Depomed, a pharmaceutical company based in Newark, Calif., will cut 40 percent of its workforce and move its headquarters after signing away its sales rights to its best-selling line of pain medications.
Under the commercialization agreement, Massachusetts-based Collegium Pharmaceutical will market and sell Nucynta, Depomed's line of painkillers. In exchange, Depomed will receive an annual royalty payment from Collegium. For the first four years, Depomed will receive a minimum royalty of $135 million annually.
As a result of the agreement, Depomed will eliminate its pain medication sales team and all brand spending on Nucynta — a move estimated to save the company $70 million dollars per year. The layoffs will reduce the Depomed's workforce to approximately 70 people.
Depomed will relocate its headquarters to a Midwest or East Coast location in spring of 2018.