Depomed Reports Third Quarter Financial Results Conference Call Scheduled for today at 5:00PM EST

Updated dial in information included below

MENLO PARK, Calif., Nov. 5, 2012 /PRNewswire/ -- Depomed, Inc. (Nasdaq: DEPO) today reported financial results for the quarter and nine months ended September 30, 2012.

2012 Third Quarter and Recent Business Highlights

  • Financial Highlights:
    • Revenue of $33.3 million for the third quarter and $64.2 million for the nine months ended September 30
    • Net loss of ($1.5) million or ($0.03) per share for the third quarter and ($26.1) million or ($0.47) per share for the nine months ended September 30
    • $87.7 million of cash and marketable securities and no debt
  • Gralise® (gabapentin) Highlights:
    • Gralise product sales of $4.8 million for the third quarter
    • Gralise prescription demand now over 3,500 per week
    • Approximately 8,500 physicians have prescribed Gralise since launch
  • Zipsor® (diclofenac potassium) Highlights:
    • Zipsor product sales of $4.9 million for the third quarter
    • Depomed promotion commenced at the end of July 2012
  • Glumetza® (metformin hydrochloride extended release tablets) Highlights:
    • Royalty of $11.6 million on third quarter Glumetza sales
  • Technology and R&D Highlights:
    • License agreement with Janssen Pharmaceuticals for Nucynta ER; $10 million upfront payment received in September; royalties started July 2, 2012 and continue through 2021
    • Serada NDA accepted by FDA; Advisory Committee meeting tentatively scheduled for March 4, 2013; PDUFA date of May 31, 2013

"During the third quarter, Gralise prescriptions continued to grow, we relaunched Zipsor, Glumetza royalties for the quarter exceeded $11 million, we expanded our portfolio of license and development agreements with our license to Janssen for Nucynta ER and received a $10 million upfront payment. In October, the FDA accepted our NDA for Serada and set a tentative date for an Advisory Committee. We believe that we are well on our way toward transforming Depomed into a sustainably profitable specialty pharmaceutical company.  We are developing a pain franchise with our two marketed products, Gralise and Zipsor.  We have a Glumetza royalty stream that should exceed $40 million for 2012, a broad base of six license and development agreements that should provide us significant milestones and royalties over the next several years, a pipeline of product candidates and a strong balance sheet," said Jim Schoeneck, president and chief executive officer of Depomed.

Depomed Third Quarter Financial Highlights
Total revenue for the third quarter of 2012 was $33.3 million, consisting of $4.8 million of Gralise product sales, $4.9 million of Zipsor product sales, $12.2 million of royalties and $11.4 million of license and other revenue. License and other revenue includes recognition of the $10 million upfront payment received from Janssen under the license agreement for Nucynta ER.

This compares to revenues of $16.5 million in the third quarter of 2011. Third quarter 2011 revenues included $9.2 million of Glumetza product sales.  Revenues for third quarter 2012 do not reflect any Glumetza product sales as a result of the restructuring of the Santarus agreement in August 2011.  Prior to the restructuring of the agreement, Depomed recognized revenues and cost of goods from Glumetza sales and paid Santarus a promotion fee that was included in expenses.

Operating expenses were $33.1 million for the third quarter of 2012.  This compares with $24.7 million for third quarter 2011. Operating expenses increased primarily due to sales and marketing expenses associated with Gralise, which was launched in October 2011, and Zipsor which was acquired in June 2012. Operating expenses for the third quarter of 2012 also include $1.0 million of intangible amortization associated with the Zipsor acquisition and one-time research and development expenses of $1.8 million for the NDA filing fee for Serada and $0.6 million for the payment of a license milestone to a licensor of one of the Serada patents. Operating expenses for third quarter 2012 did not reflect any promotion fee expense, compared with $6.0 million in promotion fee expense for third quarter 2011.

Net loss for third quarter 2012 was ($1.5) million, or ($0.03) per share, compared to net loss of ($8.6) million, or ($0.15) per share for third quarter 2011.

Cash, cash equivalents and marketable securities were $87.7 million as of September 30, 2012 compared to $139.8 million as of December 31, 2011. 

Conference Call
Depomed will host a conference call today, Monday, November 5, beginning at 5:00 p.m. EST (2:00 p.m. PST) to discuss its results. Participants can access the call by dialing 877-317-6789 (United States) or 412-317-6789 (international).  The conference call will also be available via a live webcast on the investor relations section of Depomed's website at http://www.depomed.com. Access the website 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the Company's website for three months.

About Depomed
Depomed, Inc. is a specialty pharmaceutical company with three approved and marketed products. Gralise® (gabapentin) is a once-daily treatment approved for the management of postherpetic neuralgia (PHN).  Zipsor ® (diclofenac potassium) Liquid Filled Capsules is a non-steroidal anti-inflammatory drug (NSAID) indicated for relief of mild to moderate acute pain in adults.  Glumetza® (metformin hydrochloride extended release tablets) is approved for use in adults with type 2 diabetes and is commercialized by Santarus, Inc. in the United States. Depomed formulates its products and product candidates with its proven, proprietary Acuform® drug delivery technology, which is designed to improve existing oral medications, allowing for extended release of medications to the upper gastrointestinal tract when dosed with food. Additional information about Depomed may be found on its website, www.depomed.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including, but not limited to, those related to the commercial launch of Gralise, our ability to sell Zipsor; the efforts of our collaboration partners to commercialize products; and other risks detailed in the company's Securities and Exchange Commission filings, including the company's Annual Report on Form 10-K for the year ended December 31, 2011 and the Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2012. The inclusion of forward-looking statements should not be regarded as a representation that any of the company's plans or objectives will be achieved. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

CONTACT:
August J. Moretti
Depomed, Inc.
650-462-5900
amoretti@depomed.com  

 

 

DEPOMED, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)

 



Three Months Ended September 30,


Nine Months Ended September 30,




2012


2011


2012


2011


Revenues:










Product sales


$

9,684


$

9,205


$

14,994


$

40,669


Royalties


12,201


2,179


31,199


2,412


License and other revenue


11,397


5,138


18,033


77,760


Total revenues


33,282


16,522


64,226


120,841












Costs and expenses:










Cost of sales


1,763


1,150


3,723


4,925


Research and development expense


5,270


3,208


12,277


12,405


Selling, general and administrative expense:










Promotion fee expense



6,023



27,339


Other selling, general and administrative expense


26,832


15,451


73,625


32,667


Total selling, general and administrative expense     


26,832


21,474


73,625


60,006


    Amortization of intangible asset


958



1,063



    Gain on settlement agreement





(40,000)


Total costs and expenses


34,823


25,832


90,688


37,336












Income (loss) from operations


(1,541)


(9,310)


(26,462)


83,505


Other income (expense)


57


386


405


713


Benefit from (provision for) income taxes


(11)


348


(20)


345


Net income (loss)


$

(1,495)


$

(8,576)


$

(26,077)


$

84,563












Basic net income (loss) per common share


$

(0.03)


$

(0.15)


$

(0.47)


$

1.56


Diluted net income (loss) per common share


$

(0.03)


$

(0.15)


$

(0.47)


$

1.51












Shares used in computing basic net income (loss) per common share


56,039,186


55,371,954


55,794,357


54,267,829


Shares used in computing diluted net income (loss) per common share


56,039,186


55,371,954


55,794,357


56,071,870


 

DEPOMED, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share amounts)

 



September 30,


December 31,




2012


2011




(Unaudited)


(1)


ASSETS






Current assets:






Cash and cash equivalents


$

27,372


$

24,043


Marketable securities


52,537


62,106


Accounts receivable


4,848


4,420


Receivables from collaborative partners


10,054


8,135


Inventories


7,795


5,395


Prepaid and other current assets


2,748


5,390


Total current assets


105,354


109,489


Marketable securities, long-term


7,749


53,644


Property and equipment, net


5,250


1,070


Intangible assets, net


26,037



Other assets


526


169




$

144,916


$

164,372


LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts payable and accrued liabilities


$           32,240


$          26,784


Deferred product sales


4,535


6,960


Deferred license revenue


5,781


6,032


Other current liabilities


332


64


Total current liabilities


42,888


39,840


Deferred license revenue, non-current portion


13,770


17,932


Other long-term liabilities


2,61


682


Shareholders' equity:






Common stock


209,217


203,511


Accumulated deficit


(123,657)


(97,580)


Accumulated other comprehensive gain (loss)


88


(13)


Total shareholders' equity


85,648


105,918




$

144,916


$

164,372


(1) Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

 

SOURCE Depomed, Inc.



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