Depomed, heeding activist's advice, prepares to go up for sale


All that investor pressure from Starboard Value may be getting through to Depomed, which is reportedly ready to take some of its activist’s advice.

The California drugmaker is preparing it put itself on the block, heeding calls from the proxy brawler to explore a sale, sources tell Reuters. Depomed is just waiting for a court decision to clear up some patent exclusivity issues surrounding leading med Nucynta, and after it has that verdict--expected by the end of the month--it’ll jump-start the sales process.

To do so, it’s working with Morgan Stanley, which last year helped beat back a hostile pursuit from Ireland’s Horizon Pharma.


Survey: The Critical Role of Innovation in Launching Successful OTC Products

This research aims to understand the importance of product innovation and dose forms in driving new product design and development, consumer engagement and purchase interest for Over-the-Counter medicines. The first 50 qualified respondents will receive a $5 Amazon gift card. Take the survey now.

While Depomed may not have liked Horizon’s bid, as CEO Jim Schoeneck told FiercePharma in a January interview, “we’re open” to other buyout offers,

"It really is about value and currency, and we're always open to something that can meet those hurdles," he said.

Starboard began agitating for a sale of the $1.3 billion Depomed back in April after announcing it had nabbed a stake of close to 10% in the company. It pointed to that thwarted Horizon takeover--and the major decline in Depomed’s shares that’s occurred since--as proof of need for a change. Not long thereafter, it unveiled plans to request a special meeting where it hoped to gain board control.

But Depomed has done what it can to ensure that meeting falls after it has word on Nucynta, arguing that at that point, shareholders will have all the info they need surrounding the company’s “most important asset” to make an “informed voting decision.”

Starboard, though, isn’t buying that line. The way the rebel investor sees it, Depomed has been attempting “to manipulate our special meeting process and disenfranchise shareholders with needless stratagems,” CEO Jeffrey Smith wrote in a July letter to shareholders. 

- get more from Reuters

Related Articles:
Rebel Depomed investor adds former J&J, Abbott execs to its proposed board slate
Depomed proposes 4-month wait for vote on board overhaul
Rebel Depomed shareholder pushes for complete board turnover
Hedge fund aims to oust Depomed board for 'troubling record'
Depomed isn't anti-takeover, CEO says. It was just anti-Horizon
Impatient Horizon accuses Depomed of stalling its shareholder meeting plans
We warned you, Depomed: Horizon pushes down hostile path

Suggested Articles

An injection that's under FDA priority review as a monthly HIV therapy can suppress the virus even if given every two months, a phase 3 has shown.

Pfizer and Astellas are chasing a new nod for prostate cancer drug Xtandi, and thanks to the FDA, they might not have to wait that long.

Sanofi lost an appeal challenging the ban on its dengue vaccine Dengvaxia in the Philippines, despite an ongoing outbreak there.