The New Jeffrey Smith’s Starboard Value Lp Holding in Depomed Inc
Starboard Value Lp filed with the SEC SC 13D/A form for Depomed Inc. The form can be accessed here: 000092189516005889. As reported in Jeffrey Smith’s Starboard Value Lp’s form, the filler as of late owns 9.8% or 6,015,000 shares of the Health Care–company.
Depomed Inc stake is a new one for the for the hedge fund and it was filed because of activity on October 17, 2016. We feel this shows Jeffrey Smith’s Starboard Value Lp’s positive view for the stock. For a hedge fund managing $2.57 billion in assets and having 15+ active experts, we at Financialmagazine have no doubt the buy is a bullish signal.
The hedge fund is active investor in the Health Care sector. In the manager’s last 13-F, we saw 12% of Jeffrey Smith’s Starboard Value Lp’s US equities portfolio is in this sector.
Reasons Why Jeffrey Smith’s Starboard Value Lp Bought – Depomed Inc Stock
Purpose of Transaction
Item 4 is hereby amended to add the following:
On October 17, 2016, Starboard Value LP and certain of its affiliates (collectively, “Starboard”) entered into a settlement agreement with the Issuer (the “Agreement”) regarding the composition of the Issuer’s Board of Directors (the “Board”) and certain other matters. The following description of the Agreement is qualified in its entirety by reference to the Agreement, which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Pursuant to the terms of the Agreement, the Issuer agreed, among other things, to: (i) appoint James P. Fogarty, Robert G. Savage and James L. Tyree to the Board (each a “New Director” and, collectively, the “New Directors”); (ii) not increase the size of the Board beyond nine (9) members prior to the date of the 2017 Annual Meeting of Shareholders (the “2017 Annual Meeting”); (iii) ensure that during the Standstill Period (as defined below), each committee of the Board, including any new committee(s) that may be established, includes at least one New Director; (iv) amend its Amended and Restated Bylaws, such that with respect to the 2017 Annual Meeting, the period of time during which shareholders may submit a notice of nomination or notice of the proposal of other business at the 2017 Annual Meeting will begin on March 15, 2017 and end on April 15, 2017; and (v) use reasonable best efforts to hold the 2017 Annual Meeting no earlier than June 15, 2017 and no later than July 14, 2017.The Agreement also provides that during the Standstill Period, if any New Director (or any replacement director) is unable or unwilling to serve as a director, resigns or is removed as a director prior to the expiration of the Standstill Period, and at such time Starboard beneficially owns in the aggregate at least the lesser of (i) three percent (3.0%) of the Issuer’s then outstanding Shares and (ii) 1,845,233 Shares, then Starboard has the ability to recommend a substitute person, who meets certain independence and experience criteria.
Pursuant to the terms of the Agreement, Starboard agreed to irrevocably withdraw (i) its letter to the Issuer, dated September 16, 2016, requesting that the Issuer call a special meeting of shareholders, which was scheduled to be held on November 15, 2016 (the “Special Meeting”), such that no such Special Meeting shall be called or held and (ii) any related materials or notices submitted to the Issuer in connection therewith.Starboard also agreed to
cease all efforts in furtherance of the Special Meeting and any related solicitation in connection with the Special Meeting.In addition, Starboard agreed to certain customary standstill provisions, effective as of the date of the Agreement through 12:01 a.m., Eastern time, on March 15, 2017 (the “Standstill Period”). The standstill provisions generally prohibit Starboard from taking specified actions with respect to the Issuer and its securities, including, among others: (i) soliciting or participating in the solicitation of proxies; (ii) joining any “group” or becoming party to any voting arrangement or agreement; (iii) seeking or encouraging others to submit nominations for election or removal of directors; (iv) making shareholder proposals or offers with respect to mergers, acquisitions and other business combinations; or (v) seeking board representation other than as provided in the Agreement.
CUSIP NO. 249908104
Depomed Inc Institutional Sentiment
Latest Security and Exchange filings show 197 investors own Depomed Inc. The institutional ownership in Q3 2015 is high, at 110.28% of the outstanding shares. This is increased by 5874387 the total institutional shares. 67677624 were the shares owned by these institutional investors. In total 46 funds opened new Depomed Inc stakes, 56 increased stakes. There were 47 that closed positions and 80 reduced them.
3 managers had the stock in their top Ten. Notable investors are: Deltec Asset Management Llc, Penn Capital Management Co Inc, Healthcare Value Capital Llc, Consonance Capital Management Lp, Starboard Value Lp, Oxford Asset Management..
Krensavage Asset Management Llc is an institutional investor bullish on Depomed Inc, owning 375387 shares as of Q3 2015 for 2.56% of its portfolio. Jw Asset Management Llc owns 315236 shares or 2.15% of its portfolio. NY Scoggin Llc have 0.81% of their stock portfolio for 1415000 shares. Further, Perkins Capital Management Inc reported stake worth 2.07% of its US stock portfolio. The NY Deltec Asset Management Llc owns 1788682 shares. Depomed Inc is 8.35% of the manager’s US portfolio.
Depomed, Inc. is a specialty pharmaceutical company focused on pain and other central nervous system (CNS) conditions. The Company’s products include NUCYNTA ER (tapentadol extended release tablets), which is a product for the management of pain severe enough to require daily, around-the-clock, long term opioid treatment, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and for which alternate treatment options are inadequate; NUCYNTA (tapentadol), which is an immediate release version of tapentadol for the management of moderate to severe acute pain in adults; Gralise, which is a once-daily product for the management of postherpetic neuralgia; CAMBIA, which is a non-steroidal anti-inflammatory drug (NSAID) for the acute treatment of migraine attacks; Zipsor, which is a NSAID for the treatment of mild to moderate acute pain, and Lazanda nasal spray, which is used for the management of break through pain in cancer patients.
SEC Form 13D is filed within 10 days, by anyone who acquires beneficial ownership of 5%+ of any public firm. Activist investors and practices such as: company breakups, hostile takeovers, and change of control events, are permitted for this form filers. A filer must promptly update its 13D filing in case of acquisition or disposition of 1% or more of the securities that are the subject of the filing.
Jeffrey Smith’s Starboard Value Lp website.
Insitutional Activity: The institutional sentiment increased to 1.24 in 2016 Q2. Its up 0.26, from 0.98 in 2016Q1. The ratio improved, as 31 funds sold all Depomed Inc shares owned while 57 reduced positions. 42 funds bought stakes while 67 increased positions. They now own 61.91 million shares or 2.39% less from 63.42 million shares in 2016Q1.
Invesco Limited holds 0.02% or 2.47 million shares in its portfolio. Art Advisors Limited Liability Company owns 24,538 shares or 0.02% of their US portfolio. Sei Invests Com reported 30,863 shares or 0% of all its holdings. Wfg Advisors Lp holds 0% of its portfolio in Depomed Inc (NASDAQ:DEPO) for 280 shares. Perceptive Advisors accumulated 600,000 shares or 0.81% of the stock. Da Davidson Communication has 3,281 shares for 0% of their US portfolio. Blackrock Fund Advisors, a California-based fund reported 5.06 million shares. Pnc Fincl Ser Grp has invested 0% of its portfolio in Depomed Inc (NASDAQ:DEPO). Amer Century Companies reported 70,780 shares or 0% of all its holdings. Morgan Stanley holds 0% or 163,736 shares in its portfolio. Tci Wealth Advisors Inc last reported 108 shares in the company. Scout has invested 0.01% of its portfolio in Depomed Inc (NASDAQ:DEPO). Principal Gp Inc owns 430,178 shares or 0.01% of their US portfolio. Arizona State Retirement System owns 31,721 shares or 0.01% of their US portfolio. Capstone Asset Mngmt last reported 31,490 shares in the company.
Insider Transactions: Since May 9, 2016, the stock had 0 insider purchases, and 6 sales for $1.59 million net activity. Another trade for 5,000 shares valued at $107,000 was sold by Moretti August J. Vargas Thadd M had sold 15,000 shares worth $300,000 on Monday, May 23.
Analysts await Depomed Inc (NASDAQ:DEPO) to report earnings on November, 14. They expect $-0.01 EPS, down 103.70% or $0.28 from last year’s $0.27 per share. After $-0.17 actual EPS reported by Depomed Inc for the previous quarter, Wall Street now forecasts -94.12% EPS growth.
The stock decreased 2.28% or $0.55 during the last trading session, hitting $23.55. About 670,739 shares traded hands. Depomed Inc (NASDAQ:DEPO) has risen 69.96% since March 16, 2016 and is uptrending. It has outperformed by 64.41% the S&P500.
Depomed, Inc. is a specialty pharmaceutical firm focused on pain and other central nervous system conditions. The company has a market cap of $1.46 billion.
Depomed Inc (NASDAQ:DEPO) Ratings Coverage
Out of 14 analysts covering Depomed Inc (NASDAQ:DEPO), 7 rate it a “Buy”, 0 “Sell”, while 7 “Hold”. This means 50% are positive. $33 is the highest target while $16 is the lowest. The $24.50 average target is 4.03% above today’s ($23.55) stock price. Depomed Inc has been the topic of 26 analyst reports since July 30, 2015 according to StockzIntelligence Inc. The rating was downgraded by Janney Capital to “Neutral” on Friday, July 31. Piper Jaffray initiated the stock with “Overweight” rating in Monday, February 8 report. The rating was maintained by Mizuho with “Buy” on Friday, May 27. The stock of Depomed Inc (NASDAQ:DEPO) has “Hold” rating given on Friday, October 16 by TheStreet. The company was maintained on Wednesday, November 11 by TH Capital. RBC Capital Markets maintained Depomed Inc (NASDAQ:DEPO) on Wednesday, October 21 with “Sector Perform” rating. As per Thursday, March 24, the company rating was initiated by Northland Capital. WallachBeth Capital upgraded Depomed Inc (NASDAQ:DEPO) on Wednesday, November 11 to “Buy” rating. The firm has “Buy” rating by Mizuho given on Monday, May 9. Morgan Stanley reinitiated it with “Equal-Weight” rating and $21.0 target price in Thursday, December 3 report.
Another recent and important Depomed Inc (NASDAQ:DEPO) news was published by Wsj.com which published an article titled: “Depomed Gets Favorable Nucynta Patent Decision” on September 30, 2016.
According to Zacks Investment Research, “Depomed, Inc. is a specialty pharmaceutical company utilizing its innovative AcuForm drug delivery technology to develop novel oral products and improved, extended release formulations of existing oral drugs. AcuForm-based products are designed to provide once- daily administration and reduced side effects, improving patient convenience, compliance and pharmacokinetic profiles. ProQuin XR extended-release tablets have been approved by the FDA for the once-daily treatment of uncomplicated urinary tract infections and are currently being marketed in the United States. In addition, once-daily Glumetza has been approved for use in adults with type two diabetes and is currently being marketed in the United States and Canada. The company is currently evaluating Gabapentin GR for the treatment of two pain indications, postherpetic neuralgia and diabetic peripheral neuropathy, and menopausal hot flashes.”
DEPO Company Profile
Depomed, Inc., incorporated on August 7, 1995, is a specialty pharmaceutical firm focused on pain and other central nervous system (CNS) conditions. The Company’s products include The NUCYNTA franchise of pain products, including NUCYNTA ER (tapentadol extended release tablets) and NUCYNTA (tapentadol); Gralise (gabapentin); CAMBIA (diclofenac potassium for oral solution); Lazanda (fentanyl) nasal spray, and Zipsor (diclofenac potassium).
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