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Cephalon Reported Record Sales, Adjusted Net Income and Cash From Operations in 2010
Date:2/10/2011

FRAZER, Pa., Feb. 10, 2011 /PRNewswire/ -- Cephalon, Inc. (Nasdaq: CEPH) today reported 2010 net sales of $2.761 billion, a 28 percent increase compared to net sales of $2.152 billion for 2009.  Basic income per common share for the year was $5.66.  Excluding amortization expense and certain other items, adjusted net income for full year 2010 was $657 million, a 40 percent increase over the previous year.  This exceeded the company's adjusted net income guidance range of $617 to $632 million for 2010. Basic adjusted income per common share for the year was $8.74 in 2010, a 35 percent increase over the $6.48 in 2009.  

Central nervous system (CNS) franchise net sales were $1.394 billion during the year, an 18 percent increase compared to 2009.  Pain franchise reported net sales of $526.3 million, a 6 percent increase versus last year.  Oncology franchise net sales were $513.6 million, a 53 percent increase over 2009 due to strong net sales of TREANDA® (bendamustine hydrochloride) of $393.5 million.  Sales of other products were $326.7 million, a 130 percent increase primarily due to the sales of the portfolio of products obtained through the acquisition of Mepha in April 2010.

During the fourth quarter 2010 Cephalon recorded net cash provided by operating activities of $131 million resulting in 2010 cash flow from operations of $782 million.

"As pleased as I am with our strong financial performance, I am as enthusiastic about the company we are building for tomorrow," said Kevin Buchi, Chief Executive Officer. "We now have one of the premier late stage pipelines in the industry and a geographically diversified business."

The company is updating its guidance for 2011.  Total sales guidance for 2011 is increased to $3.015 -$3.095 billion as a result of an increase in CNS franchise sales to $1.45 -$1.49 billion.  Pain franchise sales of $540 - $570 million, oncology franchise sales of $570 - $600 million, and other product sales of $420 - $450 million remain unchanged. Full year R&D guidance is increased to $520 - $540 million and SG&A guidance remains unchanged at $970 million - $1.00 billion.  Adjusted net income guidance is increased to $665-$688 million.  Basic adjusted income per common share guidance is increased to $8.70 - $9.00, assuming 76.4 million basic shares outstanding.

Cephalon is introducing first quarter 2011 sales guidance of $725 - $755 million, adjusted net income guidance of $144 - $159 million and basic adjusted income per common share guidance of $1.90 - $2.10 assuming 75.8 million basic shares outstanding.  

Basic adjusted income per common share for both the first quarter 2011 and full-year 2011 is reconciled below and is subject to the assumptions set forth therein.  References in this press release to basic income per common share, basic adjusted income per common share, basic adjusted income per common share guidance, adjusted net income, adjusted net income guidance, adjusted net income per common share, adjusted net income per common share guidance refers to those metrics on an "attributable to Cephalon" basis and does not include any income or losses attributable to noncontrolling interests.

Cephalon's management will discuss the company's full year 2010 performance in a conference call with investors beginning at 5:00 p.m. U.S. EST today.  To participate in the conference call, dial +1-913-312-0724 and refer to conference code number 3115464. Investors can listen to the call live by logging on to the company's website at www.cephalon.com and clicking on "Investors" then "Webcast."  The conference call will be archived and available to investors for one week after the call.

About Cephalon, Inc.Cephalon is a global biopharmaceutical company dedicated to discovering, developing and bringing to market medications to improve the quality of life of individuals around the world.  Since its inception in 1987, Cephalon has brought first-in-class and best-in-class medicines to patients in several therapeutic areas.  Cephalon has the distinction of being one of the world's fastest-growing biopharmaceutical companies, now among the Fortune 1000 and a member of the S&P 500 Index, employing approximately 4,000 people worldwide.  The company sells numerous branded and generic products around the world. In total, Cephalon sells more than 150 products in approximately 100 countries.
More information on Cephalon and its products is available at http://www.cephalon.com

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; sales, adjusted net income and basic adjusted income per common share guidance for first-quarter 2011 and full-year 2011 and SG&A and R&D guidance for the first-quarter 2011 and full-year 2011; 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.Contacts:Media:

Investors:Natalie deVane

Robert (Chip) Merritt610-727-6536

610-738-6376ndevane@cephalon.com

cmerritt@cephalon.comJoseph Marczely610-883-5894jmarczely@cephalon.comCEPHALON, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)Three Months EndedYear EndedDecember 31,December 31,2010200920102009REVENUES:Net sales

$ 764,759$ 562,938$ 2,760,952$ 2,151,548Other revenues

5,81012,17750,10540,760770,569575,1152,811,0572,192,308COSTS AND EXPENSES:Cost of sales

150,142105,204577,863398,837Research and development

122,39191,165439,995395,431Selling, general and administrative

268,504203,738958,404822,052Change in fair value of contingent consideration

205-6,519-Restructuring charges

3,0819,88110,71913,825Impairment charge

-182,080-182,080Acquired in-process research and development

100,000-100,00046,118644,323592,0682,093,5001,858,343INCOME (LOSS) FROM OPERATIONS

126,246(16,953)717,557333,965OTHER INCOME (EXPENSE):Interest income

1,1881,8085,3265,263Interest expense

(20,362)(27,123)(99,257)(90,336)Change in fair value of investments

7,931-7,931-Other income (expense), net

6,691(1,903)(12,758)40,515(4,552)(27,218)(98,758)(44,558)INCOME (LOSS) BEFORE INCOME TAXES

121,694(44,171)618,799289,407INCOME TAX EXPENSE (BENEFIT)

28,289(43,979)201,11678,680NET INCOME  (LOSS)

93,405(192)417,683210,727NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

21196,7508,062131,900NET INCOME ATTRIBUTABLE TO CEPHALON, INC.

$   93,616$   96,558$
425,745$
342,627BASIC INCOME PER COMMON SHARE ATTRIBUTABLE TO CEPHALON, INC.

$
.24$
.29$
5.66$
4.74DILUTED INCOME PER COMMON SHARE ATTRIBUTABLE TO CEPHALON, INC.

$
.16$
.23$
5.27$
4.41WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING ATTRIBUTABLE TO CEPHALON, INC.

75,35574,72075,18572,342WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING-ASSUMING DILUTIONATTRIBUTABLE TO CEPHALON, INC.

80,96478,50880,71277,733CEPHALON, INC. AND SUBSIDIARIESReconciliation of GAAP Net Income to Adjusted Net Income Attributable to Cephalon, Inc.(Unaudited)Three Months EndedDecember 31,20102009GAAP NET INCOME ATTRIBUTABLE TO CEPHALON, INC.

$   93,616 $   96,558 Cost of sales adjustments

30,488

(1)

34,875

(1)Research and development adjustments

2,013

(2)

343

(2)Selling, general and administrative adjustments

8,245

(3)

232

(3)Change in fair value of contingent consideration adjustment

205

(4)

-Restructuring charges

2,067

(5)

9,881

(5)Impairment charges

-7,080

(6)Acquired in-process research and development adjustments

100,000

(7)

-Interest expense adjustment

15,413

(8)

17,307

(8)Change in fair value of investments adjustment

(7,931)

(9)

-Other income adjustment

(8,522)

(10)

-Income tax adjustment

(58,491)

(11)

(35,787)

(11)*Noncontrolling Interest adjustments:Impairment charges

-175,000Other revenue

(244)(11)Research and development

267,140Selling, general and administrative5311,411Interest income

(21)(5)Interest expense  

-97Restructuring charges

1,014-Income taxes

(1,004)(12,647)Impairment charge tax benefit

-(74,235)Less amount attributable to noncontrolling interest

(302)(96,750)83,48733,931ADJUSTED NET INCOME ATTRIBUTABLE TO CEPHALON, INC.

$ 177,103$ 130,489BASIC ADJUSTED INCOME PER COMMON SHARE

$
2.35$
.75DILUTED ADJUSTED INCOME PER COMMON SHARE

$
2.19$
.66WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING

75,35574,720WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-ASSUMING DILUTION

80,96478,508* Amounts recorded by our Variable Interest Entities that have been excluded from net income attributable to Cephalon, Inc.Notes to Reconciliation of GAAP Net Income to Adjusted Net Income(1) To exclude the on-going amortization of acquired intangible assets ($30.3M in 2010; $26.9M in 2009), accelerated depreciation related to restructuring ($0.2M in 2010; $5.0M in 2009) and the reserve for modafinil purchase commitments in excess of requirements ($3.0M in 2009).

(2) In 2010, to exclude costs associated with our collaboration with Ambit Biosciences Corporation.  In 2009, to exclude accelerated depreciation related to restructuring.

(3) In 2010, to exclude charges related to the acquisition of Mepha GmbH, Mesoblast Limited and ChemGenex Pharmaceuticals Limited ($5.0M, $3.0M and $0.2M, respectively). In 2009, to exclude charges related to the acquisition of Arana Therapeutics Limited ($0.2M).  

(4) In 2010, to exclude the change in fair value of the Ception Therapeutics, Inc. (-$0.3M) and BioAssets Development Corporation ($0.5M) contingent consideration.

(5) To exclude costs related to restructurings.

(6) In 2009, to exclude the impairment of  our investment in SymBio Pharmaceuticals Limited.

(7) In 2010, to exclude the acquisition of worldwide license rights to Mesoblast Limited's proprietary technology platform.

(8) To exclude imputed interest expense associated with convertible debt.

(9) In 2010, to exclude the change in fair value of our investment in Mesoblast Limited ($12.0M), offset by the change in fair value of our investment in ChemGenex Pharmaceuticals Limited  ($4.1M).

(10) In 2010, to exclude a gain on foreign exchange of Australian Dollar acquisition funds ($2.0M) and proceeds received in a settlement ($6.5M).  

(11) To reflect the tax effect of pre-tax adjustments at 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 SUBSIDIARIESReconciliation of GAAP Net Income to Adjusted Net Income Attributable to Cephalon, Inc.(Unaudited)Year EndedDecember 31,20102009GAAP NET INCOME ATTRIBUTABLE TO CEPHALON, INC.

$ 425,745 $ 342,627 Cost of sales adjustments

154,713

(1)

113,021

(1)Research and development adjustments

4,715

(2)

4,747

(2)Selling, general and administrative adjustments

17,815

(3)

14,611

(3)Change in fair value of contingent consideration adjustment

6,519

(4)

-Restructuring charges

9,704

(5)

13,825

(5)Impairment charge

-7,080

(6)Acquired in-process research and development adjustments

100,000

(7)

46,118

(7)Interest expense adjustment

65,485

(8)

57,766

(8)Change in fair value of investments adjustment

(7,931)

(9)

-Other (income) expense adjustment

3,045

(10)

(40,011)

(10)Arana noncontrolling interest adjustments

-(819)

(11)Income tax adjustment

(122,784)

(12)

(89,979)

(12)*Noncontrolling Interest adjustments:Impairment charge

-175,000Other revenue

(276)19Research and development

6,40332,659Selling, general and administrative3,9948,784Restructuring charges

1,014-Interest income

(29)(187)Interest expense

1541,396Other expense

16633Impairment charge tax benefit

-(74,235)Income taxes

(4,852)(12,600)Less amount attributable to noncontrolling interest

(6,574)(130,869)231,281126,359ADJUSTED NET INCOME ATTRIBUTABLE TO CEPHALON, INC.

$ 657,026$ 468,986BASIC ADJUSTED INCOME PER COMMON SHARE

$
8.74$
.48DILUTED ADJUSTED INCOME PER COMMON SHARE

$
8.14$
.03WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING

75,18572,342WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING-ASSUMING DILUTION

80,71277,733* Amounts recorded by our Variable Interest Entities that have been excluded from net income attributable to Cephalon, Inc.Notes to Reconciliation of GAAP Net Income to Adjusted Net Income(1) To exclude the on-going amortization of acquired intangible assets ($119.7M in 2010; $97.5M in 2009), accelerated depreciation related to restructuring ($15.1M in 2010; $19.0M in 2009), amortization of inventory revaluation related to Mepha GmbH ($10.5M in 2010) and the reserve for modafinil purchase commitments in excess of estimated requirements ($9.4M in 2010; $6.0M in 2009), offset by the gain recognized in connection with an agreement to reduce our excess modafinil purchase commitments ($9.5M in 2009).

(2) To exclude accelerated depreciation related to restructuring ($0.7M in 2010; $1.3M in 2009), the impairment of an investment ($2.0M in 2010),  charges related to our collaboration with Ambit BioSciences Corporation ($2.0M in 2010), charges related to payments for several research and development collaborations ($2.0M in 2009) and charges related to our transaction with Arana Therapeutics Limited ($1.5M in 2009).

(3) In 2010, to exclude charges charges related to the acquisition of Mepha GmbH, Ception Therapeutics, Inc. noncontrolling interest, Mesoblast Limited and ChemGenex Pharmaceuticals Limited ($15.3M, $1.4M, $3.0M and $0.2M, respectively), offset by proceeds related to the settlement of litigation in Europe ($2.1M).  In 2009, to exclude charges related to the acquisition of Arana Therapeutics Limited ($8.1M) and charges related to our settlement with Takeda Pharmaceutical Company Limited ($6.5M) to resolve our remaining contractual arrangements.  

(4) In 2010, to exclude the change in fair value of the Ception Therapeutics, Inc. ($6.0M) and BioAssets Development Company  ($0.5M) contingent consideration.

(5) To exclude costs related to restructurings.

(6) In 2009, to exclude the loss on sale of equipment related to the VIVITROL termination.

(7) In 2010, to exclude the acquisition of worldwide license rights to Mesoblast Limited's proprietary technology platform.  In 2009, to exclude charges related to the deconsolidation of Acusphere, Inc. ($9.3M), the acquisition of worldwide license rights related to LUPUZOR from ImmuPharma AG ($30.0M), license rights for bendamustine hydrochloride in China and Hong Kong ($0.8M) and license rights to certain of XOMA Ltd.’s proprietary antibody library materials ($6.0M).

(8) To exclude imputed interest expense associated with convertible debt.

(9) In 2010, to exclude the change in fair value of our investment in Mesoblast Limited ($12.0M), offset by the change in fair value of our investment in ChemGenex Pharmaceuticals Limited ($4.1M).

(10) In 2010, to exclude the following:

  • $2.0M gain on foreign exchange of Australian Dollar acquisition funds;
  • $6.5M proceeds received in a settlement
  • $9.1M net loss on foreign exchange derivative instruments related to the acquisition of Mepha GmbH; and
  • $2.5M loss on foreign exchange of Swiss Franc acquisition funds.

  • In 2009, to exclude the following gains and losses related to the acquisition of Arana Therapeutics Limited:

  • $6.6M gain on pre-bid Arana Therapeutics Limited holding;
  • $2.8M loss on contingent consideration (90% ownership incentive payment);
  • $10.0M gain on excess of net assets over consideration;
  • $19.0M gain on foreign exchange derivative instruments;  
  • $5.6M gain on foreign exchange of Australian Dollar acquisition funds; and
  • $1.6M gain on dividend income related to our initial purchase of Arana Therapeutics Limited shares.

  • (11) In 2009, to exclude the portion of non-cash charges related to our acquisition of Arana Therapeutics Limited that are reflected in (10) above but do not affect net income because they are attributed to noncontrolling interests.

    (12) To reflect the tax effect of pre-tax adjustments at 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 SUBSIDIARIESCONSOLIDATED SALES DETAIL(In thousands)(Unaudited)Three Months Ended%December 31Increase20102009(Decrease)United StatesEuropeTotalUnited StatesEuropeTotalUnited StatesEuropeTotalSales:CNSProprietary CNSPROVIGIL$
    278,796$   17,387$
    296,183$
    234,757$   16,507$
    251,26419%5%18%NUVIGIL58,863-58,86335,614-35,61465-65GABITRIL10,7341,24911,98314,0421,51515,557(24)(18)(23)Other Proprietary CNS-2,6982,698-3,6473,647-(26)(26)Generic CNS-8,7638,763-2,7072,707-224224CNS 348,39330,097378,490284,41324,376308,789222323PainProprietary PainFENTORA44,8767,09851,97436,8771,67638,5532232435AMRIX28,768-28,76830,628-30,628(6)-(6)Other Proprietary Pain-7272-5050-4444Generic PainACTIQ18,34916,53834,88718,72618,94937,675(2)(13)(7)Generic OTFC8,529-8,52916,198-16,198(47)-(47)Other Generic Pain-20,40620,406-2,6962,696-657657Pain100,52244,114144,636102,42923,371125,800(2)8915OncologyProprietary OncologyTREANDA108,573-108,57361,563-61,56376-76Other Proprietary Oncology4,93518,96623,9014,75221,62726,3794(12)(9)Generic Oncology-7,5887,588-6,2556,255-2121Oncology113,50826,554140,06266,31527,88294,19771(5)49OtherOther Proprietary3,8901,7015,5914,268-4,268(9)10031Other Generic2,54093,44095,9802,54627,33829,884-242221Other6,43095,141101,5716,81427,33834,152(6)248197$
    568,853$ 195,906$
    764,759$
    459,971$ 102,967$
    562,93824%90%36%Year Ended%December 31,Increase20102009(Decrease)United StatesEuropeTotalUnited StatesEuropeTotalUnited StatesEuropeTotalSales:CNSProprietary CNSPROVIGIL$ 1,059,698$   64,796$ 1,124,494$
    961,070$   63,618$ 1,024,68810%2%10%NUVIGIL186,190-186,19073,391-73,391154-154GABITRIL39,7284,76044,48851,1005,38656,486(22)(12)(21)Other Proprietary CNS-10,93610,936-13,29213,292-(18)(18)Generic CNS-28,25728,257-10,78510,785-162162CNS 1,285,616108,7491,394,3651,085,56193,0811,178,642181718PainProprietary PainFENTORA159,58522,037181,622136,5634,114140,6771743629AMRIX109,235-109,235114,435-114,435(5)-(5)Other Proprietary Pain-271271-267267-11Generic PainACTIQ63,93066,951130,88175,41871,527146,945(15)(6)(11)Generic OTFC41,138-41,13883,032-83,032(50)-(50)Other Generic Pain-63,14463,144-8,9548,954-605605Pain373,888152,403526,291409,44884,862494,310(9)806OncologyProprietary OncologyTREANDA393,473-393,473222,112-222,11277-77Other Proprietary Oncology20,86676,25697,12218,28175,36093,6411414Generic Oncology-22,99822,998-20,94020,940-1010Oncology414,33999,254513,593240,39396,300336,69372353OtherOther Proprietary15,1125,80920,92117,545-17,545(14)10019Other Generic13,220292,562305,78215,436108,922124,358(14)169146Other28,332298,371326,70332,981108,922141,903(14)174130$ 2,102,175$ 658,777$ 2,760,952$ 1,768,383$ 383,165$ 2,151,54819%72%28% Europe- Primarily Europe, Middle East and Africa Proprietary products are products which are sold under patent coverage.   Generic products are products sold without patent coverage in the primary sales territory. Patent coverage may exist in other territories.   CEPHALON, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share data)(Unaudited) December 31, 20102009CURRENT ASSETS:   Cash and cash equivalents

    $ 1,160,239$ 1,647,635   Receivables, net

    431,333376,076   Inventory, net

    291,360240,576   Deferred tax assets, net

    213,798243,246   Other current assets

    54,84558,423Total current assets

    2,151,5752,565,956   INVESTMENTS ($155,808 at fair value in 2010)

    168,49412,427   PROPERTY AND EQUIPMENT, net

    502,856451,879   GOODWILL

    822,071590,284   INTANGIBLE ASSETS, net

    1,212,387981,857   DEBT ISSUANCE COSTS

    14,19618,862   OTHER ASSETS

    20,25436,830$ 4,891,833$ 4,658,095CURRENT LIABILITIES:   Current portion of long-term debt, net

    $
    51,997$
    818,925   Accounts payable

    104,47788,829   Accrued expenses

    460,141430,209Total current liabilities

    1,216,6151,337,963   LONG-TERM DEBT

    391,416363,696   DEFERRED TAX LIABILITIES, net

    172,589159,328   OTHER LIABILITIES

    273,438111,728Total liabilities

    2,054,0581,972,715REDEEMABLE EQUITY

    170,183207,307EQUITY:Cephalon Stockholders' Equity   Common stock, $0.01 par value

    791780   Additional paid-in capital

    2,428,4502,534,070   Treasury stock, at cost

    (225,870)(208,427)   Accumulated earnings (deficit)

    247,086(178,659)   Accumulated other comprehensive income

    182,975114,194Total Cephalon stockholders' equity

    2,633,4322,261,958Noncontrolling Interest

    34,160216,115Total equity

    2,667,5922,478,073$ 4,891,833$ 4,658,095CEPHALON, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)Year EndedDecember 31, 20102009CASH FLOWS FROM OPERATING ACTIVITIES:Net income

    $
    417,683$
    210,727Adjustments to reconcile net income to net cash provided by operating activities:Deferred income tax expense (benefit)

    (36,889)(84,155)Shortfall tax benefits from stock-based compensation

    (3,915)(38)Depreciation and amortization

    212,823186,192Stock-based compensation expense

    49,89050,410Changes in fair value of investments

    (7,931)-Impairment charges

    -182,080Amortization of debt discount and debt issuance costs

    67,27459,145Loss (gain) on foreign exchange contracts

    9,499(26,754)Gain on acquisition of Arana Therapeutics Limited

    -(10,008)Acquired in-process research and development

    -8,366Other

    2,368(3,503)Changes in operating assets and liabilities, net of acquisitions:Receivables

    16,88881,022Inventory

    36,114(8,604)Other assets

    54,726(14,348)Accounts payable, accrued expenses and deferred revenues

    19,22999,013Other liabilities

    (56,002)(48,194)Net cash provided by operating activities

    781,757681,351CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment

    (57,761)(60,927)Proceeds from sale of property and equipment

    4,748-Cash balance from consolidation of variable interest entities

    -53,706Acquisition of intangible assets

    -(53,324)Investment in Ception Therapeutics, Inc.

    -(75,000)Investment in BioAssets Development Corporation

    -(30,000)Purchases of investments

    (148,987)(11,797)Acquisition of Arana Therapeutics Limited, net of cash acquired

    -(232,527)Acquisition of Mepha GmbH, net of cash acquired

    (549,463)-(Cash settlements of) proceeds from foreign exchange contracts

    (9,499)26,754Sales and maturities of available-for-sale investments

    -125,026Net cash used for investing activities

    (760,962)(258,089)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from sale of common stock

    -288,000Proceeds from exercises of common stock options

    27,39110,211Windfall tax benefits from stock-based compensation

    4,6442,017Acquisition of treasury stock

    (9,306)(6,722)Acquisition of Ception Therapeutics, Inc. noncontrolling interest

    (299,289)-Acquisition of BioAssets Development Corporation noncontrolling interest

    (16,342)Payments on and retirements of long-term debt

    (222,959)(13,412)Net proceeds from issuance of convertible subordinated notes

    -484,719Proceeds from sale of warrants

    -37,640Purchase of convertible note hedge

    -(121,040)Net cash provided by (used for) financing activities

    (515,861)681,413EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

    7,67018,501NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

    (487,396)1,123,176CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

    1,647,635524,459CASH AND CASH EQUIVALENTS, END OF PERIOD

    $ 1,160,239$ 1,647,635CEPHALON, INC. AND SUBSIDIARIESReconciliation of Projected GAAP Basic Income per Common Shareto Basic Adjusted Income Per Common Share Guidance(Unaudited)Three Months EndedTwelve Months EndedMarch 31, 2011December 31, 2011Projected GAAP basic income per common share$ 1.50

    $ 1.70$ 7.14

    $ 7.44Amortization of current intangibles0.37

    0.371.44

    1.44Restructuring adjustments0.01

    0.010.04

    0.04Interest expense adjustments0.21

    0.210.85

    0.85Tax effect of pre-tax adjustments at the applicable tax rates(0.19)

    (0.19)(0.77)

    (0.77)Basic adjusted income per common share guidance $1.90

    $2.10$8.70

    $9.00The company’s guidance is being issued based on certain assumptions including:

  • Adjusted effective tax rate of approximately 33.0% in 2011;
  • Weighted average number of common shares outstanding of 75.8 and 76.4 million shares for the three months ended March 31, 2011 and year ended December 31, 2011, respectively; and
  • No generic competition for AMRIX and FENTORA in 2011.


  • '/>"/>

    SOURCE Cephalon, Inc.
    Copyright©2010 PR Newswire.
    All rights reserved


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