MENLO PARK, Calif., Aug. 5, 2010 (GLOBE NEWSWIRE) -- Depomed, Inc. (Nasdaq:DEPO) today reported financial results for the second quarter ended June 30, 2010.
Net income for the three months ended June 30, 2010 was $4.1 million, or $0.08 per share compared to a net loss for the three months ended June 30, 2009 of $9.6 million, or $0.19 per share. The receipt and recognition of the $10.0 million milestone payment from Abbott Products Inc. related to the FDA's acceptance for review of the New Drug Application for DM-1796 for the treatment of post-herpetic neuralgia resulted in the three months ended June 30, 2010 being a profitable quarter. The results for the three months ended June 30, 2010 also include a total of $2.4 million in charges associated with the Company's voluntary recall of 52 lots of the 500mg formulation of GLUMETZA® (extended release metformin hydrochloride tablets).
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. The 110% increase in revenue year-over-year was primarily attributable to receipt and recognition of the $10.0 million milestone payment from Abbott Products Inc. and a $3.4 million increase in GLUMETZA product sales.
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. The decrease in operating expenses was primarily attributable to a $5.5 million decrease in research and development expenses resulting from decreased clinical research organization costs associated with the Serada® and DM-1796 clinical programs, which was partially offset by a $2.5 million increase in promotion fee expense related to the Company's promotion agreement for GLUMETZA with Santarus, Inc., resulting from increased GLUMETZA product sales. Stock-based compensation expense was $0.5 million for the three months ended June 30, 2010 as compared to $0.7 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.
"We achieved important milestones in the second quarter. The FDA accepted for filing our licensee's New Drug Application for DM-1796 for post-herpetic neuralgia, which triggered a $10 million milestone payment to us. We now look forward to a potential NDA approval milestone of $35 - $60 million in the first quarter of next year. Also, preparations for Serada's Breeze 3 trial progressed well and we expect to begin enrolling patients later this quarter," said Carl A. Pelzel, president and chief executive officer of Depomed.
Second Quarter 2010 Highlights
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FDA acceptance for filing of the New Drug Application for investigational post-herpetic neuralgia treatment DM-1796 filed by licensee Abbott Products Inc. (May 2010).
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Receipt of $10 million milestone payment from Abbott Products Inc. for DM-1796 (June 2010).
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Announced the results of a new clinical study that demonstrated patients with type 2 diabetes may be able to tolerate higher doses of metformin using GLUMETZA (June 2010).
- Initiated a voluntary, wholesaler-level recall of 500mg GLUMETZA (metformin hydrochloride extended release) tablets due to the presence of trace amounts of a chemical called 2,4,6-tribromoanisole (TBA) in bottles containing 500mg GLUMETZA tablets. The recall is precautionary and is not due to risks to patient health. No serious events associated with TBA have been documented in the medical literature (June 2010).
Conference Call
Depomed will host a conference call today, Thursday, August 5, 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. 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 product candidate through Phase 3 clinical development, another in Phase 3 clinical development, two approved products on the market and other product candidates in its early stage pipeline. Product candidate DM-1796 has completed Phase 3 clinical development and has been licensed to Abbott Products Inc. A New Drug Application for DM-1796 was accepted by the FDA in the second quarter of 2010. Product candidate Serada® 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. 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, 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.
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 clinical development programs; 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. 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, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenues: | ||||
| Product sales | $11,657 | $8,408 | $24,257 | $15,248 |
| Royalties | 91 | 529 | 179 | 993 |
| License and milestone revenue | 12,671 | 2,671 | 15,342 | 5,239 |
| Total revenues | 24,419 | 11,608 | 39,778 | 21,480 |
| Costs and expenses: | ||||
| Cost of sales | 2,981 | 1,229 | 4,462 | 2,261 |
| Research and development expense | 4,570 | 10,024 | 9,758 | 20,045 |
| Selling, general and administrative expense: | ||||
| Promotion fee expense | 8,099 | 5,640 | 16,978 | 10,184 |
| Other selling, general and administrative expense | 4,541 | 4,305 | 8,091 | 8,763 |
| Total selling, general and administrative expense | 12,640 | 9,945 | 25,069 | 18,947 |
| Total costs and expenses | 20,191 | 21,198 | 39,289 | 41,253 |
| Income (loss) from operations | 4,228 | (9,590) | 489 | (19,773) |
| Other income (expense): | ||||
| Interest and other income | 56 | 236 | 150 | 550 |
| Interest expense | (157) | (263) | (340) | (548) |
| Total other income (expense) | (101) | (27) | (190) | 2 |
| Net income (loss) before income taxes | 4,127 | (9,617) | 299 | (19,771) |
| Provision for income taxes | (1) | 2 | (2) | 1 |
| Net income (loss) | $4,126 | $(9,615) | $297 | $(19,770) |
|
Basic net income (loss) applicable to common stock shareholders per common share |
$0.08 | $(0.19) | $0.01 | $(0.39) |
|
Diluted net income (loss) applicable to common stock shareholders per common share |
$0.08 | $(0.19) | $0.01 | $(0.39) |
|
Shares used in computing basic net income (loss) per common share |
52,436,681 | 51,263,620 | 52,368,085 | 51,235,735 |
|
Shares used in computing diluted net income (loss) per common share |
53,103,623 | 51,263,620 | 52,918,507 | 51,235,735 |
| DEPOMED, INC. | |||
| CONDENSED BALANCE SHEETS | |||
| (in thousands, except share amounts) | |||
| June 30, | December 31, | ||
| 2010 | 2009 | ||
| (Unaudited) | (1) | ||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $22,245 | $26,821 | |
| Marketable securities | 45,097 | 42,922 | |
| Accounts receivable | 4,461 | 4,933 | |
| Inventories | 1,476 | 2,565 | |
| Prepaid and other current assets | 1,567 | 1,185 | |
| Total current assets | 74,846 | 78,426 | |
| Marketable securities, long-term | 9,544 | 12,016 | |
| Property and equipment, net | 741 | 942 | |
| Other assets | 197 | 197 | |
| $85,328 | $91,581 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Accounts payable and accrued liabilities | 14,230 | 15,222 | |
| Deferred product sales | 1,581 | 1,635 | |
| Deferred license revenue | 11,132 | 11,184 | |
| Other current liabilities | 437 | 414 | |
| Current portion of long-term debt | 3,978 | 3,747 | |
| Total current liabilities | 31,358 | 32,202 | |
| Deferred license revenue, non-current portion | 36,015 | 41,306 | |
| Long-term debt, net of current portion | 121 | 2,170 | |
| Other long-term liabilities | 104 | 177 | |
| 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, 2010 and December 31, 2009 |
— | — | |
|
Common stock, no par value, 100,000,000 shares authorized; 52,546,064 and 52,200,358 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively |
189,556 | 187,895 | |
| Accumulated deficit | (171,906) | (172,202) | |
| Accumulated other comprehensive gain | 80 | 33 | |
| Total shareholders' equity | 17,730 | 15,726 | |
| $85,328 | $91,581 | ||
|
(1) Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. |
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