Covidien and Depomed Announce License Agreement
ST. LOUIS & MENLO PARK, Calif., Nov 24, 2008 (BUSINESS WIRE) -- Covidien and Depomed, today announced that Covidien has licensed worldwide rights from Depomed to utilize Depomed's AcuForm(TM) gastric retentive drug delivery technology for the exclusive development of four undisclosed products. The products will target a key strategic focus of Covidien's pharmaceutical business and address major medical needs.
Under the license agreement between Depomed and Mallinckrodt Inc., a subsidiary of Covidien, Depomed will receive a one-time upfront payment of $4 million, and could receive up to $64 million in additional development milestone payments over the next several years. In addition, Covidien will pay Depomed a royalty on sales of products developed under this license agreement. Covidien will be responsible for all development other than certain initial formulation work. Covidien will pre-pay Depomed for the initial formulation work performed by Depomed under the collaboration.
Depomed will retain the exclusive option to promote the products developed under this license agreement within the Obstetrics/Gynecology specialty field. Once Depomed begins to promote these products, Covidien will pay Depomed a significantly higher royalty on the resulting net sales in this specialty.
"We are very excited to license our technology to one of the world's leading global healthcare manufacturers. We feel this transaction reflects the value of our technology and its ability to engender compounds with new, meaningful product differentiation," said Carl A. Pelzel, president and chief executive officer of Depomed. "In addition, this agreement provides Depomed with another attractive option for co-promotion in the Ob/Gyn specialty," added Pelzel.
"This is an excellent opportunity for Covidien to further the development of unique pharmaceutical products," said Chuck Bramlage, President, Pharmaceutical Products, Covidien. "Using Depomed technology gives us the opportunity to create novel drug delivery systems that may fill unmet needs in our key target markets," he added.
About Covidien
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in four segments: Medical Devices, Imaging Solutions, Pharmaceutical Products and Medical Supplies. With 2008 revenue of nearly $10 billion, Covidien has more than 41,000 employees worldwide in 59 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.
About Depomed
Depomed, Inc. is a specialty pharmaceutical company with two approved products on the market and other product candidates in its pipeline. The company utilizes its proven, proprietary AcuForm(TM) drug delivery technology 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. GLUMETZA(R) (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(R) XR (ciprofloxacin hydrochloride) is approved in the United States for the once-daily treatment of uncomplicated urinary tract infections and is being marketed in the United States within the urology, Ob/Gyn and long-term care specialties by Watson Pharmaceuticals. Product candidate DM-1796 (formerly referred to as Gabapentin GR(R)) is in clinical development for the treatment of neuropathic pain and has been licensed to Solvay Pharmaceuticals, Inc. Product candidate DM-5689 (formerly referred to as Gabapentin GR(R)) is in clinical development for menopausal hot flashes. Additional information about Depomed may be found at www.depomedinc.com.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management's current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, our ability to effectively introduce and market new products or keep pace with advances in technology, 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, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payers and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, including legacy Tyco-related litigation, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates, issues related to our existing material weakness in accounting for income taxes or potential environmental liabilities. These and other factors are identified and described in more detail in our filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.