April 7, 2008 - Depomed, Inc. (NASDAQ:DEPO) announced today that it has reached a settlement with IVAX Corporation and its parent company, Teva Pharmaceuticals, of all claims associated with the patent infringement lawsuit filed by Depomed against IVAX in January 2006, in which Depomed alleged infringement of Depomed's patents (U.S. Patent Nos. 6,340,475 and 6,635,280) by IVAX's extended release metformin hydrochloride tablets.
The parties have entered into a settlement and license agreement that provides for a one-time payment to Depomed of $7.5 million, and a non-exclusive license to the asserted patents in favor of IVAX and Teva to continue to market their generic Glucophage(R) XR (metformin hydrochloride extended release tablets) product in the United States under Depomed's patents. Depomed will also receive ongoing royalty payments from Teva on sales by IVAX and Teva of generic Glucophage XR. The royalty is subject to a $2.5 million aggregate cap.
The agreement also provides for the parties to dismiss their pending patent litigation and for a release of all claims associated with the litigation.
"We are pleased to have reached a settlement of this matter without further distraction and expense of a trial," said Carl A. Pelzel, Depomed's president and chief executive officer.
"We feel that the rulings made in this case have strengthened the intellectual property estate around our AcuForm(TM) technology," added Matthew M. Gosling, Depomed's vice president and general counsel. "We intend to continue to defend and enforce our IP vigorously."
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