Healthcare Industry News:  postherpetic neuralgia 

Biopharmaceuticals Drug Delivery Litigation

 News Release - December 18, 2006

Depomed Delivers Notice of Breach and Demand for Arbitration to Esprit Pharma

MENLO PARK, Calif.--(HSMN NewsFeed)--Depomed, Inc. (NASDAQ:DEPO ) today announced that it has delivered a notice to Esprit Pharma, Inc. regarding Esprit's breaches of the parties' Exclusive License and Marketing Agreement for ProQuin® XR, a once-daily extended release formulation of ciprofloxacin for the treatment of uncomplicated urinary tract infections. The breaches involve, among other matters, Esprit's failure to make the $10 million license fee payment due to Depomed under the contract on December 15, 2006, and to use commercially reasonable efforts to market ProQuin XR.

As the license agreement provides for arbitration of disputes under the contract, Depomed has also filed a demand for binding arbitration related to Esprit's breaches of the contract. The demand seeks in excess of $105 million in damages, which includes all license payments, minimum royalty payments, and expected additional royalty payments due through the life of the patents licensed under the contract.

About Depomed, Inc.

Depomed, Inc. is a specialty pharmaceutical company utilizing its innovative AcuForm(TM) drug delivery technology to develop novel oral products and improved, extended release formulations of existing oral drugs. AcuForm-based products are designed to provide once daily administration and reduced side effects, improving patient convenience, compliance and pharmacokinetic profiles. ProQuin® XR (ciprofloxacin hydrochloride) extended-release tablets have been approved by the FDA for the once daily treatment of uncomplicated urinary tract infections and are currently being marketed in the United States. In addition, once daily Glumetza(TM) (metformin hydrochloride extended release tablets) has been approved for use in adults with type 2 diabetes and is currently being marketed in the United States and Canada. The company is conducting a Phase III trial in postherpetic neuralgia and has completed a Phase II trial in diabetic peripheral neuropathy with its product candidate, Gabapentin GR(TM). Additional information about Depomed may be found at its web site,

"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 relationships and disputes with collaborative partners; expectations regarding commercialization of our products; 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 and most recent Quarterly Report on Form 10-Q. 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.

Source: Depomed

Issuer of this News Release is solely responsible for its content.
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