West Coast Editor

After sifting through would-be licensors, Depomed Inc. is entering a $50 million deal with Esprit Pharma Inc. to market and distribute Proquin XR, the extended-release form of ciprofloxacin hydrochloride for the treatment of uncomplicated urinary tract infections.

Wall Street liked it. Depomed's stock (NASDAQ:DEPO) jumped 15.2 percent on the news, closing at $5.15, up 68 cents.

"This puts us in a very good financial position to continue to grow the company," John Fara, chairman, president and CEO of Menlo Park, Calif.-based Depomed, told BioWorld Today. The firm has about $70 million in cash with a quarterly burn rate of about $7 million, he said.

Under the terms, Esprit, of East Brunswick, N.J., gets rights to market the drug in the U.S. and Puerto Rico, in return for a $50 million license fee, consisting of $30 million up front, $10 million in 12 months and the final $10 million due in 24 months.

Esprit also will pay Depomed 15 percent to 25 percent royalties on net sales of Proquin XR, based on escalating product sales, and gets the right of first refusal for the sales and marketing in Canada.

Depomed chose Esprit because of its established sales force and complementary product Sanctura (trospium chloride) for overactive bladder, developed by Indevus Pharmaceuticals Inc., of Lexington, Mass., approved in May 2004. Esprit's launch of Proquin XR in the U.S. urology market is expected in the fourth quarter of this year, and other physician markets such as obstetrician-gynecologists will be explored within six months afterward. (See BioWorld Today, June 1, 2004.)

Manufacturing rights remain with Depomed, which also gets guaranteed minimum royalties to be paid annually, and a minimum sales force size to be deployed by Esprit.

Proquin XR was approved in May. A randomized, double-blinded Phase III study in 1,037 patients showed that the slow-release quinolone eradicated 93.4 percent of the bacteria most commonly responsible for causing UTIs, compared to the 89.6 percent seen in patients on twice-daily Cipro (ciprofloxacin) from Leverkusen, Germany-based Bayer AG - with reduced gastrointestinal side effects. (See BioWorld Today, May 23, 2005.)

Fara said Proquin XR likely will "quite easily" enter the market and compete with Cipro, since the drug no longer is promoted and recently was licensed by Bayer to Schering-Plough Corp., of Kenilworth, N.J.

Depomed's version, he noted, showed a fourfold decrease in nausea and sevenfold decrease in diarrhea over Cipro, thanks to the polymer technology that keeps the Proquin XR pill in the patient's stomach.

"It's a swelling tablet, small and very convenient to swallow," Fara said. "Within 15 to 20 minutes in the stomach, it gets to be the size of a nickel. That's telling the stomach that it's a piece of food, basically, that wants to be digested. But it can't be digested, so it stays in the stomach for multiple hours" as the drug is released. Then the polymers fall apart and the remains of the tablet are safely eliminated.

In June, the FDA approved Glumetza, Depomed's once-daily, extended-release formulation of metformin hydrochloride to treat Type II diabetes, partnered with Biovail Corp., of Toronto.

Next in the pipeline, Depomed has Gabapentin GR for pain. A Phase II trial is expected to finish in the fourth quarter, with a Phase III study expected to start in the first quarter, Fara said.

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