UPDATE 3-Depomed's pain drug meets main goal, shares soar

* Says pain drug meets main goal in late-stage study

* Solvay to submit NDA for DM-1796 in Q1 2010

* Depomed expects to submit NDA for Serada in Q1 2010

* Depomed shares up 41 pct (Updates share movement; adds CEO comments, details)

By Anuradha Ramanathan

BANGALORE, Oct 5 (Reuters) - Depomed Inc (DEPO.O) said its experimental neuropathic pain drug met the main goal of a late-stage trial, sending its shares up 41 percent to a new three-year high.

The company said an 1800 milligram dosage of its drug DM-1796 significantly reduced pain associated with postherpetic neuralgia (PHN) compared with a dummy drug.

DM-1796 is a once-daily tablet formulation of gabapentin, which is used to treat seizures and PHN -- a neuropathic pain syndrome that usually follows an outbreak of shingles.

Depomed and its partner Solvay Pharmaceuticals Inc, the pharmaceutical arm of Belgian drugmaker Solvay (SOLB.BR), expect to submit the marketing application for DM-1796 to the U.S. Food and Drug Administration by the end of first quarter of 2010.

All of Solvay Pharmaceuticals' contractual obligations, including the drug's launch, sales and marketing, will be transferred to Abbott Laboratories Inc (ABT.N) if it acquires the Solvay unit, the company said in a conference call.

Depomed stands to receive about $70 million in milestone payments from Solvay if DM-1796 gets FDA approval.

"That is very empowering from a financial perspective," Chief Executive Carl Pelzel told Reuters. He added that this milestone cash payment would "keep us away from the capital markets."

The company had cash, cash equivalents and marketable securities of about $84 million as of June 30.

Trial results for Depomed's late-stage experimental drug Serada to treat postmenopausal hot flashes would be released this month, the CEO added.

He expects to file the New Drug Application for Serada in the first quarter of 2010.

Separately, GlaxoSmithKline PLC (GSK.L) and its partner Xenoport Inc (XNPT.O) said a 3600 mg per day dosage of their PHN drug GSK1838262 -- another formulation of gabapentin -- significantly reduced pain compared to a 1200 mg dosage of the drug.

GlaxoSmithKline is studying GSK1838262 in patients who showed inadequate response to gabapentin doses of 1800 mg a day.

Depomed shares soared as much as 41 percent, before paring some gains to trade up $1.23 at $5.64 Monday. The stock was the biggest percentage gainer on Nasdaq.

Shares of Xenoport was trading up $1.47 at $21.30. (Editing by Aradhana Aravindan)