MENLO PARK, Calif., March 3, 2011 (GLOBE NEWSWIRE) -- Depomed, Inc. (Nasdaq:DEPO) today reported financial results for the fourth quarter and year ended December 31, 2010.
"We are pleased to report a profitable year and our third consecutive profitable quarter," said Carl A. Pelzel, president and chief executive officer of Depomed. "Our excellent financial performance and business progress in 2010, as well as the $48 million milestone payment from Abbott Products received last week, provide us with substantial resources to pursue our plan to achieve sustainable profitability from recurring operating revenue from our own specialty pharmaceutical business. Meanwhile, we look forward to the results of Serada's Breeze 3 trial later this year, as enrollment has just concluded," Mr. Pelzel added.
Fourth Quarter 2010 and Recent Highlights
- Presentations of Breeze 1 and 2 clinical data at the North American Menopause Society annual meeting (October 2010);
- Awarded a second grant by The Michael J. Fox Foundation to support clinical development of DM-1992 for Parkinson's disease (October 2010);
- Receipt of a $5.0 million milestone payment from Janssen Pharmaceutica for delivery of formulation (October 2010, recognized as revenue during the third quarter of 2010);
- Receipt of a $2.5 million development milestone payment pursuant to the agreement with Merck (October 2010, recognized as revenue during the fourth quarter of 2010);
- Availability and re-launch of Glumetza 500mg tablets (January 2011);
- Achievement of a $3.0 million Glumetza sales milestone payment from Santarus, Inc. to be paid in March 2011 (January 2011);
- US FDA approval of Gralise (gabapentin) once-daily tablets for treatment of post-herpetic neuralgia (January 2011);
- Results of the Phase 1 trial of twice-daily formulation of DM-1992 in Parkinson's patients (February 2011);
- Receipt of a $48.0 million milestone payment from Abbott Products on FDA approval of Gralise (February 2011);
- Completion of enrollment in Breeze 3, our pivotal Phase 3 trial evaluating Serada for menopausal hot flashes (March 2011).
Depomed Fourth Quarter and Full-Year 2010 Financial Highlights
Total revenue for the fourth quarter of 2010 was $20.9 million compared to $13.2 million in the fourth quarter of 2009. The increase in revenue in the fourth quarter of 2010 was the result of recognition of the $2.5 million Merck milestone, an increase in Glumetza product sales and revenues related to our collaborative arrangements with Janssen and Covidien.
Total revenue for the year-ended December 31, 2010 was $80.8 million compared to $57.7 million for the year-ended December 31, 2009. The increase in revenue in 2010 was the result of increases in Glumetza product sales and revenues related to our collaborative arrangements with Abbott Products, Janssen and Covidien.
Glumetza product sales were $11.5 million and $45.5 million for the fourth quarter and year-ended December 31, 2010, as compared to $9.8 million and $34.6 million for the corresponding periods in 2009.
Operating expenses were $18.5 million for the fourth quarter of 2010 and included $7.7 million in promotion fee expense related to the Company's promotion agreement with Santarus, compared with operating expenses of $15.3 million for the fourth quarter of 2009, which included $6.6 million in promotion fee expense.
Operating expenses were $69.0 million for year ended December 31, 2010 and included $31.4 million in promotion fee expense, compared with operating expenses of $74.5 million for the year ended December 31, 2009, which included $23.6 million in promotion fee expense. The decrease in operating expenses for the year ended December 31, 2010 was primarily driven by the completion of the Phase 3 clinical trial for Gralise and completion of the first two Phase 3 clinical trials for Serada during 2009.
Net income during the fourth quarter of 2010 was $1.7 million, or $0.03 cents per share, compared to a net loss during the fourth quarter of 2009 of $3.6 million, or $0.07 cents per share.
Net income for the year ended December 31, 2010 was $3.9 million, or $0.07 cents per share, compared to a net loss during the year ended December 31, 2009 of $22.0 million, or $0.43 cents per share.
Cash, cash equivalents and marketable securities were $76.9 million as of December 31, 2010 compared to $81.8 million as of December 31, 2009. Cash, cash equivalents and marketable securities at December 31, 2010 does not include the $48.0 million milestone payment from Abbott Products that we received in February 2011.
Conference Call
Depomed will host a conference call today, Thursday, March 3, 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 approved product on the market and has developed another approved product. GraliseTM (gabapentin) is a once-daily treatment approved in the United States for management of post-herpetic neuralgia (PHN) and has been licensed to Abbott Products, Inc. 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 one in Phase 3 clinical development, and other product candidates in its early stage pipeline. Product candidate Serada® is in Phase 3 clinical development for menopausal hot flashes. 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.
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. | ||||
| STATEMENTS OF OPERATIONS | ||||
| (in thousands, except share and per share amounts) | ||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||
| 2010 | 2009 | 2010 | 2009 | |
| (unaudited) | (unaudited) | (unaudited) | (1) | |
| Revenue: | ||||
| Product sales | $11,550 | $9,987 | $45,637 | $35,094 |
| Royalties | 52 | 76 | 306 | 1,533 |
| License and collaborative revenue | 9,256 | 3,171 | 34,821 | 21,101 |
| Total revenues | 20,858 | 13,234 | 80,764 | 57,728 |
| Costs and expenses: | ||||
| Cost of sales | 1,136 | 1,629 | 8,097 | 5,257 |
| Research and development expense | 5,751 | 4,953 | 20,111 | 34,298 |
| Selling, general and administrative expense: | ||||
| Promotion fee expense | 7,650 | 6,648 | 31,419 | 23,589 |
| Other selling, general and administrative expense | 5,109 | 3,719 | 17,512 | 16,656 |
| Total selling, general and administrative expense | 12,759 | 10,367 | 48,931 | 40,245 |
| Total costs and expenses | 19,646 | 16,949 | 77,139 | 79,800 |
| Income (loss) from operations | 1,212 | (3,715) | 3,625 | (22,072) |
| Other income (expenses): | ||||
| Interest and other income | 587 | 319 | 839 | 1,050 |
| Interest expense | (101) | (213) | (572) | (1,001) |
| Total other income (expenses) | 486 | 106 | 267 | 49 |
| Net income (loss) before income taxes | 1,698 | (3,609) | 3,892 | (22,023) |
| Provision for (benefit from) income taxes | (8) | 2 | (4) | (15) |
| Net income (loss) | $1,706 | $(3,611) | $3,896 | $(22,008) |
| Basic net income (loss) applicable to common stock shareholders per common share | $0.03 | $(0.07) | $0.07 | $(0.43) |
| Diluted net income (loss) applicable to common stock shareholders per common share | $0.03 | $(0.07) | $0.07 | $(0.43) |
| Shares used in computing basic net income (loss) per common share | 52,796,253 | 52,048,999 | 52,533,256 | 51,519,912 |
| Shares used in computing diluted net income (loss) per common share | 54,329,126 | 52,048,999 | 53,360,786 | 51,519,912 |
|
(1) Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. |
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| DEPOMED, INC. | ||
| BALANCE SHEETS | ||
|
(in thousands, except share amounts) |
||
| December 31, | ||
|
|
2010 | 2009 |
| ASSETS | (unaudited) | (1) |
| Current assets: | ||
| Cash and cash equivalents | $22,526 | $ 26,821 |
| Marketable securities | 47,825 | 42,922 |
| Accounts receivable | 6,347 | 4,933 |
| Inventories | 1,571 | 2,565 |
| Prepaid and other current assets | 1,330 | 1,185 |
| Total current assets | 79,599 | 78,426 |
| Marketable securities, long-term | 6,537 | 12,016 |
| Property and equipment, net | 698 | 942 |
| Other assets | 197 | 197 |
| $ 87,031 | $ 91,581 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | 18,473 | 15,222 |
| Deferred product sales | 1,041 | 1,635 |
| Deferred license revenue | 10,665 | 11,184 |
| Other current liabilities | 635 | 414 |
| Current portion of long-term debt | 2,170 | 3,747 |
| Total current liabilities | 32,984 | 32,202 |
| Deferred license revenue, non-current portion | 30,926 | 41,306 |
| Long-term debt, net of current portion | — | 2,170 |
| Other long-term liabilities | 15 | 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 December 31, 2010 and 2009 | — | — |
|
Common stock, no par value, 100,000,000 shares authorized; 52,957,787 and 52,200,358 shares issued and outstanding at December 31, 2010 and 2009, respectively |
191,343 | 187,895 |
| Accumulated deficit | (168,306) | (172,202) |
| Accumulated other comprehensive gain | 69 | 33 |
| Total shareholders' equity | 23,106 | 15,726 |
| $ 87,031 | $ 91,581 | |
|
(1) Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. |
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