Despite good news about winning a patent battle over one of its premier drugs and settling with activist investors, pain drug maker Depomed (DEPO) delivered bad news with its third-quarter financials.
The Newark, Calif.-based pharmaceutical company reported a 5% bump in revenues year over year to $111 million, but that figure was "well short" of the company's expectations, according to CEO Jim Schoeneck.
Depomed shares took a hit in after-hours trading, with shares falling from a close of $22.89 on Nasdaq to $20, a 12.63% drop.
The company has been the target of persistent takeover rumors after it fended off a hostile $3 billion bid by Horizon Pharma (HZNP) a year ago. On an investor call, Schoeneck declined to directly comment on the rumors, saying it was company policy not to expand on market buzz. "There are always rumors, sometimes people get very hyped up on them, sometimes they don't."
Media reports have stated that possible merger partners have had to sign confidentiality agreements. The Deal previously identified KKR & Co.-backed Arbor Pharmaceuticals LLC and Purdue Pharmaceutical Products LP as possibly targeting Depomed.
The company is working with Morgan Stanley, which advised it on the Horizon fight. Both the company and the investment bank have declined to talk about the latest engagement.
The dip in expected revenues was blamed on a "disconnect between prescription demand and wholesaler shipments." In a statement the company also cited adjustments to reserve accounts tied to managed care as well as PBM rebate submissions which drove down net sales.