Depomed, Inc has provided a license to certain patents directed to metformin extended release technology to Merck & Co, Inc to be used in developing FDCs of sitagliptin and extended release metformin.

"We are delighted to provide Merck with access to certain of our patents related to metformin extended release technology for this important potential therapy for type-II diabetes," said Carl A Pelzel, president and CEO of Depomed. "We are pleased to continue to execute our plan to extract significant value from our delivery technology as we advance our late stage clinical development programmes toward phase-3 data later this year," Pelzel added.

Under terms of the agreement, Merck will receive a non-exclusive license as well as other rights to certain Depomed patents directed to metformin extended release technology. In exchange Depomed will receive a $10 million upfront fee. Depomed is also eligible to receive a milestone payment upon filing of the New Drug Application for the therapeutic candidate, as well as modest royalties on any net product sales for an agreed-upon period. Merck will also be granted a right of reference to the New Drug Application covering Depomed's Glumetza (extended release metformin hydrochloride tablets) product in Merck's regulatory filings covering fixed dose combinations of sitagliptin and extended release metformin. Depomed has no development obligations under the agreement.

Depomed is a specialty pharmaceutical company with two product candidates in Phase 3 clinical development, two approved products on the market and other product candidates in its early stage pipeline.