Santarus to sponsor conference call at 10:00 a.m. Eastern time today
Santarus, Inc. (NASDAQ: SNTS) and Depomed, Inc. (NASDAQ: DEPO) today
announced that they have entered into a promotion agreement granting
Santarus exclusive rights to promote Depomed’s
GLUMETZA®
(metformin hydrochloride extended release tablets) prescription products
in the U.S. GLUMETZA is a once-daily, extended-release formulation of
metformin that incorporates patented drug delivery technology and is
indicated as an adjunct to diet and exercise to improve glycemic control
in adults with type 2 diabetes mellitus. Santarus expects to train its
field sales representatives in the third quarter and to begin promotion
of GLUMETZA brand products in the fourth quarter of 2008. Depomed
reported GLUMETZA net sales of $5.2 million in the first quarter of 2008.
Metformin is widely used for the treatment of type 2 diabetes, but many
patients do not achieve optimal dosing levels due to gastrointestinal
(GI) side effects. The advantage of GLUMETZA’s
delivery system is that it allows physicians to rapidly titrate dosing
up to 2000 mg a day, which results in a more optimal level of glycemic
control without significantly increasing GI side effects compared to a
daily dose of 1500 mg of immediate-release metformin.
“We view GLUMETZA as an important addition to
our product portfolio as it addresses a large and growing market in type
2 diabetes,” said Gerald T. Proehl, president
and chief executive officer of Santarus. “We
believe that GLUMETZA is an excellent product to leverage our sales
organization, with good overlap in our called-on physicians in the
primary care market and with growth potential. Based on our current
launch plans, we expect increased promotional expenses for GLUMETZA
commencing in the third quarter of 2008; however, we believe that the
net impact of GLUMETZA will be neutral in the fourth quarter of this
year and accretive in 2009 and beyond.”
Under the terms of the promotion agreement, Santarus paid Depomed a $12
million upfront fee, and based on the achievement of specified levels of
annual GLUMETZA net product sales, Santarus may pay Depomed one-time
sales milestones totaling up to $16 million. Depomed will continue to
record revenue from the sales of GLUMETZA and will pay Santarus a fee
ranging from 75% to 80% of the gross margin associated with net sales of
GLUMETZA, defined as net sales less cost of goods and product-related
fees paid to Biovail Laboratories. Santarus will be responsible for all
costs associated with its sales force and for all other marketing
expenses associated with its promotion of GLUMETZA. A joint
commercialization committee has been formed to oversee and guide the
strategic direction of the GLUMETZA promotion efforts in the U.S.
Depomed will be responsible for overseeing product manufacturing and
supply, and retains the option to co-promote GLUMETZA in the future to
obstetricians and gynecologists (Ob/Gyn).
“We are pleased to work with a highly
motivated and committed partner like Santarus to focus on driving new
prescriptions, launching our new 1000 mg dosage strength and increasing
sales of GLUMETZA,” said Carl Pelzel,
president and chief executive officer of Depomed. “Santarus
has a field-based commercial organization of over 300 sales
representatives to promote GLUMETZA to their targeted physicians. This
organization has demonstrated good results in its promotion of ZEGERID
in the highly competitive proton pump inhibitor market, and we look
forward to strong results with GLUMETZA.”
Conference Call
Santarus has scheduled an investor conference call regarding this
announcement at 10:00 a.m. Eastern time (7:00 a.m.
