Depomed Reports Second Quarter 2010 Financial Results
MENLO PARK, Calif., Aug 5, 2010 (GlobeNewswire via COMTEX) -- 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(R) (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(R) 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
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).
Receipt of $10 million milestone payment from Abbott Products Inc. for DM-1796 (June 2010).
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(R) is in Phase 3 clinical development for menopausal hot flashes. 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. Depomed formulates its products and product candidates with its proven, proprietary Acuform(R) 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 Six Months Ended June
June 30, 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)
December
June 30, 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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SOURCE: Depomed, Inc.
CONTACT:
Depomed, Inc.
Sheilah Serradell
650-462-5900
[email protected]
.