Stock Update (NASDAQ:DEPO): Depomed Inc Announces Closing of Acquisition of U.S. Rights to Cebranopadol From Grunenthal

Depomed Inc (NASDAQ:DEPO) announced that on December 30, 2015 it closed the acquisition of the U.S. and Canadian rights to cebranopadol and its related follow-on compound from Grünenthal GmbH (“Grünenthal”). This follows the company’s receipt of termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Cebranopadol is a novel, first-in-class analgesic in development for the treatment of moderate to severe chronic nociceptive and neuropathic pain.

“We are pleased to add this first-in-class, late-stage molecule to our commercial portfolio as it marks a further transformation of Depomedinto a leading pain company,” said Jim Schoeneck, President and Chief Executive Officer of Depomed. “With the close of this transaction, our goals in the coming year are to present the results from various completed Phase II studies that enrolled over 2,000 patients, conduct an End-of-Phase-II meeting with the FDA as well as execute certain studies in support of Phase III drug product manufacturing. We anticipate advancing cebranopadol into Phase III trials for chronic lower back pain and other pain indications by 2017.”

Transaction Details

As previously announced on November 17, 2015, as part of the acquisition of cebranopadol, Depomed entered into a settlement agreement with Endo Pharmaceuticals, Inc., a subsidiary of Endo International Plc (“Endo”) to resolve Depomed’s ongoing patent litigation against Endo for alleged infringement of three of Depomed’s patents by Endo’s OPANA® ER product.  As the formulator of OPANA® ER, Grünenthal indemnified Endo for certain intellectual property matters, including Depomed’s ongoing patent infringement lawsuit againstEndo. The settlement agreement granted Endo a non-exclusive patent license in the United States, and a covenant not to sue outside the United States, for the currently marketed form of OPANA® ER. In addition, Depomed is providing Grünenthal with a limited covenant not to sue under certain Depomed Acuform® drug delivery patents with specific drug substances as well as $25 million in cash. (Original Source)

Shares of Depomed Inc opened today at $17.73 and are currently trading up at $17.74. DEPO has a 1-year high of $33.74 and a 1-year low of $15.03. The stock’s 50-day moving average is $18.79 and its 200-day moving average is $23.50.

On the ratings front, Depomed has been the subject of a number of recent research reports. In a report issued on December 3, Cantor Fitzgerald analyst Chiara Russo reiterated a Buy rating on DEPO, with a price target of $29, which represents a potential upside of 63.6% from where the stock is currently trading. Separately, on November 30, Roth Capital’s Scott Henry reiterated a Buy rating on the stock and has a price target of $24.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Chiara Russo and Scott Henry have a total average return of 0.3% and 8.6% respectively. Russo has a success rate of 46.4% and is ranked #2110 out of 3648 analysts, while Henry has a success rate of 40.0% and is ranked #393.

Overall, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $28.33 which is 59.8% above where the stock opened today.

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

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