Janssen Pharmaceuticals announced the divestiture of NUCYNTA US rights

Depomed, Inc. (NASDAQ: DEPO) today announced that it has entered into a definitive agreement to acquire the U.S. rights to the NUCYNTA franchise from Janssen Pharmaceuticals, Inc. for $1.05 billion. The NUCYNTA franchise includes NUCYNTA® ER (tapentadol) extended release tablets indicated for the management of pain, including neuropathic pain associated with diabetic peripheral neuropathy (DPN), severe enough to require daily, around-the-clock, long-term opioid treatment, and NUCYNTA® (tapentadol), an immediate release version of tapentadol, for management of moderate to severe acute pain in adults. NUCYNTA (tapentadol) oral solution is an approved oral form of tapentadol that has not been launched. The deal will make NUCYNTA the flagship asset in Depomed’s growing portfolio of pain and neurology specialty Pharmaceuticals.

“We believe that NUCYNTA is an ideal strategic fit for Depomed – a rare opportunity to add a proprietary, differentiated drug with a lengthy period of exclusivity that fits precisely into our therapeutic focus,” said Jim Schoeneck, President and Chief Executive Officer of Depomed. “NUCYNTA meets all of our criteria for product acquisition that we have laid out over the past two years.  The NUCYNTA franchise generated U.S. net sales of approximately $166 million for the 12 months ended September 2014. NUCYNTA has composition of matter patent protection to August 2022, a potential pediatric extension into 2023, and additional patents that could extend beyond that timeframe.  Finally, the synergies between NUCYNTA and our existing pain and neurology call points create a number of opportunities to grow not only the NUCYNTA franchise, but to enhance the growth of our current business as well.”

Transaction Details

Depomed will make a cash payment to Janssen of $1.05 billion.  In return, Depomed will assume the U.S. license and related royalty obligations for NUCYNTA to Grunenthal, the originator of tapentadol.

At signing, Depomed placed $500 million into an escrow account which will be released to Janssen upon closing of the transaction.

Depomed expects to raise the remaining capital to complete the transaction through a combination of debt, equity and equity-linked financing prior to closing, with the goal of limiting the dilution impact for existing shareholders.

The transaction has been unanimously approved by Depomed’s board of directors.

The deal is expected to close in the second quarter of 2015, following termination or expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and completion of financing and other customary closing conditions.

The transaction is expected to be immediately accretive and to significantly increase Depomed’s product revenue, cash flow, earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted earnings per share for 2015, 2016 and beyond.  Depomed intends to provide investors with guidance for the combined company promptly after the completion of the transaction.

Operational Plan – Depomed’s Pain and Neurology Expertise has Potential to Accelerate NUCYNTA’s Growth

Depomed intends to re-launch NUCYNTA and NUCYNTA ER with a focus on its dual mechanism of action (MOA).  NUCYNTA ER is the only opioid FDA-approved for both chronic pain and DPN.

Depomed expects to support NUCYNTA and NUCYNTA ER with an expanded sales force of over 250 representatives.

The sales force targets for Depomed’s current products overlap approximately 70% of the NUCYNTA prescriber base, allowing Depomed to capitalize on well-established relationships with key prescribers; the expanded sales force will cover an even higher percentage of the prescribers.

NUCYNTA was approved in the US in November 2008, and NUCYNTA ER was approved in the US in August 2011.


Morgan Stanley & Co. LLC acted as financial advisor to Depomed on the transaction.  Baker Botts L.L.P. acted as legal advisor to Depomed.

About Depomed
Depomed is a specialty pharmaceutical company that commercializes products for pain and CNS disorders.  Gralise® (gabapentin) is a once-daily treatment approved for the management of postherpetic neuralgia. CAMBIA® (diclofenac potassium for oral solution) is a non-steroidal anti-inflammatory drug indicated for acute treatment of migraine attacks with or without aura in adults (18 years of age or older). Zipsor® (diclofenac potassium) Liquid Filled Capsules is a non-steroidal anti-inflammatory drug indicated for relief of mild to moderate acute pain in adults.  Lazanda® (fentanyl) Nasal Spray is an intranasal fentanyl drug used to manage breakthrough pain in adults (18 years of age or older) who are already routinely taking other opioid pain medicines around-the-clock for cancer pain. Gralise and various partner product candidates are formulated with Depomed’s proven, proprietary Acuform® drug delivery technology. Additional information about Depomed may be found at www.depomed.com.

About Tapentadol, NUCYNTA® ER and NUCYNTA®
Tapentadol is a centrally-acting synthetic analgesic. The exact mechanism of action is unknown. The tapentadol molecule is classified as Schedule II of the Controlled Substances Act.

NUCYNTA® ER is an oral analgesic indicated for:

  • the management of moderate to severe chronic pain in adults when a continuous, around-the-clock opioid analgesic is needed for an extended period of time.
  • neuropathic pain associated with diabetic peripheral neuropathy (DPN) in adults severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.

Limitations of Use
Reserve NUCYNTA ER for use in patients for whom alternative treatment options are ineffective, not tolerated, or would be otherwise inadequate to provide sufficient management of pain. NUCYNTA ER is not indicated as an as-needed analgesic.