When I first fought the Adra Dragon, it wiped out everyone except for Eder with its breath attack within the very first moments of the fight as well.
I fought the dragon a second time, and it didn't use its breath attack. I'm not sure if the breath attack is random, or if it depends on the positioning of your party (i.e. all in front of the dragon vs surrounding it), or some other condition.
HOWEVER, I will say that the fight is much easier if you get a certain special debuff ability for slaying dragons.
The debuff ability is called Scale-Breaker, and you learn it from a dragon slayer in Black Meadow.
You have to convince the dragon that you'll help it find a new body, so that it can finally leave the cave that it's trapped in. The dragon will give you an amulet to contain its soul while you transport it to the dragon slayer, whose body it wants to possess (because only her body is strong enough to not be burnt away from the dragon's powerful soul).
When you meet the dragon slayer, you can warn her instead about the dragon's plans, at which point the dragon, angry at your betrayal, breaks the amulet and returns to its body. In thanks, the dragon slayer gives you the Scale-Breaker debuff.
Now that you have the debuff ability Scale-Breaker, you can use it on the dragon to reduce its damage reduction by 6, and its accuracy and all of its defenses by 12, for a base duration of 15 seconds. After I debuffed the dragon with this, I then started using a bunch of other debuffs on it to further reduce its damage reduction and defenses, after which it wasn't too difficult to kill.
In terms of tactics, I surrounded the dragon with all of my party members, in case it decided to use its breath attack. This will not protect everyone from AOE attacks, because the dragon also uses physical tail lash and wing swipe attacks, but at least not everyone in your party will get hit with them all at once. Surrounding the dragon is made easier because SPOILERS:
the dragon will be pacified when you return because of the ordeal of having its soul separated from its body, so it won't attack you unless you attack first.
Use this to your advantage to either start attacking the lessor mobs first (mentioned below), or surround the dragon before you begin your attack.
There will still be minor mobs that you have to deal with, such as the Xaurip high priests who will debuff your party members. I diverted one or two of my party members to deal with them. There are also 2 Adragans mobs near the dragon. I killed them first before engaging the dragon, because they'll summon blights that you'll have to deal with. The Adragans are pushovers, as long as you engage them before the dragon.
I should mention that I wasn't really using Durance to heal. I crafted a bunch of Major Endurance potions for everyone. My tank Eder had to use them twice, while my DPS members Pallegina and Aloth had to use them once each. I was also packing Merciless Gaze potions for my melee characters.
I also had everyone eat Farmer's Spread, Pearlwood Chicken, Rautai Sweet Pie, and Casita Casserole for my spell casters, before the fight.