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.                     

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