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Depomed Inc. Reports Operating Results (10-K)

March 16, 2011 | About:
10qk

10qk

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Depomed Inc. (DEPO) filed Annual Report for the period ended 2010-12-31.

Depomed Inc. has a market cap of $467.6 million; its shares were traded at around $8.83 with a P/E ratio of 110.4 and P/S ratio of 5.8.

Highlight of Business Operations:

In May 2010, the FDA accepted the Gralise NDA filing for postherpetic neuralgia for review, which triggered a $10.0 million milestone payment from Abbott Products to us in June 2010. In June 2010, we conducted a voluntary, wholesaler-level recall of our 500mg Glumetza product due to the presence of trace amounts of a chemical called 2,4,6-tribromoanisole in bottles containing 500mg Glumetza tablets. The 500mg Glumetza was resupplied in January 2011. In August 2010, we enrolled the first patient in Breeze 3, our ongoing Phase 3 trial evaluating Serada for menopausal hot flashes, after reaching agreement with the FDA regarding a Special Protocol Assessment (SPA) on the design and analysis of the trial. In August 2010, we entered into a license agreement with Janssen granting Janssen a non-exclusive worldwide license to our Acuform drug delivery technology to be used in developing fixed dose combinations of canagliflozin and extended release metformin. We received a $5.0 million upfront license fee from Janssen in August 2010, and a $5.0 million payment from Janssen in October 2010 for achievement of a formulation milestone. 5

In September 2010, we received a $0.5 million milestone payment from Covidien related to the first product candidate under our agreement entering clinical development. In September 2010, we dosed the first patient in our second Phase 1 clinical trial for our DM-1992 program for Parkinson's disease. The trial was funded in part by a clinical grant from The Michael J. Fox Foundation under its Clinical Intervention Awards 2010 program. We reported the results of the trial in February 2011. In September 2010, Merck filed an NDA for a fixed dose sitagliptin and extended release metformin combination pursuant to our agreement, which triggered a $2.5 million milestone from Merck that we received in October 2010. In November 2010, we were awarded two cash grants totaling approximately $0.5 million under the U.S. Government's Qualifying Therapeutic Discovery Project (QTDP) program, related to two of the Company's development programs, Serada for the treatment menopausal hot flashes and DM-1992 for the treatment of Parkinson's disease. Total revenues for the year ended December 31, 2010 were $80.8 million, compared to $57.7 million for the year ended December 31, 2009. Operating expenses for the year ended December 31, 2010 were $69.0 million, compared to $74.5 million for the year ended December 31, 2009. Cash, cash equivalents and marketable securities were $76.9 million as of December 31, 2010, compared to $81.8 million as of December 31, 2009. RECENT PRODUCT DEVELOPMENTS AND TRANSACTIONS

Pursuant to the license agreement with Solvay, we received a $25.0 million upfront fee in February 2009. In March 2010, Abbott Products submitted an NDA for Gralise to the FDA for the management of postherpetic neuralgia. The NDA was submitted under Section 505(b)(2) of the Food, Drug and Cosmetic Act because it references certain toxicity, safety and other data of Neurontin®, the formulation of gabapentin initially approved by the FDA. In May 2010, the FDA accepted the NDA for Gralise for the management of postherpetic neuralgia, which triggered a $10.0 million milestone payment from Abbott Products to us in June 2010.

Santarus, Inc. In July 2008, we entered into a promotion agreement with Santarus granting Santarus exclusive rights to promote Glumetza in the United States. Santarus paid us a $12.0 million upfront fee, and based on the achievement of specified levels of annual Glumetza net product sales, Santarus may be required to pay us additional one-time sales milestones, totaling up to $16.0 million. In January 2011, we achieved the first sales milestone of $3.0 million related to Glumetza net sales exceeding $50.0 million for the 13 months ended January 31, 2011.

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