This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Cephalon-Cima Merger Gets OK

Updated from 3:10 p.m. EDT

The Federal Trade Commission has alleviated the long-running angst of arbitragers and Internet chat-room investors by finally giving the OK to the merger of Cephalon (CEPH) and Cima Labs (Cima).

The agency endorsed the deal late Monday, and the 12-month-long saga apparently will be concluded in a few days.

The merger had achieved near-soap opera status. Here's a summary: Cima was approached with a stock swap offer from aaiPharma (AAII) in early August 2003. Cima agreed, then Cephalon came along with a cash bid of $26 a share that was slightly better than aaiPharma's offer. But Cima rejected that last September.

In October, a mystery bidder entered the fray with a slightly higher bid. But in November, Cima agreed to a Cephalon cash bid of $34 a share. However, the Cephalon-Cima deal was held up by the FTC, which asked the companies in January for more information. While the FTC mulled the data, Cima investors stewed, as the stock dipped as low as $30 during the agency's deliberations.

The key sticking point was the potential anti-trust issue involving cancer-pain treatments marketed by Cephalon and under development by Cima. Cephalon sells Actiq, which looks like a lollipop, but is a treatment for sharp bouts of pain experienced by cancer patients. This pain is called breakthrough cancer pain, and the FTC said Cephalon's proprietary drug is the only such breakthrough cancer-pain product. The main ingredient in Actiq is a narcotic analgesic called fentanyl.

Cima has been working on a version of fentanyl called OraVescent fentanyl, a fast-dissolving pill that the FTC said would give Cephalon a monopoly in the breakthrough cancer-pain market and considerable power to discourage generic developers of Actiq.

The FTC says the U.S. breakthrough cancer-pain drug market is a $200-plus million a year market that is "growing rapidly." Cima has said that it expects to seek approval by the Food and Drug Administration of OraVescent fentanyl later this year or early next year. If all goes well, the drug could be available in late 2006. Cephalon also hopes to launch a sugar-free version of Actiq by mid-2005, contingent upon FDA approval.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs