NEWARK, Calif., Oct. 21, 2013 /PRNewswire/ -- Depomed, Inc. (NASDAQ: DEPO) today announced that it has sold its interests in royalty and milestone payments under its license agreements in the Type 2 diabetes therapeutic area to PDL BioPharma, Inc. for $240.5 million. Depomed intends to use the sale proceeds to acquire products that will drive long-term growth and build on the company's commercial expertise in pain and neurology.
The interests sold include royalty and milestone payments accruing from and after October 1, 2013: (a) from Santarus with respect to sales of Glumetza ® (metformin HCL extended-release tablets) in the United States; (b) from Merck with respect to sales of Janumet XR ® (sitagliptin and metformin HCL extended-release); (c) from Janssen with respect to potential future development milestones and sales of its investigational fixed-dose combination of Invokana ® (canagliflozin) and extended-release metformin; (d) from Boehringer Ingelheim with respect to potential future development milestones and sales of the investigational fixed-dose combinations of drugs and extended-release metformin subject to Depomed's license agreement with Boehringer Ingelheim; and (e) from LG and Valeant for sales of extended-release metformin in Korea and Canada, respectively.
"Through this sale of our Type 2 diabetes milestone and royalty payments, we have generated a significant infusion of cash equal to approximately 55 percent of our market capitalization without issuing any equity or incurring any debt," said Jim Schoeneck, President and CEO of Depomed. "We intend to focus our cash balance of over $300 million to fund future product acquisitions capable of driving growth into the next decade."
"We believe that our current products, Gralise, Lazanda and Zipsor, will continue to drive product revenue growth," added Schoeneck. "Importantly, we have retained our royalty and milestone interests in our other collaborations, including agreements with Mallinckrodt for MNK 795 and MNK 155, with Janssen for Nucynta ER ® (tapentadol extended-release tablets) and with Ironwood."Depomed also retains all rights in any recoveries from its ongoing patent infringement litigation against Purdue Pharma and ENDO Health Solutions.