After spending more than six months at a nothing better than a mediocre three-star rank, DepoMed (Nasdaq: DEPO) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to climb up to four stars recently. A total of 165 members have given their opinion on the small-cap pharmaceutical developer, with many of them offering analysis and commentary explaining the recent optimism.

With two drugs already on the market and a growing pipeline, CAPS members have grown more bullish on DepoMed's stock along with some of its recent developments. The company reported a 56% jump in first-quarter revenue, with help from strong sales of its diabetes drug Glumetza, which is marketed with promotional partner Santarus (Nasdaq: SNTS). Though the two companies may see a revenue hit in the second and third quarters after recalling some bottles of the drug, some other developments have helped assuage investors and represent further long-term potential for the company.  

The company's shares have been fighting their way back after a taking hit earlier this year related to the FDA's rejection of XenoPort's and GlaxoSmithKline's (NYSE: GSK) restless leg syndrome drug Horizant, due to concerns over cancer risks of gabapentin. DepoMed's postherpetic neuralgia treatment candidate is also a gabapentin drug, but investors have gained some confidence in its chances of approval after its marketing application was recently accepted by the FDA, triggering a $10 million milestone payment from partner Abbott Labs (NYSE: ABT). DepoMed believes it will have benefits over competing drug LYRICA by Pfizer (NYSE: PFE), which it says has been struggling with falling prescriptions -- not to mention FDA rejections for expanded use -- and sees peak sales potential of at least $1 billion if it achieves just a 15% share of the market.  

DepoMed has also established other licensing partnerships like its deal with Merck (NYSE: MRK) that landed it a $10 million upfront payment last year. It pulled in a $500,000 licensing milestone payment from Covidien (NYSE: COV) in the first quarter, and with exclusive rights to two products that Covidien is developing, may see some success in generating high returns the opioid market.                     

Do you think DepoMed deserves its improved status? Add your thoughts in the comments box below on this page, or head over to CAPS to rate the company and check out all the information and opinions the community offers, absolutely free.

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Fool contributor Dave Mock recently upgraded his bathtub toy set with a brand new rubber ducky. He owns shares of Pfizer. Covidien and Pfizer are Inside Value choices. The Fool owns shares of GlaxoSmithKline. The Fool's disclosure policy lives large with a big SUV and outsized ego to match.