A court ruled in Depomed Inc's favor in a patent dispute over its opioid drug, Nucynta, a decision that could help pave the way for the drug maker to explore a sale.
Sources told Reuters this month that Depomed was preparing to explore a sale and talks with potential buyers are expected to start shortly after a ruling on Nucynta, the company's biggest drug.
Activist investor Starboard Value LP in April called on Depomed to explore a sale after disclosing a stake of close to 10 percent.
The hedge fund, which wants to oust Depomed's board, has set Nov. 15 as the date for a special meeting of the company's shareholders.
The ruling prevents Actavis (now Allergan Plc), Alkem Laboratories Ltd and Roxane Laboratories Inc from selling generic versions of Nucynta until 2025, the company said.
Sales of Nucynta, which Depomed acquired in early 2015 from Janssen Pharmaceuticals Inc for just over $1 billion, have lagged the company's expectations affected by concerns of health insurers about addictive potential of opiate-based drugs.
The ruling provides market exclusivity to Nucynta ER, Nucynta and Nucynta oral solution, an unmarketed form of Nucynta, the company said on Friday.
Shares of Newark, California-based Depomed were up 3 percent in after-market trading. Up to Friday's close of $24.97, the stock had risen nearly 60 percent since Starboard reported its stake.