New Delay for Nuvigil

Cephalon (CEPH Quote) has been hit with another regulatory delay for its sleep-disorder drug Nuvigil.

After the markets had closed on Friday, the company said the Food and Drug Administration issued another conditional approval letter for the drug, which, Cephalon says, will be sold for three types of sleep problems.

The agency has asked Cephalon to provide "a standard safety update from clinical trials conducted since the last update in June 2006," as well as promotional materials to be used for the product, the company said. Cephalon will respond within 30 days. It expects the agency to complete a review within 60 days after the response. The FDA hasn't asked for extra tests.

"While we fully appreciate that this regulatory review has been difficult and lengthy for stockholders and others interested in the outcome ... the final result will prove to be worth the investment of time and effort," said Frank Baldino Jr., chairman and CEO of Cephalon.

The extended FDA review of Nuvigil was caused in part by discussions about what the drug label would say. The proposed label contains a warning that Nuvigil patients should be aware of a potential skin rash. Cephalon said the agency will ask for similar language to be applied to Nuvigil's older cousin called Provigil. This drug accounted for $728 million of Cephalon's $1.76 billion in sales last year.

"We have worked diligently with the FDA over the past six months on this issue, and they have now informed us that their review is complete," said Dr. Lesley Russell, a Cephalon executive vice president. "We are very pleased that the proposed warning language appropriately describes the product's safety profile."

The labeling debate evolved from Cephalon's attempt last year to secure FDA approval for Sparlon, a treatment for attention deficit hyperactivity disorder in children and adolescents. Sparlon's main ingredient was modafinil, a higher dose of the same ingredient found in Provigil.

The FDA rejected Sparlon last August due to one suspected case of a dangerous and sometimes fatal skin disorder among 933 children tested in clinical trials.

Cephalon produced medical records, arguing that the side-effect wasn't a rare condition called Stevens-Johnson syndrome, but the FDA held firm. The agency then began asking for more information about Provigil and its experimental cousin Nuvigil.

Cephalon filed its Nuvigil application in March 2005 and received a conditional approval letter in April 2006. The company had hoped to hear from the FDA by the end of 2006, but in December, it alerted investors that there might be another delay due to its discussions with the FDA about Nuvigil's label.