Depomed (DEPO): Positive News Flow But There Is Risk If The Company Manages The Sale - RBC
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RBC Capital analyst, Randall Stanicky, reiterated his Sector Perform rating on shares of DepoMed Inc (NASDAQ: DEPO) noting that news flow is about to pick up meaningfully following (i) last week's press report that DEPO may be preparing to put itself up for sale (ii) the 9/19 Starboard letter underscoring its position ahead of the recently set 11/15 shareholder vote and (iii) NUCYNTA legal decision expected by next Fri.
The NUCYNTA decision is expected from Judge Cecchi by Sept 30 (next Fri) and seems likely to add to the company's value. The analyst is most focused on the '364 patent (Dec 2025), which covers both the IR/ER versions (i.e., all NUCYNTA) and is the more debated of the three patents. The analyst believes that absent big surprises any move on a decision is likely worth ~$1.50 to $2.00.
It's unclear if DEPO will have a response to Starboard but the analyst thinks there is risk in the company running a formal sale process. No change to the price target of $22.
Shares of DepoMed Inc closed at $24.22 yesterday.
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