Depomed, Inc. (Nasdaq: DEPO) today announced that Janssen Pharmaceuticals, Inc., has licensed rights to Depomed's Acuform gastric retentive drug delivery technology. Under the terms of the agreement Janssen received a non-exclusive license and other rights to certain Acuform patents. In exchange, Depomed will receive an upfront payment of $10 million and will receive a low single digit royalty on net sales of NUCYNTA® ER (tapentadol extended-release tablets) in the U.S., Canada and Japan from and after July 2, 2012 through December 31, 2021. In addition, Depomed is eligible for a one-time sales milestone upon achievement of a specified level of quarterly net sales. Depomed has no development obligations under the agreement and expects to recognize the $10 million payment as revenue in the third quarter of 2012.
"We are pleased to expand our positive working relationship with Janssen and to provide them rights to our patents," said Jim Schoeneck, President and Chief Executive Officer of Depomed. "This agreement will immediately provide Depomed with a new and growing royalty stream."