Depomed Reports First Quarter 2007 Financial Results.

MENLO PARK, Calif. -- Depomed, Inc. (NASDAQ: DEPO) today announced its financial results for the quarter ended March 31, 2007. For the quarter, a net loss of $10.9 million or $0.26 per share was reported, compared to a net loss of $7.8 million or $0.19 per share for the comparable period in 2006. Cash and investment balances at March 31, 2007 were $25.8 million.

Revenues increased to $3.8 million in the first quarter of 2007 from $1.3 million in the same period of 2006 primarily as a result of $1.3 million of product sales and $1.3 million of license revenue for the company's commercialized diabetes product, Glumetza[TM]. Operating expenses for the quarter ended March 31, 2007 were $14.8 million compared to $9.6 million for the same period in 2006. The increase was primarily due to expenses associated with the commercialization of Glumetza, legal expenses related to the ongoing patent infringement case against IVAX and expenses related to the ongoing Phase 3 clinical trial for Gabapentin GR[TM] for the treatment of postherpetic neuralgia (PHN). Additionally, stock-based compensation expense for the first quarter of 2007 was $493,000.

"We have begun 2007 with positive news on the clinical and commercialization front," said John F. Hamilton, chief financial officer of Depomed. "In the first quarter, we announced completion of enrollment for the Phase 3 clinical trial for Gabapentin GR for PHN and filed an Investigational New Drug application for the use of Gabapentin GR to treat menopausal hot flashes. In addition, we have supported the new detailing program that our partner King Pharma has put in place to further increase market share for Glumetza. We have already seen positive results from the new detailing program. In the near term, we are looking forward to announcing the top line data from our Phase 3 Gabapentin PHN trial mid year."

Depomed will host a conference call and webcast to discuss first quarter 2007 financial results today, Tuesday, May 8, at 5:00 p.m. ET. The webcast can be accessed on the investor section of the Depomed website at www.depomedinc.com.

About Depomed

Depomed, Inc., is a specialty pharmaceutical company with two approved products on the market and multiple product candidates in its pipeline. The company utilizes its proven, proprietary AcuForm[TM] drug delivery technology to improve existing oral medications, allowing for extended, controlled release of medications to the upper gastrointestinal tract. Benefits of AcuForm-enhanced pharmaceuticals include the convenience of once-daily administration, improved treatment tolerability and enhanced compliance and efficacy. Glumetza[TM] (metformin hydrochloride extended release tablets) is approved for use in adults with type 2 diabetes and is being marketed in the United States by King Pharmaceuticals and in Canada by Biovail Corporation. ProQuin([R]) XR (ciprofloxacin hydrochloride) extended release tablets are approved in the United States for the once-daily treatment of uncomplicated urinary tract infections and is marketed by Esprit Pharma. Product candidate Gabapentin GR[TM] is currently in Phase 3 and Phase 2 clinical development for the treatment of two pain indications, postherpetic neuralgia and diabetic peripheral neuropathy, respectively. A Phase 2 clinical trial of Gabapentin GR in menopausal hot flashes is expected to begin in the second quarter of 2007. Additional information about Depomed may be found on its web site, www.depomedinc.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including, but not limited to those related to our expectations regarding collaborative relationships and the performance of our marketing partners; our research and development efforts, including pre-clinical and clinical testing; regulation by the FDA and other government agencies; the timing of regulatory applications and product launches; and other risks detailed in the company's Securities and Exchange Commission filings, including the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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