* To receive upfront license fee of $5 mln
* To also receive additional $5 mln
* Q2 EPS $0.08 vs. est $0.02
Aug 5 (Reuters) - Depomed Inc (DEPO.O) said it licensed the worldwide rights to its Acuform drug delivery technology to Johnson & Johnson’s (JNJ.N) unit for an upfront license fee of $5 million to develop a combination drug, sending its shares up 3 percent after market.
Depomed will also receive from Janssen Pharmaceutica N.V. reimbursements for its formulation work on the project and an additional $5 million license fee on completion of the work.
The company is eligible for an additional milestone as well as a royalty on potential future net sales, it said in a statement.
Acuform drug delivery technology allows for extended, controlled release of medications to the upper gastrointestinal tract.
Depomed has also granted Janssen a right of reference to the regulatory approval application for Depomed’s diabetes drug Glumetza and other related data, for use in developing the combination product.
On a conference call with analysts, the company said resupply of Glumetza could be delayed beyond its scheduled time due to ongoing testing.
In June, the company had recalled 52 lots of the drug due to the presence of traces of a chemical in 500 milligram bottles of the tablet. It had earlier expected to resume shipment by middle of August. [ID:nSGE65G0D0]
Separately, the company also posted better-than-expected quarterly profit, beating analysts’ estimates by 6 cents a share, helped by better product sales. [ID:nWNAB4540]
Revenue more than doubled to $24.4 million, with a $3.4 million increase in Glumetza product sales.
Shares of the company were trading up at $3.40 in after-market trade. They closed at $3.31 Thursday on Nasdaq. (Reporting by Shravya Jain in Bangalore; Editing by Unnikrishnan Nair)