Depomed (DEPO)

[2H2]

Good pipeline recap for DEPO from YMB:

As we approach FDA marketing approval of DM-1796, which is highly likely, it's important to understand that assigning a valuation limit to DEPO based strictly on DM-1796 represents a complete lack of understanding / due diligence with regard to the enormous potential of all of Depo's other pipeline drugs and ignores a large breadth of upside from the following:

DM-1796 deal: multi billion dollar market partnered with ABT / or 100% available for new partner?

Serada: multi billion dollar market for hotflash, first non-hormonal effective treatment, currently in P3 trial under SPA with trial design that should succeed based on prior data.

Covidien deal: multi billion market 4 formulations already delivered representing $64 million payment potential plus royalties, plus right to market direct to women's health and capture much larger royalty.

MRK deal: Januvia XR (licensed from DEPO / coming soon)

JNJ deal: (licensed from DEPO / coming soon)

Parkinsons deal: formulation perfected?

Proper valuation analysis metrics require more than one line, simpleton, binary event posts now appearing every few minutes on this message board. There are multiple shots on goal. Dig into just one of the many opportunities:

Depo is currently under contract with Covidien, the world's largest producer of acetaminophen, to AccuForm FOUR acetaminophen/opioid analgesic combination products, for which Depo has already delivered formulations. Depo's technology is now even more important for Covidien, because the FDA has limited the max dose to 325 mg, with COV consent. Accuform provides the mechanism to deliver a proven steady dose over time and minimize harmful effects from immediate release.

"Under the license agreement between Depomed and Mallinckrodt Inc., a subsidiary of Covidien, Depomed will receive a one-time upfront payment of $4 million, and could receive up to $64 million in additional development milestone payments over the next several years. In addition, Covidien will pay Depomed a royalty on sales of products developed under this license agreement. Covidien will be responsible for all development other than certain initial formulation work. Covidien will pre-pay Depomed for the initial formulation work performed by Depomed under the collaboration.

Depomed will retain the exclusive option to promote the products developed under this license agreement within the Obstetrics/Gynecology specialty field. Once Depomed begins to promote these products, Covidien will pay Depomed a significantly higher royalty on the resulting net sales in this specialty."


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