Depomed Surges on Shingles Drug's OK

NEW YORK ( TheStreet) -- Depomed ( DEPO) was the lone star of Friday's after-hours session as shares of the Menlo Park, Calif.-based drug developer surged following favorable regulatory news.

After the closing bell, Depomed said it's received marketing approval from the Food and Drug Administration of its Gralise one-daily tablets for the treatment of post-herpetic neuralgia, also known as shingles. Gralise also received orphan drug status, which gives it seven years of marketing exclusivity.

The stock was last quoted at $7.37, up 18.1%, on volume of nearly 85,000, according to Nasdaq.com. Based on a regular session close at $6.24, the share had already more than doubled over the past 52 weeks.

Depomed has licensed Gralise to Abbott Products, a unit of Abbott Laboratories ( ABT), and the FDA approval triggers a $48 million milestone payment to Depomed.

The licensing deal with Abbott also includes sales milestone payments of up to $300 million, and calls for Depomed to receive royalties of 14% to 20% on sales of Gralise.

Depomed is slated to report its fourth-quarter results on Feb. 28. The current average estimate of analysts polled by Thomson Reuters is for a profit of 39 cents a share in the December period on revenue of $20.8 million.

-- Written by Michael Baron in New York.

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