By Kim Coghill

Washington Editor

DepoMed Inc. said it started Phase III trials for Metformin GR, a once-daily treatment for Type II diabetes, that is expected to compete in a $2 billion market currently served by Bristol-Myers Squibb Co.¿s Glucophage XR.

Metformin GR uses DepoMed¿s proprietary gastric retention (GR) technology designed for drugs absorbed high in the gastrointestinal tract. Since the stomach retains large objects for further digestion, the company¿s GR System swells following ingestion and is retained in the stomach for a number of hours while it continuously releases the incorporated drug at a controlled rate to absorption sites in the upper intestinal tract.

John Hamilton, chief financial officer for Menlo Park, Calif.-based DepoMed, said the company expects the Phase III trial to be complete in the third or fourth quarter of 2002.

The trial will be held at 60 sites in the U.S. and enrollment is expected to begin in July. Hamilton said the company has yet to disclose the number of participants. The endpoints are hemoglobin a1c levels as well as blood glucose control.

Data from the Phase II trial are undergoing final analysis and are expected to be released in July. Positive interim Phase II results were released in April 2001.

DepoMed is applying its innovative oral drug delivery systems to the development of oral products and improved formulations of existing oral drugs.

Last week, the company raised $12.5 million through the sale of about 2.9 million shares and approximately 1.5 million warrants. Hamilton said the money will be used for general corporate purposes as well as for clinical trials of products in development. (See BioWorld Today, June 15, 2001.)

Other than Metformin GR, DepoMed¿s other products are Ciprofloxacin, an antibiotic, expected to enter Phase II trials in the third quarter, and an undisclosed cardiovascular product expected to enter Phase I trials later this year.

The Reduced Irritation System, the company¿s other proprietary system, is designed to reduce gastrointestinal irritation, a side effect of many orally administered drugs.

DepoMed¿s stock (AMEX:DMI) closed Thursday at $5.20, up 35 cents.