Depomed amends marketing, payment agreement with Esprit Pharma

By Elaine Rigoli

Tampa, Fla., July 24 - Depomed, Inc. said it amended its license agreement with Esprit Pharma for the marketing of ProQuin XR after Esprit failed to make a $10 million license fee payment due Friday.

Under the revised terms, Depomed has been granted co-promotion rights. Further, Depomed representatives will sit on a joint marketing team, which will review all promotional and marketing activities for ProQuin XR.

A $10 million license fee was due to Depomed this month, but Esprit now has been granted an extension until December, according to a news release.

The amendment to the agreement also provides for royalties paid to Depomed for ProQuin XR sales in the fourth quarter of 2005, substantially all of which related to the initial stocking of the product, to be credited toward Esprit's $4.6 million minimum royalty obligation for 2006 sales.

The credit will not exceed $2 million, the release said.

Esprit's minimum royalty obligation in subsequent years remains at $5.0 million, and the royalty rate of 15% to 25% on ProQuin XR net sales was not changed.

Esprit also remains obligated to pay Depomed a $10 million license fee in July 2007. Depomed and Esprit originally entered into their ProQuin XR license agreement granting Esprit U.S. marketing and distribution rights in July 2005. At that time, Esprit made a $30 million license fee payment to Depomed.

Depomed is a specialty pharmaceutical company located in Menlo Park, Calif.

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