Stock Update (NASDAQ:DEPO): Depomed Inc Announces Prepayment of $100 Million of Secured Debt Facility

Depomed Inc (NASDAQ:DEPO) announced that, in accordance with its stated plans and the terms of the secured debt facility with Deerfield and Pharmakon Advisors, LP, today the company prepaid  $100 million of principal amount of its $575 million secured indebtedness. In addition, Depomed paid a prepayment fee of $5 million.

Under the terms of the 7-year loan agreement, which matures in 2022, Depomed has the option to either pay down or refinance the remainder of the $475 million secured indebtedness starting in April 2017, marking the second anniversary of the transaction.

“We are pleased to be able to execute on our stated goal of prepaying the maximum amount allowed under our loan agreement at this 1-year anniversary,” said Jim Schoeneck, president and chief executive officer of Depomed.  “Our ability to do so speaks to the strength of our business and our strong cash flows, which together allow us to de-lever the company and provide the flexibility to pursue future acquisition opportunities.” (Original Source)

Shares of Depomed are up nearly 2% to $14.67 in after-hours trading. DEPO has a 1-year high of $33.74 and a 1-year low of $12.25. The stock’s 50-day moving average is $15.14 and its 200-day moving average is $17.56.

On the ratings front, Depomed has been the subject of a number of recent research reports. In a report issued on March 29, Cantor Fitzgerald analyst Chiara Russo maintained a Buy rating on DEPO, with a price target of $26, which implies an upside of 80.8% from current levels. Separately, on March 28, Roth Capital’s Scott Henry reiterated a Buy rating on the stock and has a price target of $26.

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 -17.5% and -1.2% respectively. Russo has a success rate of 29.4% and is ranked #3690 out of 3775 analysts, while Henry has a success rate of 34.9% and is ranked #2945.

Overall, 2 research analysts have assigned a Hold rating and 6 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 $19.33 which is 34.4% above where the stock opened today.

Depomed, Inc. manufactures and distributes pharmaceutical products. It is a pharmaceutical company, which focuses on the pain and other central nervous system conditions. The company product brands include Gralise, Zipsor, Lazanda, CAMBIA, NUCYNTA ER and NUCYNTA.

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