Company Update (NASDAQ:DEPO): Depomed Inc Reports Record Fourth Quarter And Full Year 2015 Financial Results


Depomed Inc (NASDAQ:DEPO) reported financial results and highlighted operational achievements for the quarter and twelve months ended December 31, 2015 and provided 2016 guidance.

“2015 was an exceptional year for Depomed as the company executed on its key growth strategies, delivered record sales and integrated two important acquisitions, creating one of the most differentiated pain portfolios in the industry,” said Jim Schoeneck, President and CEO of Depomed. “Our flagship franchise, NUCYNTA, continues to exceed our expectations and delivered quarterly net sales of $68 million. Our portfolio is performing well with NUCYNTA ER, Gralise, Cambia, and Lazanda achieving all-time high prescription volumes in December. With a business that is strong and continues to grow, we are projecting full year 2016 revenue in the range of $485 to $525 million. Depomed is in a great position with strong organic growth and sales compounded annual growth rate of 132% since 2012. We are committed to building on this success, driving growth across the existing portfolio and continuing to seek acquisition opportunities to deliver long-term shareholder value.”

Business and Financial Highlights Demonstrate Successful Execution of Growth Strategy

  • Record full year net product sales for 2015 were $342 million, an increase of 200% compared to $114 million for full year 2014
  • Full year non-GAAP adjusted earnings of $48 million, or $0.70 per share; non-GAAP adjusted earnings includes a reduction of $10 million, or $0.13 cents per share related to the tax treatment of the cebranopadol transaction, which closed in December
  • Full year non-GAAP adjusted EBITDA of $111 million
  • Fourth quarter 2015 net product sales were a record $111 million, an increase of 228% compared to $34 million for fourth quarter of 2014
  • NUCYNTA franchise recorded fourth quarter net sales of $68 million
  • Fourth quarter ending cash was $210 million; cash generated during the quarter was $60 million and $167 million for the first nine months since the close of the NUCYNTA acquisition, in both cases before payment of the $25 million cebranopadol licensing fee in December
  • Quarterly non-GAAP adjusted earnings of $11 million, or $0.16 per share; non-GAAP adjusted earnings includes a reduction of $10 million, or $0.13 cents per share related to the tax treatment of the cebranopadol transaction
  • Quarterly non-GAAP adjusted EBITDA of $39 million
  • Acquisition of cebranopadol, a novel, late-stage, first-in-class analgesic in development for the treatment of chronic nociceptive and neuropathic pain
  • Company prevailed on all disputed claim constructions in the Markman ruling in NUCYNTA and NUCYNTA ER patent litigation

Portfolio Delivering Record Prescription Volume

NUCYNTA (tapentadol and tapentadol extended release) growth continues to accelerate

  • Fourth quarter net sales of $68 million, a 55% increase over the $44 million sold by Janssen in fourth quarter 2014
  • Net sales of $190 million since acquisition of NUCYNTA on April 2, 2015
  • NUCYNTA ER December year-over-year prescription volume growth of 20.7% 1
  • NUCYNTA ER record all-time high prescription volume of over 30,000 reached in December 1

Gralise® (gabapentin)

  • Full-year net sales of $81 million, an increase of 34% compared to $60 million in 2014
  • Fourth quarter net sales were a record $22 million, an increase of 20% compared to $18 million in the same period last year
  • 2015 total prescriptions of over 327,000, an increase of 13% over 20141
  • Record all-time monthly high prescription volume of over 29,000 reached in December 1

Cambia® (diclofenac potassium for oral solution)

  • Full-year net sales of $27.4 million, an increase of 26% compared to $21.7 million in 2014
  • Fourth quarter 2015 net sales were a record $8.2 million, an increase of 30% compared to $6.3 million in the same period last year
  • 2015 total prescriptions of over 136,000, an increase of 28% over 2014 1
  • Record all-time monthly high prescription volume of over 13,000 reached in December 1

Lazanda® (fentanyl) Nasal Spray (CII)

  • Full-year net sales of $17.7 million, an increase of 154% compared to $7.0 million in 2014
  • Fourth quarter net sales of $5.2 million, an increase of 96% compared to $2.7 million in the same period last year
  • Total bottles for the full year were over 71,000, an increase of 138% over 2014 1
  • Record all-time monthly high volume of over 7,000 bottles reached in December 1. (Original Source)

Shares of Depomed slipped 1.5% in after-hours trading. DEPO has a 1-year high of $33.74 and a 1-year low of $13.27. The stock’s 50-day moving average is $15.97 and its 200-day moving average is $20.57.

On the ratings front, Depomed has been the subject of a number of recent research reports. In a report released today, Mizuho analyst Irina Rivkind Koffler maintained a Hold rating on DEPO, with a price target of $19, which represents a potential upside of 7.5% from where the stock is currently trading. Separately, on February 9, UBS’s Ami Fadia initiated coverage with a Buy rating on the stock and has a price target of $22.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Irina Rivkind Koffler and Ami Fadia have a total average return of 33.4% and 34.1% respectively. Koffler has a success rate of 57.8% and is ranked #5 out of 3637 analysts, while Fadia has a success rate of 80.0% and is ranked #112.

The street is mostly Bullish on DEPO stock. Out of 5 analysts who cover the stock, 4 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $20.50, which implies an upside of 16.0% from current levels.

DepoMed Inc is a specialty pharmaceutical company focused on pain and other conditions and diseases of the central nervous system.