8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  August 5, 2010

DEPOMED, INC.

(Exact name of registrant as specified in its charter)

001-13111

(Commission File Number)

California	94-3229046
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation)

1360 O’Brien Drive, Menlo Park, California  94025

(Address of principal executive offices, with zip code)

(650) 462-5900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On August 5, 2010, Depomed, Inc. issued a press release announcing its financial results for quarter ended June 30, 2010.  The press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits

99.1 Depomed, Inc. Press Release issued on August 5, 2010

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DEPOMED, INC.
Date: August 5, 2010	By:	/s/ Tammy L. Cameron
		Tammy L. Cameron
		Vice President, Finance

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EXHIBIT INDEX

Exhibit	Description
99.1	Depomed, Inc. Press Release issued on August 5, 2010

4

EX-99.1

Exhibit 99.1

DEPOMED REPORTS SECOND QUARTER 2010 FINANCIAL RESULTS

MENLO PARK, Calif., August 5, 2010 — Depomed, Inc. (NASDAQ: DEPO) today reported financial results for the second quarter ended June 30, 2010.

Net income for the three months ended June 30, 2010 was $4.1 million, or $0.08 per share compared to a net loss for the three months ended June 30, 2009 of $9.6 million, or $0.19 per share. The receipt and recognition of the $10.0 million milestone payment from Abbott Products Inc. related to the FDA’s acceptance for review of the New Drug Application for DM-1796 for the treatment of post-herpetic neuralgia resulted in the three months ended June 30, 2010 being a profitable quarter.  The results for the three months ended June 30, 2010 also include a total of $2.4 million in charges associated with the Company’s voluntary recall of 52 lots of the 500mg formulation of GLUMETZA® (extended release metformin hydrochloride tablets).

Revenue for the three months ended June 30, 2010 was $24.4 million compared to $11.6 million for the three months ended June 30, 2009.  The 110% increase in revenue year-over-year was primarily attributable to receipt and recognition of the $10.0 million milestone payment from Abbott Products Inc. and a $3.4 million increase in GLUMETZA product sales.

Operating expenses for the three months ended June 30, 2010 were $17.2 million compared to $20.0 million for the three months ended June 30, 2009.  The decrease in operating expenses was primarily attributable to a $5.5 million decrease in research and development expenses resulting from decreased clinical research organization costs associated with the Serada® and DM-1796 clinical programs, which was partially offset by a $2.5 million increase in promotion fee expense related to the Company’s promotion agreement for GLUMETZA with Santarus, Inc., resulting from increased GLUMETZA product sales. Stock-based compensation expense was $0.5 million for the three months ended June 30, 2010 as compared to $0.7 million for the three months ended June 30, 2009.

Cash, cash equivalents and marketable securities were $76.9 million as of June 30, 2010 compared to $81.8 million as of December 31, 2009.

“We achieved important milestones in the second quarter.  The FDA accepted for filing our licensee’s New Drug Application for DM-1796 for post-herpetic neuralgia, which triggered a $10 million milestone payment to us.  We now look forward to a potential NDA approval milestone of $35 - $60 million in the first quarter of next year.  Also, preparations for Serada’s Breeze 3 trial progressed well and we expect to begin enrolling patients later this quarter,” said Carl A. Pelzel, president and chief executive officer of Depomed.

Second Quarter 2010 Highlights

·FDA acceptance for filing of the New Drug Application for investigational post-herpetic neuralgia treatment DM-1796 filed by licensee Abbott Products Inc. (May 2010).

·Receipt of $10 million milestone payment from Abbott Products Inc. for DM-1796 (June 2010).

·Announced the results of a new clinical study that demonstrated patients with type 2 diabetes may be able to tolerate higher doses of metformin using GLUMETZA (June 2010).

·Initiated a voluntary, wholesaler-level recall of 500mg GLUMETZA (metformin hydrochloride extended release) tablets due to the presence of trace amounts of a chemical called 2,4,6-tribromoanisole (TBA) in bottles containing 500mg GLUMETZA tablets (June 2010).

Conference Call

Depomed will host a conference call today, Thursday, August 5, beginning at 5:00 p.m. ET, 2:00 p.m. PT to discuss its results.  The conference call will be available via a live webcast on the investor relations section of Depomed’s website at http://www.depomed.com.  Access the website 15 minutes prior to the start of the call to download and install any necessary audio software.  An archived webcast replay will be available on the Company’s website for three months.

About Depomed

Depomed, Inc. is a specialty pharmaceutical company with one product candidate through Phase 3 clinical development, another in Phase 3 clinical development, two approved products on the market and other product candidates in its early stage pipeline. Product candidate DM-1796 has completed Phase 3 clinical development and has been licensed to Abbott Products Inc. A New Drug Application for DM-1796 was accepted by the FDA in the second quarter of 2010.  Product candidate Serada® is in Phase 3 clinical development for menopausal hot flashes. GLUMETZA® (metformin hydrochloride extended release tablets) is approved for use in adults with type 2 diabetes and promoted by Santarus, Inc. in the United States. Depomed formulates its products and product candidates with its proven, proprietary Acuform® drug delivery technology, which is designed to improve existing oral medications, allowing for extended, controlled release of medications to the upper gastrointestinal tract.  Benefits of Acuform-enhanced pharmaceuticals include the convenience of once-daily administration, improved treatment tolerability and enhanced compliance and efficacy.  Additional information about Depomed may be found on its website, http://www.depomed.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.

The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including, but not limited to, those related to our clinical development programs; our research and development efforts, including pre-clinical and clinical testing; regulation by the FDA and other government agencies; the timing of regulatory applications and product launches; and other risks detailed in the company’s Securities and Exchange Commission filings, including the company’s Annual Report on Form 10-K.  You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

-Financial Tables Follow-

DEPOMED, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Revenues:
Product sales	$	11,657		$	8,408		$	24,257		$	15,248
Royalties	91			529			179			993
License and milestone revenue	12,671			2,671			15,342			5,239
Total revenues	24,419			11,608			39,778			21,480
Costs and expenses:
Cost of sales	2,981			1,229			4,462			2,261
Research and development expense	4,570			10,024			9,758			20,045
Selling, general and administrative expense:
Promotion fee expense	8,099			5,640			16,978			10,184
Other selling, general and administrative expense	4,541			4,305			8,091			8,763
Total selling, general and administrative expense	12,640			9,945			25,069			18,947
Total costs and expenses	20,191			21,198			39,289			41,253
Income (loss) from operations	4,228			(9,590		)	489			(19,773		)
Other income (expense):
Interest and other income	56			236			150			550
Interest expense	(157		)	(263		)	(340		)	(548		)
Total other income (expense)	(101		)	(27		)	(190		)	2
Net income (loss) before income taxes	4,127			(9,617		)	299			(19,771		)
Provision for income taxes	(1		)	2			(2		)	1
Net income (loss)	$	4,126		$	(9,615	)	$	297		$	(19,770	)
Basic net income (loss) applicable to common stock shareholders per common share	$	0.08		$	(0.19	)	$	0.01		$	(0.39	)
Diluted net income (loss) applicable to common stock shareholders per common share	$	0.08		$	(0.19	)	$	0.01		$	(0.39	)
Shares used in computing basic net income (loss) per common share	52,436,681			51,263,620			52,368,085			51,235,735
Shares used in computing diluted net income (loss) per common share	53,103,623			51,263,620			52,918,507			51,235,735

DEPOMED, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share amounts)

	June 30,			December 31,
	2010			2009
	(Unaudited)			(1)
ASSETS
Current assets:
Cash and cash equivalents	$	22,245		$	26,821
Marketable securities	45,097			42,922
Accounts receivable	4,461			4,933
Inventories	1,476			2,565
Prepaid and other current assets	1,567			1,185
Total current assets	74,846			78,426
Marketable securities, long-term	9,544			12,016
Property and equipment, net	741			942
Other assets	197			197
	$	85,328		$	91,581
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	14,230			15,222
Deferred product sales	1,581			1,635
Deferred license revenue	11,132			11,184
Other current liabilities	437			414
Current portion of long-term debt	3,978			3,747
Total current liabilities	31,358			32,202
Deferred license revenue, non-current portion	36,015			41,306
Long-term debt, net of current portion	121			2,170
Other long-term liabilities	104			177
Commitments
Shareholders’ equity:
Preferred stock, no par value, 5,000,000 shares authorized; Series A convertible preferred stock, 25,000 shares designated, 18,158 shares issued and surrendered, and zero shares outstanding at June 30, 2010 and December 31, 2009	—			—
Common stock, no par value, 100,000,000 shares authorized; 52,546,064 and 52,200,358 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively	189,556			187,895
Accumulated deficit	(171,906		)	(172,202		)
Accumulated other comprehensive gain	80			33
Total shareholders’ equity	17,730			15,726
	$	85,328		$	91,581

(1) Derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

CONTACT:	Sheilah Serradell
	Depomed, Inc.
	650-462-5900
	sserradell@depomed.com