Depomed buys suite of Janssen pain drugs for $1bn

Tapentadol is a centrally acting analgesic with a dual mode of action as an agonist of the μ-opioid receptor and as a norepinephrine reuptake inhibitor. Its analgesic properties come into effect within thirty-two minutes of oral administration.

Nucynta oral solution is an approved oral form of tapentadol that has not been launched. The deal will make Nucynta the flagship asset in Depomed’s growing portfolio of pain and neurology specialty pharmaceuticals.

Depomed will make a cash payment to Janssen of $1.05 billion. In return, Depomed will assume the U.S. license and related royalty obligations for Nucynta to Grunenthal GmbH, the originator of tapentadol.

At signing, Depomed placed $500 million into an escrow account which will be released to Janssen upon closing of the deal. Depomed expects to raise the remaining capital to complete the deal through a combination of debt, equity and equity-linked financing prior to closing, with the goal of limiting the dilution impact for existing shareholders.

The deal, wich is expected to close in the second quarter of 2015, is expected to be immediately accretive and to significantly increase Depomed’s product revenue and adjusted earnings per share for 2015, 2016 and beyond.

Nucynta was approved in the US in November 2008, and Nucynta ER was approved in the US in August 2011.Depomed plans to re-launch Nucynta and Nucynta ER with a focus on its dual mechanism of action. Nucynta ER is the only opioid FDA-approved for both chronic pain and DPN.

Janssen Pharma will retain license rights to Nucynta, Nucynta ER extended-release tablets and Nucynta oral solution in Canada, Japan, and a number of other countries outside the United States.