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news.Depomed and King Pharmaceuticals have terminated their promotion agreement for Glumetza, a once-daily extended-release formulation of metformin for the treatment of patients with type 2 diabetes.
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Pursuant to the terms of the termination agreement, King has paid Depomed termination and other fees of approximately $30 million, and Depomed will not pay King a promotion fee for the quarter ending December 31, 2007.
King will fulfill its Glumetza promotion obligations through the end of 2007. Payments to Depomed associated with the termination of the promotion agreement were included as part of the estimated restructuring charge King announced on October 18, 2007.
King is restructuring, including cutting 20% of its work force, in order to save costs after the patent on its blood pressure treatment Altace was declared invalid, subjecting it to competition from generic versions.
Steve Andrzejewski, chief commercial officer of King Pharmaceuticals, said: “We believe Glumetza is an excellent product. However, in light of recent events, our strategic plan to maximize long-term growth requires us to increase our focus on our neuroscience and hospital/acute care platforms.”