Wall Street Loses Sleep Over Cephalon's Stay-Awake Pill
Mixed opinions from a Food and Drug Administration advisory committee on a stay-awake pill made by Cephalon (CEPH) are provoking a lot of tossing and turning on Wall Street.
The company's stock has been bouncing around ever since the panel's opinions were released Thursday just before markets closed. Analysts have been bouncing around, too, with many injecting uncertainty into their optimism. One indicator of how the FDA panel caused sleeplessness on Wall Street: Seven analysts filed Cephalon research notes between midnight and 6:30 a.m. Friday.
The subject of the swirling sentiment is Provigil, a Cephalon drug that is approved by the FDA for treating sleepiness associated with narcolepsy, a disease in which people can fall asleep in the daytime, any time. West Chester, Pa.-based Cephalon had asked the FDA to approve an expanded use of the drug.
Federal law allows doctors to prescribe a drug for anything as long as the FDA approves it for a single use. In the case of Provigil, Cephalon says only 11% of its sales come from treating narcolepsy.Off-label uses include treating fatigue in depressed patients (38%) and in multiple sclerosis patients (12%). Provigil had sales of $196.3 million last year. Federal law also prohibits companies from marketing drugs for any disease that isn't listed on the drug's label. That means Cephalon can only market Provigil to a small group of specialists -- neurologists, psychiatrists, sleep disorder experts -- who treat narcoleptics. There are 50,000 narcoleptics in the U.S. But if Cephalon could convince the FDA to expand the number of diseases and conditions for Provigil, then Cephalon could reach the marketing goldmine -- general practitioners. Based on the FDA advisory committee's decision, Cephalon came away with some gold nuggets as well as some iron pyrite.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV