When Depomed Inc. (NASDAQ: DEPO) reported its third-quarter financial results after the markets closed on Monday, it posted $0.28 in earnings per share (EPS) and $110.5 million in revenue. The consensus estimates from Thomson Reuters had called for $0.35 in EPS and revenue of $127.22 million. The same period of last year reportedly had EPS of $0.33 and $104.86 million in revenue.
During this quarter, a settlement agreement was reached with activist firm Starboard Value regarding the inclusion of three additional independent directors — James P. Fogarty, Robert G. Savage and James L. Tyree — to Depomed’s board of directors.
Nucynta products had net sales of $65.29 million, also recording an all-time monthly high prescription volume of over 30,000 in August. Gralise third-quarter net sales totaled $21 million and Cambia net sales were a record $9.1 million, an increase of 29% compared to $7 million in the same period last year. Finally, Lazanda net sales were a record $8.2 million, an increase of 50% compared to $5.4 million in the same period last year.
On the books, Depomed cash, cash equivalents and marketable securities totaled $137.09 million at the end of the quarter, versus $209.77 million at the end of 2015.
Jim Schoeneck, president and chief executive of Depomed, commented:
Although our third quarter revenues increased by 5% over the previous year’s quarter, they did not meet our expectations, as several factors, including a disconnect between prescription demand and wholesaler shipments, influenced net sales of the NUCYNTA franchise and Gralise. Prescriptions for NUCYNTA ER grew 4% over the second quarter, while shipments to wholesalers were down 1%. Prescriptions for NUCYNTA and Gralise were equal to the second quarter, however, shipments were down 6% and 12%, respectively. In addition, we made adjustments to our reserve accounts, including managed care and PBM rebate submissions from prior quarters, which impacted our product net sales.
Shares of Depomed were last seen down 20.5% at $18.20 on Tuesday, with a consensus analyst price target of $26.27 and a 52-week trading range of $12.25 to $27.02.