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Depomed Reports Second Quarter Financial Results
Conference Call Scheduled for today at 5:00PM ET
Dial in information included below

MENLO PARK, Calif., Aug. 2, 2012 /PRNewswire/ -- Depomed, Inc. (Nasdaq:DEPO) today reported financial results for the quarter and six months ended June 30, 2012.

2012 Second Quarter and Recent Business Highlights

  • Financial Highlights:
    • Revenue of $14.1 million for the second quarter and $30.9 million for the six months ended June 30
    • Net loss of ($15.8) million or ($0.28) per share for the second quarter and ($24.6) million or ($0.44) per share for the six months ended June 30
    • $89 million of cash and marketable securities and no debt
    • Gralise® (gabapentin) product sales of $3.2 million for the second quarter
    • Zipsor® (diclofenac potassium) acquisition closed June 21, 2012
    • Glumetza® (metformin hydrochloride extended release tablets) royalty of $9.4 million on the second quarter Glumetza sales
  • Technology and R&D Highlights:
    • Completion of enrollment of Phase 2 trial for Parkinson's Disease with DM-1992
    • NDA submitted July 31, 2012  with respect to Serada for Menopausal Hot Flashes

"Our first half results highlight the advances we have made toward transforming Depomed into a successful specialty pharmaceutical company," said Jim Schoeneck, president and chief executive officer of Depomed. "Our launch of Gralise is progressing well, with total prescriptions for the most recent week exceeding 2,600 and approximately 6,000 healthcare providers prescribing Gralise since our market introduction late last year.  We continue to make progress with our payor coverage of Gralise in both commercial and government plans.  Our  29.5% Glumetza royalty amounted to $9.4 million in the second quarter and $18.6 million in the first six months of the year.  In addition, we submitted our NDA for Serada in July."

"We acquired Zipsor (diclofenac potassium) Liquid Filled Capsules for the treatment of mild to moderate pain in late June and began promoting the product in July. Zipsor was acquired with cash on hand, and we ended the quarter with a strong balance sheet with $89 million of cash and marketable securities and no debt."  

Depomed Second Quarter Financial Highlights

Total revenue for the second quarter of 2012 was $14.1 million, consisting of $3.2 million of Gralise product sales, $9.6 million of royalties and $1.3 million of license and other collaborative revenue.

This compares to revenues of $21.2 million in the second quarter of 2011. Second quarter 2011 revenues included $16.2 million of Glumetza sales.  Revenues for second quarter 2012 do not reflect any Glumetza 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 operating expenses.

Operating expenses were $28.7 million for the second quarter of 2012.  This compares with $25.1 million for second quarter 2011. Operating expenses for the second quarter of 2012 include sales and marketing expenses associated with Gralise, which was launched in October 2011.  Operating expenses for second quarter 2012 did not reflect any promotion fee expense, compared with $11.1 million in promotion fee expense for second quarter 2011.

Net loss for second quarter 2012 was ($15.8) million, or ($0.28) per share, compared to net loss of ($5.7) million, or ($0.11) per share for second quarter 2011.

Cash, cash equivalents and marketable securities were $89 million as of June 30, 2012 compared to $139.8 million as of December 31, 2011.  In June 2012, Depomed acquired all rights to Zipsor and purchased Zipsor inventory in return for $26.4 million of cash and potential milestone payments based on sales of Zipsor and assumption of certain liabilities.

Conference Call

Depomed will host a conference call today, Thursday August 2, beginning at 5:00 p.m. EDT (2:00 p.m. PDT) 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 June 30,


Six Months Ended June 30,




2012


2011


2012


2011


Revenues:










Product sales


$

3,201


$

16,153


$

5,310


$

31,464


Royalties


9,577


67


18,998


232


License and other revenue


1,332


4,998


6,637


72,623


Total revenues


14,110


21,218


30,945


104,319












Costs and expenses:










Cost of sales


1,442


2,140


1,960


3,775


Research and development expense


3,525


4,043


7,007


9,197


Selling, general and administrative expense:










Promotion fee expense



11,055



21,317


Other selling, general and administrative expense


25,021


9,976


46,793


17,216


Total selling, general and administrative expense


25,021


21,031


46,793


38,533


Amortization of intangible asset


105



105



    Gain on settlement agreement





(40,000)


Total costs and expenses


30,093


27,214


55,865


11,505












Income (loss) from operations


(15,983)


(5,996)


(24,920)


92,814


Other income (expense)


204)


318


347


327


Provision for income taxes


(1)


(1)


(9)


(3)


Net income (loss)


$

(15,780)


$

(5,679)


$

(24,582)


$

93,138












Basic net income (loss) per common share


$

(0.28)


$

(0.11)


$

(0.44)


$

1.73


Diluted net income (loss) per common share


$

(0.28)


$

(0.11)


$

(0.44)


$

1.67












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


55,786,617


54,056,064


55,670,598


53,706,617


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


55,786,617


54,056,064


55,670,598


55,883,346


 

 

 

DEPOMED, INC.


CONDENSED BALANCE SHEETS


(in thousands, except share amounts)


(Unaudited)




June 30,


December 31,




2012


2011




(Unaudited)


(1)


ASSETS






Current assets:






Cash and cash equivalents


$

13,521


$

24,043


Marketable securities


58,691


62,106


Accounts receivable


1,945


4,420


Receivables from collaborative partners


8.943


8,135


Inventories


8,029


5,395


Prepaid and other current assets


6,341


5,390


Total current assets


97,470


109,489


Marketable securities, long-term


16,819


53,644


Property and equipment, net


1,400


1,070


Intangible assets, net


26,995



Other assets


425


169




$

143,109


$

164,372


LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts payable and accrued liabilities


$       30,168


$         26,784


Deferred product sales


4,519


6,960


Deferred license revenue


5,550


6,032


Other current liabilities


37


64


Total current liabilities


40,274


39,840


Deferred license revenue, non-current portion


15,158


17,932


Other long-term liabilities


2,276


682


Shareholders' equity:






Preferred stock, no par value, 5,000,000 shares authorized; Series A convertible preferred stock, 25,000 shares designated, 18,158 shares issued and surrendered, and zero shares outstanding at June 30, 2012 and December 31, 2011




Common stock, no par value, 100,000,000 shares authorized; 55,918,318 and 55,506,120 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively


207,492


203,511


Accumulated deficit


(122,162)


(97,580)


Accumulated other comprehensive gain (loss)


71


(13)


Total shareholders' equity


$        85,401


$       105,918




$      143,109


$       164,372


 

SOURCE Depomed, Inc.