Depomed (DEPO)

[loniee]

Here is the transcript of the CC...I added a few at 5.31 a/h myself..
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Depomed (DEPO) and Abbot in Serious Dispute Over Commercial Launch of DM-1796, (Live update in progress)
January 18th, 2011 by admin Leave a reply »


Depomed says:

-Last week Abbot informed Depomed that they are not obligated to launch DM-1796 based on how Abbot interprets the contract.

-Intend to aggressively pursue this

-DEPO expects to see a strong return on DM-1796

- Agreement compels Abbot to cause the 1st commercial sale following FDA approval..

- DEPO: puzzled by Abbot’s reluctance, sounds like Abbot doesn’t think commercial potential return viable
-Solvay did extensive due diligence on market opportunity

-DEPO notes that internal abbot analysis on drug was not shared with DEPO

-Next steps, clear dispute process, mediation the next step, 3 possible scenarios

1st scenario, abbot reevaluates their decision

-2nd Abbot wants to keep rights to DM-1796, but choose not to launch

-3rd DEPO can retain

-DEPO will only consider taking the product back, if funded by Abbot the commercial launch is successful and is cashflow positive

-DEPO does not have resources to launch DM-1796

-DEPO, during the resolution process ABBOtt will continue to keep their obligations

-DEPO CEO, “I AM PERPLEXED BY ABBOTT’s Decision”

-DEPO, FDA decision will come with FDA’s decision on Orphan drug

-3-8 weeks will have a mediation with Abbot

-QnA time:

-Q: With PDUFA coming up with money to be owed?

-Ans. Abbott should fulfill its obligations in terms of milestones

-Q: Sounds like a signal that Abbott is not going to pay on time, if that happens is that a breach?

-A: can’t speak to what would happen if a breach is to happen

-Q_ Why wouldn’t Abbott launch this drug?

-A: We are perplexed, don’t know why, although we aren’t privy to Abbott’s internal analysis

-Q: Who is another partner if Abbott doesn’t want to go ahead?

-A: Not gonna name names of companies.

New caller

-Q: Did mention that Abbott is not obligated to launch, are they obligated to pay the milestone if approved?

-A: Abbott said they would fulfill the contract

-Q: Anything that has changed that they are citing between now and today?

-A: ABT was excited for Orphan drug, didn’t really give us a lot of concrete reasons, sense I have is that company may have reevaluated what assets are best fit for the company, very mixed messages from Abbott,

-Q Seems irrational that this battle wasn’t fought earlier, what is legal strategy going forward?

-A: We were working with the original Solvay forecast for manufacturing

-Q: How long to resolve mediation process? 1month?

-A: One mouth seems plausible, want to resolve quickly

-Q: Are you in labeling discussions with the FDA and is there a commercial name?

-A: yes there is a commercial name, won’t comment on labeling discussions, high likelihood of meeting the PDUFA date on time.

-Q: How much money will change hands here?

-A; Can’t disclose the size of amount on CC
New Caller:

-Q: When is the Orphan drug status was granted?

-A: In november we were notified

-Q: Actual NDA has Abbott’s name on it, does that mean that people at Depomed do not know the substance of the conversations with the FDA?

-A; FDA will naturally go to Abbott, but Abbott is contractually obligated to FDA discussions, often we are a party to “some” of those discussions with the FDA

-Q: How informed are you as to the FDA discussions, Highly, med, low?

-A: Very highly informed

-Q: If depomed gets control back, how do you get manufacturing back in line?

-A: Same manufacturing site as used for technology in the past

-q: So no slippage of time in the manufacturing process?

-A: that is correct

-Q: If funding was not an issue to reacquisition, what would be the critical path to get it launched?

-A: Critical path would be getting name on the samples and the product, could hire a small sales focused sales force that can be done rapidly, but won’t match Abbott’s sales power, we think we could launch on time if we were in the position to

-A: We can launch on time

-Q: Partner question? Did you have discussion regarding rest of world rights?

-A: in our discussions with rights in rest of world the topic of U.S. rights has come up over and over,

New caller: jason from Zack’s Investment:

-Q: Was there any provision that would give abbott and out?

-A: No, they have no out

-Q:What are Abbott specific rights

-A: PHN in North America and develop the product for other indications in Pain (fibro the big one), we own non-pain rights like RLS

-Q: Do you think abbott is trying to get a better deal?

-A: I can’t comment on that directly, we have been very open with Abbott and have not shut the door on any discussions (”hint, hint,” my words not depo’s )

-Q: If you id budge which is more important upfront Milestone or royalty rate if you have to negotiate?

–A: I can’t answer that.

Call over