund is not required.
The Reporting Person is registered as an investment advisor
under Section 203 of the Investment Advisors Act of 1940
(15 USC 80b-3) and has discretionary authority with regard to
certain accounts that hold Durect Corporation
common stock and Preferred Securities. No single account has
a more than 5% interest of any class of the Issuer's equity
securities.
Item 7. Identification and Classification of the Subsidiary Which
Acquired the Security Being Reported on by the Parent Holding Company
Not applicable.
If a parent holding company has filed this schedule, pursuant to
Rule 13d-1(b)(ii)(G), so indicate under Item 3(g) and attach an exhibit
stating the identity and the Item 3 classification of the relevant
subsidiary. If a parent holding company has filed this schedule
pursuant to Rule 13d-1(c) or Rule 13d-1(d), attach an exhibit
stating the identity of each member of the group.
Item 8. Identification and Classification of Members of the Group
Not applicable.
If a group has filed this schedule pursuant to Section 240.13d-
1(b)(1)(ii)(J), so indicate under Item 3(j) and attach an exhibit
stating the identity and Item 3 classification of each member of
the group. If a group has filed this schedule pursuant to Section
240.13d-1(c) or Section 240.13d-1(d), attached an exhibit stating
the identity of each member of the group.
Item 9. Notice of Dissolution of Group.
Not applicable.
Notice of dissolution of a group may be furnished as an
exhibit stating the date of the dissolution and that all further
filings with respect to transactions in the security reported on
will be filed, if required, by members of the group, in their
individual capacity. See Item 5.
Item 10. Certifications
Item 10 (a)
By signing below I certify that, to the best of my knowledge
and belief, the securities referred to above were acquired and are
held in the ordinary course of business and were not acquired and
are not held for the purpose of or with the effect of changing or
influencing the control of the issuer of the securities and were
not acquired and are not held in connection with or as a
participant in any transaction having that purpose or effect.
Item 10 (b) Not Applicable.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
February 15, 2005
Date
/s/ Steven M. Kleiman
Signature
Steven M. Kleiman, COO
Name/Title