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Depomed Inc. Reports Operating Results (10-Q)

August 06, 2010 | About:

Depomed Inc. (NASDAQ:DEPO) filed Quarterly Report for the period ended 2010-06-30.

Depomed Inc. has a market cap of $173.3 million; its shares were traded at around $3.31 with and P/S ratio of 3. DEPO is in the portfolios of Daniel Loeb of Third Point, LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

· Revenue for the three months ended June 30, 2010 was $24.4 million, compared to $11.6 million for the three months ended June 30, 2009. Revenue for the three months ended June 30, 2010 included recognition of the $10.0 million milestone payment received from Abbott Products.

· Operating expenses for the three months ended June 30, 2010 were $17.2 million, compared to $20.0 million for the three months ended June 30, 2009.

· Cash, cash equivalents and marketable securities were $76.9 million as of June 30, 2010, compared to $81.8 million as of December 31, 2009.

DM-1796. The increase in DM-1796 license and milestone revenue for the three and six months ended June 30, 2010 as compared to the corresponding periods in 2009 relates to the $10.0 million milestone payment received from Abbott Products in June 2010 on FDA acceptance of the NDA for DM-1796 for the treatment of postherpetic neuralgia. Because the milestone was substantive in nature, achieved and based on past performance, the entire $10.0 million was recognized as license revenue in the second quarter of 2010. In the fourth quarter of 2008, the Company received a $25.0 million upfront license payment from Abbott Products under our license agreement granting Abbott Products exclusive rights to develop and commercialize DM-1796 in the United States, Canada and Mexico for pain indications. We are recognizing the $25.0 million upfront payment received from Abbott Products as revenue ratably until January 2013, which represents the expected maximum length of time our development and supply obligations exist under the agreement.

GLUMETZA. GLUMETZA license revenue for the three and six months ended June 30, 2010 and 2009 consisted of license revenue recognized from the $25.0 million upfront license fee received from Biovail in July 2005 and the $12.0 million upfront fee received from Santarus in July 2008.

Acuform Technology. In November 2008, we entered into a license agreement with Covidien granting Covidien worldwide rights to utilize our Acuform technology for the exclusive development of four products containing acetaminophen in combination with opiates. Through November 2008, Covidien paid us a total of $5.5 million in upfront fees, representing a $4.0 million upfront license fee and a $1.5 million upfront payment for formulation work to be performed by Depomed under the agreement. The entire $5.5 million is being accounted for as a single unit of accounting and being amortized ratably through November 2011, which is the length of time Depomed is obligated to perform formulation work under the agreement.

Read the The complete Report

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