* Recalls 52 lots of Glumetza 500 mg bottles
* Says recall not to impact drug's 1000 mg packs
* Recall due to presence of traces of a chemical
* Sees recall-related costs up to $2 mln
* Drug revenue to be hit in Q2, Q3
(Adds details, analyst comments; updates stock movement)
June 17 Drug developer Depomed Inc (DEPO.O) said
it will recall 52 lots of its diabetes drug Glumetza due to the
presence of traces of a certain chemical in the tablet's 500 mg
The recall followed an investigation of a single product
complaint of a smell and taste consistent with the chemical,
the company said in a regulatory filing.
The chemical compound, 2,4,6-tribromoanisole (TBA), can
cause temporary, non-serious gastrointestinal upset when
present in amounts detectable by smell, the company said.
The recall does not impact the 1,000 mg formulation, which
currently constitutes about 40 percent of total Glumetza net
product sales, Depomed said.
This is the second such TBA-related drug recall this year,
after Johnson & Johnson (JNJ.N) recalled more than 53 million
bottles of over-the-counter products on complaints of "an
unusual odor" in January. The company came under sharp
criticism from U.S. health regulators. [ID:nN15208591].
Depomed said the presence of TBA may have been resulted
from the breakdown of a chemical sometimes applied to wood in
pallets previously used to transport Glumetza product bottles
to its contract manufacturer in Puerto Rico.
The company said it suspended product shipments of 500mg
Glumetza to its customers pending further investigation and was
in discussion with the U.S. Food and Drug Administration (FDA)
on the recall.
It expects to resume shipments in four to eight weeks. The
recall is currently being carried out at the wholesaler level,
the company said.
Depomed expects recall-related costs of up to $2.0 million
and sees the supply disruption to adversely affect Glumetza
product revenues in the second and third quarters.
Santarus Inc SNTS.O, the company's promotion partner for
the drug in the U.S., in a separate regulatory filing, said it
also expects its promotion revenue to be affected in the second
and third quarters, sending its shares down as much as 12
Roth Capital Partners analyst Scott Henry said Glumetza
remained only a modest part of his valuation for the company
and the income statement will take only a minor hit over the
next two quarters, but little thereafter.
The analyst has a "buy" rating on the stock.
Santarus said it plans to focus its promotional efforts on
Glumetza 1000 mg until the supply of Glumetza 500 mg is
As per the agreement between the two companies, Depomed is
required to reimburse Santarus for the costs incurred in
connection with the recall, Santarus said.
Santarus shares were down 7 percent at $2.55. They touched
a low of $2.42 earlier the session. Depomed shares were down 5
percent at $2.93 in morning trade Thursday on Nasdaq.
(Reporting by Krishnakali Sengupta in Bangalore; Editing by