Depomed, Inc. (DEPO) gains Wednesday, getting a milestone payment after the FDA approved Mallinckrodt plc’s New Drug Application (NDA) for its pain drug XARTEMIS XR (oxycodone hydrochloride and acetaminophen) Extended-Release Tablets (CII).

The drug, previously known as MNK-795, is intended for the management of acute pain severe enough to require opioid treatment and in patients for whom alternative treatment options (e.g., non-opioid analgesics) are ineffective, not tolerated or would otherwise be inadequate.

The drug includes Depomed’s advanced Acuform drug delivery technology and the NDA approval triggers a $10 million milestone payment to Depomed under Depomed’s license agreement with Mallinckrodt.

Depomed will recognize the entire milestone payment in Q1 2014 and will also receive high single digit royalties on net sales of XARTEMIS XR.

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