PDL BioPharma, Depomed Amend Royalty Agreement

PDL BioPharma, Inc. has amended the Royalty Purchase and Sale Agreement with Depomed, Inc. to acquire all of Depomed’s remaining rights to royalties and milestones payable on sales of type 2 diabetes products licensed by Depomed, for as much as $20 million. Under the original agreement PDL would have shared future royalties equally with Depomed after PDL reached $481 million, which PDL expects to occur by October 2020. 

PDL has made an initial payment of $10 million to Depomed, and an additional $10 million will be payable if Depomed meets certain conditions specified in the amendment. The products covered under the Royalty Agreement include Glumetza and its authorized generic, Jentadueto XR, Invokamet XR and Synjardy XR.

“While our company’s strategic focus has shifted to equity and product investments and away from royalty agreements, our familiarity with the Depomed asset and our past success with it made this transaction highly attractive to PDL and our shareholders,” said John P. McLaughlin, chief executive officer of PDL BioPharma. “We expect the amended transaction to begin yielding returns to PDL in late 2020 and to provide meaningful cash flow through 2026.”