MENLO PARK, Calif., Aug. 1, 2011 (GLOBE NEWSWIRE) -- Depomed, Inc. (Nasdaq:DEPO) today reported financial results for the second quarter ended June 30, 2011. Total revenues for the quarter were $21.2 million compared to $24.4 million for the second quarter of 2010. Net loss for the quarter was $5.7 million, or $0.11 per share, compared to net income of $4.1 million, or $0.08 per share for the second quarter of 2010. Net income for the second quarter of 2010 included the one-time recognition of a $10 million milestone payment from Abbott Products, Inc. related to the FDA's acceptance for review of the New Drug Application for GraliseTM (gabapentin). Cash, cash equivalents and marketable securities were $164.2 million as of June 30, 2011 compared to $76.9 million as of December 31, 2010.
Glumetza product sales for the second quarter of 2011 were $16.2 million, compared to $11.6 million for the second quarter of 2010. License and collaborative revenue for the second quarter of 2011 was $5.0 million, compared to $12.7 million for the second quarter of 2010. The decrease in license and collaborative revenue was primarily due to the one-time $10 million milestone from Abbott Products, Inc. recognized in the second quarter of 2010.
Total operating expenses for the second quarter of 2011 were $25.1 million, compared to $17.2 million for the second quarter of 2010.
Research and development expense for the second quarter of 2011 was $4.0 million, compared to $4.6 million for the second quarter of 2010.
"We've been laser focused and working hard on preparation for the launch of Gralise," said Depomed President and CEO, Jim Schoeneck. "We've put an experienced team in place, we're making good progress on all aspects of the launch and are now targeting introduction of the product to the market in October. The investment we've made in preparing for the launch is reflected in our SG&A expense."
Selling, general and administrative expense for the second quarter of 2011 was $21.0 million, compared to $12.6 million for the second quarter of 2010. The increase in selling, general and administrative expense was primarily due to sales and marketing costs related to the planned launch of Gralise in the fourth quarter of 2011, and a $3.0 million increase in Glumetza promotion fees to Santarus resulting from higher Glumetza product sales.
Second Quarter 2011 Business Highlights
- Revenue from product sales increase 39% over second quarter 2010.
- Engagement of inVentiv Selling Solutions to provide the sales team for the launch of Gralise.
- Appointment of James A. Schoeneck as President and CEO.
- Hiring of vice presidents of sales and marketing.
Conference Call
Depomed will host a conference call today, Monday, Aug 1, beginning at 5:00 p.m. ET, 2:00 p.m. PT to discuss its results. The conference call will be available via a live webcast on the investor relations section of Depomed's website at http://www.depomed.com.
The dial-in number for the conference call is 888-668-1637 and the passcode is 8395424. For the webcast, 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 one approved product on the market and another recently approved product. GraliseTM (gabapentin) is a once-daily treatment approved for the management of postherpetic neuralgia (PHN). 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. The company also has a robust pipeline including Serada®, which is in Phase 3 clinical development for menopausal hot flashes, as well as earlier stage candidates. 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 controlled release of medications to the upper gastrointestinal tract when dosed with food. Additional information about Depomed may be found on its website, http://www.depomed.com.
The Depomed, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7529
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.
Statements included in this press release that are not a description of historical facts are forward-looking statements. These forward-looking statements include statements related to the launch and prospects for Gralise, and the timing and results of the conclusion of the Breeze 3 clinical trial. 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. The achievement of those plans and objectives involves risks and uncertainties including, but not limited to, risks and uncertainties related to the launch and market acceptance of Gralise; results of clinical trials and other research and development efforts; 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.
| 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, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenues: | ||||
| Product sales | $ 16,153 | $ 11,657 | $ 31,464 | $ 24,257 |
| Royalties | 67 | 91 | 232 | 179 |
| License and collaborative revenue | 4,998 | 12,671 | 72,623 | 15,342 |
| Total revenues | 21,218 | 24,419 | 104,319 | 39,778 |
| Costs and expenses: | ||||
| Cost of sales | 2,140 | 2,981 | 3,775 | 4,462 |
| Research and development expense | 4,043 | 4,570 | 9,197 | 9,758 |
| Selling, general and administrative expense: | ||||
| Promotion fee expense | 11,055 | 8,099 | 21,317 | 16,978 |
| Other selling, general and administrative expense | 9,976 | 4,541 | 17,216 | 8,091 |
| Total selling, general and administrative expense | 21,031 | 12,640 | 38,533 | 25,069 |
| Gain on settlement agreement | -- | -- | (40,000) | -- |
| Total costs and expenses | 27,214 | 20,191 | 11,505 | 39,289 |
| Income (loss) from operations | (5,996) | 4,228 | 92,814 | 489 |
| Other income (expense): | ||||
| Interest and other income | 357 | 56 | 436 | 150 |
| Interest expense | (39) | (157) | (109) | (340) |
| Total other income (expense) | 318 | (101) | 327 | (190) |
| Net income (loss) before income taxes | (5,678) | 4,127 | 93,141 | 299 |
| Provision for income taxes | (1) | (1) | (3) | (2) |
| Net income (loss) | $ (5,679) | $ 4,126 | $ 93,138 | $ 297 |
|
Basic net income (loss) applicable to common stock shareholders per common share |
$ (0.11) | $ 0.08 | $ 1.73 | $ 0.01 |
|
Diluted net income (loss) applicable to common stock shareholders per common share |
$ (0.11) | $ 0.08 | $ 1.67 | $ 0.01 |
|
Shares used in computing basic net income (loss) per common share |
54,056,064 | 52,436,681 | 53,706,617 | 52,368,085 |
|
Shares used in computing diluted net income (loss) per common share |
54,056,064 | 53,103,623 | 55,883,346 | 52,918,507 |
| DEPOMED, INC. | ||
| CONDENSED BALANCE SHEETS | ||
| (in thousands, except share amounts) | ||
| June 30, | December 31, | |
| 2011 | 2010 | |
| (Unaudited) | (1) | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 36,311 | $ 22,526 |
| Marketable securities | 77,522 | 47,825 |
| Accounts receivable | 7,360 | 6,094 |
| Receivables from collaborative partners | 584 | 253 |
| Inventories | 5,014 | 1,571 |
| Prepaid and other current assets | 2,918 | 1,330 |
| Total current assets | 129,709 | 79,599 |
| Marketable securities, long-term | 50,377 | 6,537 |
| Property and equipment, net | 994 | 698 |
| Other assets | 181 | 197 |
| $ 181,261 | $ 87,031 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | 23,522 | 18,473 |
| Deferred product sales | 420 | 1,041 |
| Deferred license revenue | 7,647 | 10,665 |
| Other current liabilities | 404 | 635 |
| Current portion of long-term debt | 121 | 2,170 |
| Total current liabilities | 32,114 | 32,984 |
| Deferred license revenue, non-current portion | 23,328 | 30,926 |
| Other long-term liabilities | -- | 15 |
| Commitments | ||
| 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, 2011 and December 31, 2010 |
-- | -- |
|
Common stock, no par value, 100,000,000 shares authorized; 55,339,962 and 52,957,787 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |
200,831 | 191,343 |
| Accumulated deficit | (75,167) | (168,306) |
| Accumulated other comprehensive gain | 155 | 69 |
| Total shareholders' equity | 125,819 | 23,106 |
| $ 181,261 | $ 87,031 | |
| (1) Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. | ||