NEW YORK (AP) – A JMP Securities analyst has raised the rating for Depomed Inc.’s stock to “Market Outperform”, predicting strong sales of its pain drug Gralise.
Gralise was approved in January 2011 as a treatment for pain following the viral infection shingles. Analyst Jason Butler said early sales of the drug have been encouraging, and said they could peak at $200 million per year by 2018. He added that the company could gain more revenue from additional license of its extended-release Acuform drug delivery technology.
Butler set a price target of $8 per share on Depomed stock.
The Menlo Park, Calif., company has two approved drugs: Gralise, and Glumetza, a treatment for type 2 diabetes. In March Depomed said it would regain the rights to Gralise from Abbott Laboratories Inc. because the companies ended a licensing agreement. Depomed had licensed Gralise to Solvay Pharmaceuticals, which was acquired by Abbott in 2010. Gralise is a version of gabapentin, a treatment for pain and epilepsy that has been on the market for more than a decade. Gralise can be taken only once per day, an improvement over older versions.
Acuform technology causes tablets to swell and remain in the stomach for eight to nine hours. That allows the main ingredient of the drug to be gradually released to the upper gastrointestinal tract, which the company says is the best absorption site for many oral medications. In 2011, the company licensed Acuform technology to Boehringer Ingelheim and Ironwood Pharmaceuticals Inc. for use in experimental drugs.
Date: January 5, 2012
Source: Associated Press