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Depomed Provides License for Patents Covering Metformin Extended Release Technology to Merck & Co., Inc.

MENLO PARK, Calif.--(BUSINESS WIRE)--Jul. 22, 2009-- Depomed, Inc. (NASDAQ:DEPO) today announced that it has provided a license to certain patents directed to metformin extended release technology to Merck & Co., Inc. to be used in developing fixed dose combinations of sitagliptin and extended release metformin.

“We are delighted to provide Merck with access to certain of our patents related to metformin extended release technology for this important potential therapy for type II diabetes,” said Carl A. Pelzel, president and chief executive officer of Depomed. “We are pleased to continue to execute on our plan to extract significant value from our delivery technology as we advance our late stage clinical development programs toward Phase 3 data later this year,” Mr. Pelzel added.

Under terms of the agreement, Merck will receive a non-exclusive license as well as other rights to certain Depomed patents directed to metformin extended release technology. In exchange Depomed will receive a $10 million upfront fee. Depomed is also eligible to receive a milestone payment upon filing of the New Drug Application for the therapeutic candidate, as well as modest royalties on any net product sales for an agreed-upon period. Merck will also be granted a right of reference to the New Drug Application covering Depomed’s GLUMETZA® (extended release metformin hydrochloride tablets) product in Merck’s regulatory filings covering fixed dose combinations of sitagliptin and extended release metformin. Depomed has no development obligations under the agreement.

About Depomed

Depomed, Inc. is a specialty pharmaceutical company with two product candidates in Phase 3 clinical development, two approved products on the market and other product candidates in its early stage pipeline. Product candidate DM-1796 is in Phase 3 clinical development for the treatment of neuropathic pain and has been licensed to Solvay Pharmaceuticals. Product candidate SeradaTM is in Phase 3 clinical development for menopausal hot flashes. GLUMETZA® (metformin hydrochloride extended release tablets) is approved for use in adults with type 2 diabetes and promoted by Santarus, Inc. in the United States. Proquin® XR (ciprofloxacin hydrochloride) is approved in the United States for the once-daily treatment of uncomplicated urinary tract infections. 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, controlled release of medications to the upper gastrointestinal tract. Benefits of Acuform-enhanced pharmaceuticals include the convenience of once-daily administration, improved treatment tolerability and enhanced compliance and efficacy. 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 our business strategy; potential business development transactions; our research and development efforts, including pre-clinical and clinical testing; regulation by the FDA and other government agencies; the timing of regulatory applications and product launches; and other risks detailed in the company’s Securities and Exchange Commission filings, including the company’s Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q. 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.

Source: Depomed, Inc.

Depomed, Inc.
Sheilah Serradell, 650-462-5900
sserradell@depomed.com