Depomed Takes Action to Support Momentum in ProQuin(R) XR Sales; The Company Amends Marketing Agreement with Esprit Pharma.MENLO PARK, Calif. -- Depomed, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DEPO DEPO Delegated Episcopal Pastoral Oversight DEPO Devils Postpile National Monument (US National Park Service) DEPO Defence Export Promotion Organization (Pakistan) DEPO Double Even Pass Odd ) announced today that it has amended its license agreement with Esprit Pharma for the marketing of ProQuin(R) XR. Under revised terms, Depomed has been granted co-promotion rights, which will enable Depomed to promote the product through its own sales force or through a contract sales organization or other third party. In addition, Depomed representatives will sit on a joint marketing team, which will review all promotional and marketing activities for ProQuin XR. The amended agreement also provides for minimum detail obligations on the part of Esprit applicable through 2006, which had not been part of the original agreement. Depomed has also extended the due date for the $10 million license fee payable by Esprit until December 2006 rather than July 2006 to provide Esprit with financial flexibility for continued promotional emphasis on ProQuin XR. "We continue to believe in the potential of ProQuin XR and have taken steps to be more active in the commercialization of the product," said John W. Fara, Ph.D., chairman, president and chief executive officer of Depomed. "As we move forward to further assist Esprit's commercialization efforts, we intend to begin discussions with potential sublicense partners over the next several months to expand and complement Esprit's sales force reach." Carl Pelzel, executive vice president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Depomed added, "In recent weeks, market penetration for ProQuin(R) XR has significantly improved as a result of our response to the market's demand for a 3-tablet blister pack, with prescriptions dramatically increasing from approximately 475 per week in early June to over 1100 by month end. Today's action is intended to help ensure continued momentum in the market adoption of ProQuin XR. While Esprit continues to be responsible for marketing expenses, we look forward to taking an active role in sales and marketing strategy through the joint marketing team. Additionally, the payment extension on the license fee will provide Esprit financial flexibility to continue to focus resources on the commercial success of ProQuin XR." The amendment to the agreement also provides for royalties paid to Depomed for ProQuin XR sales in the fourth quarter of 2005, substantially all of which related to the initial stocking of the product, to be credited toward Esprit's $4.6 million minimum royalty obligation for 2006 sales. The credit will not exceed $2 million. Esprit's minimum royalty obligation in subsequent years remains at $5.0 million, and the royalty rate of 15 percent to 25 percent on ProQuin XR net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight was not changed. Esprit also remains obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to pay Depomed a $10 million license fee in July 2007. Depomed and Esprit originally entered into their ProQuin XR license agreement granting Esprit U.S. marketing and distribution rights in July 2005. At that time, Esprit made a $30 million license fee payment to Depomed. The parties' ProQuin XR co-promotion agreement grants Depomed co-promotion rights on up to 40,000 physicians not called upon by Esprit's sales force. The agreement does not obligate obligate /ob·li·gate/ (ob´li-gat) pertaining to or characterized by the ability to survive only in a particular environment or to assume only a particular role, as an obligate anaerobe. Depomed to co-promote ProQuin XR. The co-promotion agreement allows Depomed to exercise its co-promotion directly, through a contract sales organization or through other third parties. Depomed will receive a co-promotion fee of 18 percent on net sales, in addition to its royalty under the license agreement, based on sales generated by physicians called upon by Depomed's sales force. The co-promotion agreement has a four-year term. About Depomed Depomed, Inc. is a specialty pharmaceutical company utilizing its innovative AcuForm(TM) drug delivery technology to develop novel oral products and improved, extended release formulations of existing oral drugs. AcuForm-based products are designed to provide once daily administration and reduced side effects Side effects Effects of a proposed project on other parts of the firm. , improving patient convenience, compliance and pharmacokinetic profiles. ProQuin(R) XR (ciprofloxacin hydrochloride ciprofloxacin hydrochloride Ciloxam, Cipro, Cipro I.V., Cipro XR, Ciproxin (UK) Pharmacologic class: Fluoroquinolone Therapeutic class: Anti-infective Pregnancy risk category C ) once daily, extended-release tablets have been approved by the FDA FDAabbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. for the treatment of uncomplicated urinary tract infections and are currently being marketed in the United States. In addition, once daily Glumetza(TM) for the treatment of Type II diabetes Type II diabetes Type II diabetes is the most common form of diabetes and usually appears in middle aged adults. It is often associated with obesity and may be delayed or controlled with diet and exercise. Mentioned in: Diabetic Ketoacidosis has been approved and is currently being marketed in Canada. The company is conducting a Phase III trial in postherpetic neuralgia Postherpetic neuralgia (PHN) Persistent pain that occurs as a complication of a herpes zoster infection. Although the pain can be treated, the response is variable. with its product candidate, Gabapentin GR(TM). Additional information about Depomed may be found at its web site, www.depomedinc.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 ProQuin XR sales and marketing efforts; our co-promotion arrangement with Esprit; increases in sales of ProQuin XR; 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 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and most recent Quarterly Report 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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