Depomed to Add Starboard Nominees

Depomed Inc. and activist shareholder Starboard Value LP have ended their battle over the drug company's board, which will add three Starboard nominees.

Starboard had attempted to replace Depomed's board as it criticized the company's corporate governance and capital allocation. The firm disclosed a stake in Depomed in April.

Starboard nominees James P. Fogarty, Robert G. Savage and James L. Tyree will join the current six directors, and a Nov. 15 special meeting scheduled at Starboard's request was canceled.

Depomed's board has amended its bylaws to move the window for shareholder proposals, while Starboard has agreed to certain standstill restrictions.

Depomed Chief Executive Jim Schoeneck said in a statement that "we are pleased to have reached this agreement with Starboard, which we believe is in the best interests of our shareholders." Starboard Chief Executive Jeffrey C. Smith said he is pleased with the agreement and expects "the board and management team will focus on delivering significant value for shareholders."

Mr. Fogarty is a former chief executive of catalog and e-commerce retailer Orchard Brands. Mr. Savage is a former Johnson & Johnson executive, while Mr. Tyree is a former Abbott Laboratories vice president.

On Sept. 30, Depomed said it received a favorable court decision on its patents for Nucynta painkiller products. Reuters reported in September that the company was working on a sale process, and that talks with potential buyers were expected to start following the decision.

In April 2015, Depomed bought the U.S. rights to Nucynta from Johnson & Johnson unit Janssen Pharmaceuticals Inc. for $1.05 billion.

Depomed shares were flat in after-hours trading at $23.83.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

October 17, 2016 18:25 ET (22:25 GMT)

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