Depomed picks up loan for second half of $1.05B Nucynta acquisition from J&J

Depomed CEO Jim Schoeneck

After securing U.S. rights to Janssen's Nucynta franchise in mid-January this year, Depomed ($DEPO) has now raised enough to pay for it in full. Nucynta fits nicely into Depomed's cadre of pain and neurological treatments, and the Newark, CA-based company's Acuform drug delivery tech already gives Nucynta an edge as an oral treatment.

This week, Depomed pulled in a $575 million debt facility from Deerfield and Pharmakon Advisers to add to another $500 million it had readied back in January. The acquisition itself will cost the company $1.05 billion altogether.

Nucynta is among several divestments J&J's ($JNJ) Janssen has undertaken the last few years, including its sexual lubricant brand K-Y to Reckitt Benckiser and its Ortho Clinical Diagnostics unit to the Carlyle Group. These are small, however, when compared to some of the bigger Big Pharma cutbacks in recent years.

For Depomed, the acquisition comes during a period of bulking up, which has made three deals since launching its project four years ago. These gave Depomed such drugs as the postherpetic neuralgia treatment Gralise, the anti-inflammatory Cambia and the pain drugs Zipsor and Lazanda. Nucynta, though, is expected to become Depomed's flagship asset.

The loan to Depomed will have a term of 7 years, according to the company.

"This facility allows Depomed to close the Nucynta transaction without dilution to our shareholders while allowing us flexibility as we continue to look for assets to further grow our business," Depomed CEO Jim Schoeneck said in a statement. "We said in January when we announced the acquisition that minimizing dilution to our shareholders was a primary goal and we more than met that goal."

Schoeneck told sister publication FiercePharma at January's JPMorgan Healthcare Conference: "We believe that Nucynta is an ideal strategic fit for Depomed--a rare opportunity to add a proprietary, differentiated drug with a lengthy period of exclusivity that fits precisely into our therapeutic focus."

- here's the Depomed release