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DepoMed, Inc. Announces Year-End Results

March 19, 1998 at 12:00 AM EST
FOSTER CITY, CA - March 19, 1998 - DepoMed, Inc. (Nasdaq: DPMD) reported revenues of $605,000 for the year ended December 31, 1997, resulting from research and development payments in connection with its ongoing development work with Bristol-Myers Squibb. Revenues were $318,000 in 1996. The Company recorded a loss of $1,236,000, or $0.28 per share, for the year ended December 31, 1997 compared to a loss of $473,000, or $0.12 per share, in 1996. Cash and cash equivalents were $4,130,000 at December 31, 1997.

For the three months ended December 31, 1997, the Company reported revenues of $149,000 compared to $69,000 in the same period of the prior year. Net loss for the three months ended December 31, 1997 was $432,000, or $0.09 per share, compared to $125,000, or $0.03 per share, in the same period of the prior year.

"The increase in revenues is due to a full year of working in collaboration with Bristol-Myers Squibb on a gastric retention system for one of their drugs," said John F. Hamilton, DepoMed's vice president and CFO. "We anticipate that the R&D revenues from the Bristol-Myers Squibb project, which was initiated in mid-1996, will decline in 1998 as a result of our having completed most of the technology transfer for the manufacture of the Gastric Retention system. The Company expects to receive R&D revenues from the just-announced feasibility agreement with the R. W. Johnson Pharmaceutical Research Institute, a Johnson and Johnson unit."

"Moreover," Hamilton continued, "with the closing of the $8 million private placement in February of 1998, we will be able to build the laboratory capacity and technical staff capabilities to take on additional R&D relationships."

DepoMed, Inc., a development stage company, is engaged in the development of new and proprietary oral drug delivery technologies. The Company has developed two types of proprietary oral drug delivery systems, the Gastric Retention System, designed to be retained in the stomach for an extended period of time while it delivers the incorporated drug or drugs, and the Reduced Irritation System, designed to reduce gastrointestinal irritation, a side effect of many orally administered drugs.

The statements in this press release that are not historical facts are forward-looking statements that involve risk and uncertainties, including fluctuations in operating results and risks associated with the development of products, technological changes, FDA and other regulatory approvals, dependence on and need for collaborative partners, competition, uncertainty relating to patent and proprietary rights and other risks identified in the Company's registration statement on Form SB-2 (File No. 333-25445) and quarterly report on Form 10-Q, filed with the Securities and Exchange Commission. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue relevance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated events.

(Summary financial information follows)

DEPOMED, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

DepoMed, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1997