Depomed Inc (NASDAQ:DEPO) stock was up on Friday following reports that the company is considering a sale.
Depomed is reportedly working with Morgan Stanley as an advisor for the possible sale. However, the company is waiting for a ruling concerning Nucynta, which is its most popular drug. The decision from this ruling has to do with the exclusivity of the company’s patent for the drug.
Insider sources, who remain anonymous due to the nature of the information, claim that Depomed will start negotiations with potential buyers once the court’s decision has been made. Activist investor Starboard Value LP has been pushing for the sale of the company. It acquired a 10% stake in DEPO stock in April.
Depomed has also seen an increase in trading today. Over 3.51 million shares of DEPO stock has changed hands. This is an increase over its 30-day average of 1.17 million per day.
Depomed was able to hold off a hostile takeover bid last year from Horizon Pharma PLC (NASDAQ:HZNP). The bid was valued at $3 billion and Morgan Stanley helped DEPO fend off the offer. Horizon Pharma said it isn’t interested in placing another bid on the company, reports Reuters.
While Horizon isn’t interested in Depomed anymore, that doesn’t mean it stopped looking at companies to acquire. It just announced earlier this week that it has signed an agreement to acquire Raptor Pharmaceutical Corp. (NASDAQ:RPTP) for $800 million. If the deal is approved, it should close in the fourth quarter of 2016.
DEPO stock was up 11% as of Noon Friday.