Navigation Links
Cephalon Exceeds Both Sales and Earnings Guidance for Second Quarter of 2008
Date:7/29/2008

TREANDA and AMRIX Off to Strong Starts

Cephalon Advances NUVIGIL Launch to 2009

Maintains 2008 Earnings Guidance Despite New Spending for Pre-Launch

NUVIGIL Activity and Increased AMRIX Investment

FRAZER, Pa., July 29 /PRNewswire-FirstCall/ -- Cephalon, Inc. (Nasdaq: CEPH) today reported second quarter 2008 sales of $485.0 million, compared to sales of $435.2 million for the second quarter 2007 and the company's sales guidance of $455 - $465 million. Net income for the quarter was $60.1 million and basic income per common share was $0.89. Excluding amortization expense and certain other items, adjusted net income was $84.5 million and basic adjusted income per common share for the quarter was $1.25, compared to $1.14 for the same period in 2007 and the company's earnings guidance range of $1.10 to $1.20.

Central nervous system (CNS) franchise sales were $251.2 million during the quarter, a new quarterly record and 9 percent increase compared to the same period last year. Pain franchise reported sales of $134.6 million, an increase of 3 percent versus 2007. Oncology franchise sales were $44.1 million, an increase of 86 percent versus 2007, due to robust sales of TREANDA(R) (bendamustine hydrochloride), which was launched in April and strong European sales of Myocet(R) (doxorubicin hydrochloride).

"With so many companies suffering from a myriad of economic problems, I am proud that Cephalon is reporting another solid quarter of sales and earnings growth," said Frank Baldino, Jr., Ph.D., Chairman and CEO. "In particular, it is extremely gratifying to know that patients are benefiting from our recent launches of TREANDA and AMRIX and that both of these unique products are off to great starts. An earlier launch of NUVIGIL and higher spending on AMRIX this year should provide a foundation for even stronger growth in the years ahead."

The company is updating its guidance for 2008. T 10%

GABITRIL 10% (33%) 2%

CNS 8% 21% 9%

ACTIQ (30%) 40% (19%)

Generic OTFC (6%) - (6%)

FENTORA 0% - 0%

AMRIX 100% - 100%

Pain (1%) 40% 3%

TREANDA 100% - 100%

Other (8%) 34% 26%

Oncology 295% 34% 86%

Other 4% 12% 10%

9% 22% 11%

Six Months Ended

June 30,

2008 2007

United United

States Europe Total States Europe Total

Sales:

PROVIGIL $417,411 $30,635 $448,046 $391,192 $24,267 $415,459

GABITRIL 25,438 4,332 29,770 26,862 5,387 32,249

CNS 442,849 34,967 477,816 418,054 29,654 447,708

ACTIQ 75,568 26,333 101,901 111,151 18,631 129,782

Generic OTFC 56,276 - 56,276 64,873 - 64,873

FENTORA 75,307 - 75,307 68,031 - 68,031

AMRIX 26,887 - 26,887 - - -

Pain 234,038 26,333 260,371 244,055 18,631 262,686

TREANDA 14,381 - 14,381 - - -

Other 9,568 47,642 57,210 8,743 38,240 46,983

Oncology 23,949 47,642 71,591 8,743 38,240 46,983

Other 26,644 82,517 109,161 25,833 75,863 101,696

$727,480 $191,459 $918,939 $696,685 $162,388 $859,073

%

Increase

(Decrease)

United

States Europe Total

Sales:

PROVIGIL 7% 26% 8%

GABITRIL (5%) (20%) (8%)

CNS 6% 18% 7%

ACTIQ (32%) 41% (21%)

Generic OTFC (13%) - (13%)

FENTORA 11% - 11%

AMRIX 100% - 100%

Pain (4%) 41% (1%)

TREANDA 100% - 100%

Other 9% 25% 22%

Oncology 174% 25% 52%

Other 3% 9% 7%

4% 18% 7%

CEPHALON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

June 30, December 31,

2008 2007

CURRENT ASSETS:

Cash and cash equivalents $673,371 $818,669

Investments - 7,596

Receivables, net 338,142 276,776

Inventory, net 114,479 99,098

Deferred tax assets, net 154,381 176,619

Other current assets 47,782 43,267

Total current assets 1,328,155 1,422,025

PROPERTY AND EQUIPMENT, net 512,449 500,396

GOODWILL 484,029 476,515

INTANGIBLE ASSETS, net 793,066 817,828

DEFERRED TAX ASSETS, net 176,148 141,752

OTHER ASSETS 163,042 147,753

$3,456,889 $3,506,269

CURRENT LIABILITIES:

Current portion of long-term debt $823,131 $1,237,169

Accounts payable 82,265 91,437

Accrued expenses 677,911 677,184

Total current liabilities 1,583,307 2,005,790

LONG-TERM DEBT 202,834 3,788

DEFERRED TAX LIABILITIES, net 74,577 56,540

OTHER LIABILITIES 137,225 138,084

Total liabilities 1,997,943 2,204,202

STOCKHOLDERS' EQUITY:

Common stock, $0.01 par value 708 700

Additional paid-in capital 2,007,582 1,934,965

Treasury stock, at cost (194,782) (158,173)

Accumulated deficit (525,209) (624,128)

Accumulated other comprehensive income 170,647 148,703

Total stockholders' equity 1,458,946 1,302,067

$3,456,889 $3,506,269

CEPHALON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended

June 30,

2008 2007

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 98,919 $ 70,877

Adjustments to reconcile net

income to net cash provided

by operating activities:

Deferred income tax expense (benefit) (2,603) 9,490

Shortfall tax benefits from

stock-based compensation - (198)

Depreciation and amortization 84,006 63,441

Stock-based compensation expense 21,894 24,627

Gain on sale of investment - (5,791)

Loss on disposals of property

and equipment 1,031 -

Other (418) 120

Changes in operating assets

and liabilities:

Receivables (56,210) (32,715)

Inventory (7,933) (26,009)

Other assets (24,027) (15,945)

Accounts payable, accrued

expenses and deferred revenues (10,427) 14,716

Other liabilities 16,418 48,205

Net cash provided by

operating activities 120,650 150,818

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment (42,898) (50,283)

Acquisition of intangible assets (25,575) -

Investment in third party (6,242) -

Proceeds from sale of investment

in third party - 12,291

Sales and (purchases) of investments, net 7,596 18,040

Net cash used for investing activities (67,119) (19,952)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercises of common

stock options 13,562 66,205

Windfall tax benefits from

stock-based compensation 480 8,681

Acquisition of treasury stock (24) (128)

Payments on and retirements of

long-term debt (215,129) (1,959)

Net cash provided by (used for)

financing activities (201,111) 72,799

EFFECT OF EXCHANGE RATE CHANGES

ON CASH AND CASH EQUIVALENTS 2,282 3,821

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS (145,298) 207,486

CASH AND CASH EQUIVALENTS,

BEGINNING OF PERIOD 818,669 496,512

CASH AND CASH EQUIVALENTS, END OF PERIOD $673,371 $703,998

CEPHALON, INC. AND SUBSIDIARIES

Reconciliation of Projected GAAP Basic Income per Common Share

to Basic Adjusted Income Per Common Share Guidance

(Unaudited)

Three Months Ended Twelve Months Ended

September 30, 2008 December 31, 2008

Projected GAAP basic income

per common share $0.99 - $1.09 $3.71 - $3.81

Amortization of current

intangibles $0.37 - $0.37 $1.53 - $1.53

Accelerated depreciation

adjustment $0.02 - $0.02 $0.10 - $0.10

Research and development

adjustments $- - $- $0.11 - $0.11

Selling, general and

administrative adjustments $- - $- $0.04 - $0.04

In-process research and

development adjustments $- - $- $0.15 - $0.15

Restructuring adjustments $0.02 - $0.02 $0.13 - $0.13

Interest expense adjustment $- - $- $0.11 - $0.11

Tax effect of pre-tax

adjustments at the

applicable tax rates $(0.15) - $(0.15) $(0.78) - $(0.78)

Basic adjusted income

per common share

guidance $1.25 $1.35 $5.10 $5.20

The company's guidance is being issued based on certain assumptions

including:

-- Adjusted effective tax rate of approximately 35.5 to 36.5 percent; and

-- Weighted average number of common shares outstanding of 68.0 and 67.9

million shares for the three months ended September 30, 2008 and for

the twelve months ended December 31, 2008, respectively.

otal sales guidance is increased by $30 million to $1.86 - $1.91 billion. This includes CNS franchise sales of $975 - $1,000 million, pain franchise sales of $500 - $525 million, oncology franchise sales of $155 - $180 million, and other product sales of $200 - $225 million. Full year SG&A and R&D guidance is $770 - $790 million and $340 - $360 million, respectively, and reflects a $30 million increase in SG&A guidance. Adjusted net income guidance for 2008 is $346 - $353 million and basic adjusted income per common share guidance is $5.10 - $5.20.

For the third quarter of 2008, Cephalon is introducing sales guidance of $480 - $490 million, adjusted net income guidance of $85 - $92 million and basic adjusted income per common share guidance of $1.25 - $1.35.

Basic adjusted income per common share guidance for both the third quarter 2008 and full-year 2008 is reconciled below and is subject to the assumptions set forth therein.

Cephalon's management will discuss the company's second quarter 2008 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +1-913-312-9303 and refer to conference code number 6640353. Investors can listen to the call live by logging on to the company's website at http://www.cephalon.com and clicking on "Investor Information," then "Webcast." The conference call will be archived and available to investors for one week after the call.

About Cephalon, Inc.

Founded in 1987, Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and commercialization of innovative products in four core therapeutic areas: central nervous system, pain, oncology and addiction. A member of the Fortune 1000, Cephalon currently employs approximately 3,000 people in the United States and Europe. U.S. sites include the company's headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota. The company's European headquarters are located in Maisons-Alfort, France.

The company's proprietary products in the United States include: AMRIX(R) (cyclobenzaprine hydrochloride extended-release capsules), TREANDA, FENTORA(R) (fentanyl buccal tablet) [C-II], PROVIGIL(R) (modafinil) Tablets [C-IV], TRISENOX(R) (arsenic trioxide) injection, VIVITROL(R) (naltrexone for extended-release injectable suspension), GABITRIL(R) (tiagabine hydrochloride), NUVIGIL(TM) (armodafinil) Tablets [C-IV] and ACTIQ(R) (oral transmucosal fentanyl citrate) [C-II]. The company also markets numerous products internationally. Full prescribing information on its U.S. products is available at http://www.cephalon.com or by calling 1-800-896-5855.

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Cephalon's current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs; development of potential pharmaceutical products; interpretation of clinical results; prospects for regulatory approval; manufacturing development and capabilities; market prospects for its products, including the growth and acceptance of Amrix in the market and the relative success of the recent launch of Treanda; sales, adjusted net income and basic adjusted income per common share guidance for the third quarter and full-year 2008 and SG&A and R&D guidance for the full-year 2008; and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or other words and terms of similar meaning. Cephalon's performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries as well as more specific risks and uncertainties facing Cephalon such as those set forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Cephalon does not intend to update publicly any forward-looking statement, except as required by law. The Private Securities Litigation Reform Act of 1995 permits this discussion.

This press release and/or the financial results attached to this press release include "Adjusted Net Income," "Basic Adjusted Income per Common Share," "Adjusted Net Income Guidance," "Basic Adjusted Income per Common Share Guidance," and "Diluted Adjusted Income Per Common Share," amounts that are considered "non-GAAP financial measures" under SEC rules. As required, we have provided reconciliations of these measures. Additional required information is located in the Form 8-K furnished to the SEC in connection with this press release.

CEPHALON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

REVENUES:

Sales $485,042 $435,194 $918,939 $859,073

Other revenues 7,673 12,018 16,995 25,173

492,715 447,212 935,934 884,246

COSTS AND EXPENSES:

Cost of sales 101,318 83,166 191,234 169,712

Research and development 80,409 96,593 161,844 180,551

Selling, general and

administrative 209,900 189,052 408,884 341,506

Settlement reserve - 56,000 - 56,000

Restructuring charges 1,565 - 5,476 -

In-process research and

development - - 10,000 -

393,192 424,811 777,438 747,769

INCOME FROM OPERATIONS 99,523 22,401 158,496 136,477

OTHER INCOME (EXPENSE):

Interest income 4,912 8,041 11,513 14,617

Interest expense (7,872) (5,017) (16,866) (9,612)

Gain on sale of investment - 5,791 - 5,791

Other income (expense), net (1,543) (1,502) 3,772 1,254

(4,503) 7,313 (1,581) 12,050

INCOME BEFORE INCOME TAXES 95,020 29,714 156,915 148,527

INCOME TAX EXPENSE 34,952 34,022 57,996 77,650

NET INCOME (LOSS) $ 60,068 $ (4,308) $ 98,919 $ 70,877

BASIC INCOME (LOSS)

PER COMMON SHARE $0.89 $(0.06) $1.46 $1.07

DILUTED INCOME (LOSS)

PER COMMON SHARE $0.80 $(0.06) $1.33 $0.90

WEIGHTED AVERAGE NUMBER OF

COMMON SHARES OUTSTANDING 67,777 66,445 67,721 66,127

WEIGHTED AVERAGE NUMBER

OF COMMON SHARES

OUTSTANDING-ASSUMING DILUTION 74,852 66,445 74,569 78,656

CEPHALON, INC. AND SUBSIDIARIES

Reconciliation of GAAP Net Income to Adjusted Net Income

(Unaudited)

Three Months Ended

June 30,

2008 2007

GAAP NET INCOME $ 60,068 $ (4,308)

Cost of sales adjustments 28,892(1) 21,016(1)

Research and development adjustments - 16,500(2)

Settlement reserve - 56,000(3)

Gain on sale of investment - (5,791)(4)

Interest expense adjustment 3,750(5) -

Restructuring adjustment 1,565(6) -

Income tax adjustment (9,814)(7) (7,784)(7)

24,393 79,941

ADJUSTED NET INCOME $ 84,461 $ 75,633

BASIC ADJUSTED INCOME PER COMMON SHARE $1.25 $1.14

DILUTED ADJUSTED INCOME PER COMMON SHARE $1.13 $0.93

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING 67,777 66,445

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING-ASSUMING DILUTION 74,852 81,209

Notes to Reconciliation of GAAP Net Income to Adjusted Net Income

(1) To exclude the on-going amortization of acquired intangible assets

($26.8 million in 2008; $21.0 million in 2007), and accelerated

depreciation related to restructuring ($2.1 million in 2008).

(2) To exclude charges related to payments for several research and

development collaborations.

(3) To exclude the reserve established for the minimum liability related

to the potential settlement of the investigations by the U.S.

Attorney's Office.

(4) To exclude the pre-tax gain related to the sale of certain

investments.

(5) To exclude an estimate of accrued interest related to the agreement

in principle reached with the U.S. Attorney's Office in Philadelphia.

(6) To exclude costs related to the CIMA Labs restructuring announced in

January 2008.

(7) To reflect the tax effect of pre-tax adjustments at the applicable

tax rates and certain other tax adjustments primarily related to

changes in valuation allowances and other changes in tax assets and

liabilities.

CEPHALON, INC. AND SUBSIDIARIES

Reconciliation of GAAP Net Income to Adjusted Net Income

(Unaudited)

Six Months Ended

June 30,

2008 2007

GAAP NET INCOME $ 98,919 $ 70,877

Cost of sales adjustments 56,780(1) 41,981(1)

Research and development adjustments 7,754(2) 26,500(2)

Selling, general and administrative

adjustments 2,955(3) -

Settlement reserve - 56,000(4)

Gain on sale of investment - (5,791)(5)

Interest expense adjustment 7,500(6) -

Restructuring adjustment 5,476(7) -

In-process research and development

adjustments 10,000(8) -

Income tax adjustment (29,329)(9) (18,766)(9)

61,136 99,924

ADJUSTED NET INCOME $160,055 $170,801

BASIC ADJUSTED INCOME PER COMMON SHARE $2.36 $2.58

DILUTED ADJUSTED INCOME PER COMMON SHARE $2.15 $2.17

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING 67,721 66,127

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING-ASSUMING DILUTION 74,569 78,656

Notes to Reconciliation of GAAP Net Income to Adjusted Net Income

(1) To exclude the on-going amortization of acquired intangible assets

($53.0 million in 2008; $42.0 million in 2007), and accelerated

depreciation related to restructuring ($3.8 million in 2008).

(2) To exclude charges related to payments for several research and

development collaborations, as well as other charges ($1.8 million)

related to employee severance costs in 2008.

(3) To exclude charges related to employee severance costs.

(4) To exclude the reserve established for the minimum liability related

to the potential settlement of the investigations by the U.S.

Attorney's Office.

(5) To exclude the pre-tax gain related to the sale of certain

investments.

(6) To exclude an estimate of accrued interest related to the agreement

in principle reached with U.S. Attorney's Office in Philadelphia.

(7) To exclude costs related to the CIMA Labs restructuring announced in

January 2008.

(8) To exclude charges related to the acquisition of licensed technology

in the oncology field.

(9) To reflect the tax effect of pre-tax adjustments at the applicable

tax rates and certain other tax adjustments primarily related to

changes in valuation allowances and other changes in tax assets and

liabilities.

CEPHALON, INC. AND SUBSIDIARIES

CONSOLIDATED SALES DETAIL

(In thousands)

(Unaudited)

Three Months Ended

June 30,

2008 2007

United United

States Europe Total States Europe Total

Sales:

PROVIGIL $218,942 $15,869 $234,811 $202,465 $11,705 $214,170

GABITRIL 14,307 2,039 16,346 12,978 3,051 16,029

CNS 233,249 17,908 251,157 215,443 14,756 230,199

ACTIQ 38,051 14,130 52,181 53,994 10,060 64,054

Generic OTFC 28,958 - 28,958 30,853 - 30,853

FENTORA 36,374 - 36,374 36,341 - 36,341

AMRIX 17,119 - 17,119 - - -

Pain 120,502 14,130 134,632 121,188 10,060 131,248

TREANDA 14,381 - 14,381 - - -

Other 4,380 25,372 29,752 4,752 18,950 23,702

Oncology 18,761 25,372 44,133 4,752 18,950 23,702

Other 13,117 42,003 55,120 12,652 37,393 50,045

$385,629 $99,413 $485,042 $354,035 $81,159 $435,194

%

Increase

(Decrease)

United

States Europe Total

Sales:

PROVIGIL 8% 36%
'/>"/>

SOURCE Cephalon, Inc.
Copyright©2008 PR Newswire.
All rights reserved

Related biology technology :

1. Cephalon Announces Positive Results from a Pivotal Study of FENTORA in Opioid-tolerant Patients with Non-cancer Breakthrough Pain
2. Cephalon, Inc. Announces Agreement to Acquire AMRIX, A Once-Daily Extended-Release Muscle Relaxant
3. Cephalon Reinforces Important Prescribing and Dosing Information for FENTORA
4. Cephalon Submits New Drug Application for TREANDA for the Treatment of Chronic Lymphocytic Leukemia
5. Cephalon Quarterly Conference Call Invitation
6. Cephalon Announces Strong Third Quarter Financial Results
7. Cephalon Submits Supplemental New Drug Application for FENTORA
8. Cephalon Submits New Drug Application for TREANDA for the Treatment of Patients with Relapsed Indolent Non-Hodgkins Lymphoma
9. Cephalon Presentation Slides for the 26th Annual JPMorgan Healthcare Conference Now Available
10. Cephalons EFFENTORA Receives Positive Opinion from European Regulatory Authorities for the Management of Breakthrough Cancer Pain
11. Cephalon Provides Update on Regulatory Status of the FENTORA Supplemental New Drug Application
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/10/2016)... Inc. (NYSE: BIOA ), a leader in renewable ... Ltd., its partner in the Sarnia ... CDN$25 million in the joint venture for 10% of ...  Mitsui will also play a stronger role in the ... , providing dedicated resources alongside BioAmber,s commercial team. ...
(Date:2/10/2016)... Feb.10, 2016 ASAE is introducing a hybrid ... Companies (AMC) the option of joining or renewing through ... determined by staff size, every employee in any size ... and reap all available member benefits.   ... organizational membership options will allow organizations of any size ...
(Date:2/10/2016)... Feb. 10, 2016  Matchbook, Inc., a company ... growing biotech companies, announced today the appointment of ... Advisor. Jim brings nearly 25 years of experience ... having spent nearly two decades in executive level ... Procurement at Genzyme and, most recently headed global ...
(Date:2/10/2016)... ... February 10, 2016 , ... SonaCare Medical, ... and support program, Sonalinkā„¢ remote monitoring. The inaugural launch of this new technology ... 5th, connecting Dr. Samuel Peretsman to a HIFU technical expert at SonaCare Medical ...
Breaking Biology Technology:
(Date:2/2/2016)... 2, 2016 This BCC Research report ... by reviewing the recent advances in high throughput ... the field forward. Includes forecast through 2019. ... challenges and opportunities that exist in the bioinformatic ... developers, as well as IT and bioinformatics service ...
(Date:2/2/2016)... Va. , Feb. 2, 2016   ... award from the U.S. Army Research Office and ... the range and sensitivity of the company,s ... Past Accounting Mission and, more generally, defense-related DNA ... DNA phenotyping capabilities (predicting appearance and ancestry from ...
(Date:2/1/2016)... -- Today, the first day of American Heart Month, the ... first of its kind workplace health solution that leverages ... first application of Watson to ... Welltok will create a new offering that combines AHA,s ... on Welltok,s health optimization platform. The effort is intended ...
Breaking Biology News(10 mins):