Santarus and Depomed Announce New U.S. Commercialization Agreement for GLUMETZA Prescription Products

Santarus, Inc. SNTS and Depomed, Inc. DEPO today announced that they have entered into a new commercialization agreement for GLUMETZA® (metformin hydrochloride extended release tablets) under which Santarus will assume broad commercial, manufacturing and regulatory responsibilities to replace a promotion agreement that the companies entered into in July 2008. Under the new agreement, Santarus will record revenue from GLUMETZA sales in the U.S. effective September 1, 2011 and over the next few months Depomed will transition most U.S. commercial activities for GLUMETZA to Santarus including managed care contracting, pricing, certain manufacturing activities and distribution. In addition, Depomed will transfer to Santarus the New Drug Application for GLUMETZA and Santarus will be responsible for the product's pharmacovigilance activities in the U.S. Depomed will have an option for expanded rights to co-promote GLUMETZA to physicians not called on by Santarus. Under the terms of the new commercialization agreement, Santarus will pay Depomed royalties on net sales of 26.5% in 2011, 29.5% in 2012, 32.0% in 2013 and 2014, and 34.5% in 2015 and beyond. Santarus will pay no additional sales milestones to Depomed that were required under the prior promotion agreement. The new agreement provides for a reduced minimum spend obligation for Santarus for promotional expenses and streamlines the oversight of the brand. In addition, Santarus will reimburse Depomed for 70% of its future costs in ongoing Paragraph IV litigation for GLUMETZA. If Depomed elects to co-promote GLUMETZA, Santarus will be obligated to pay a royalty of 70% of the net sales attributable to prescriptions generated by Depomed's called on physicians over a pre-established baseline.