Clinical Stumble for Cephalon

Cephalon (CEPH) said Monday that a late-stage clinical trial for an anxiety treatment failed to meet its goals.

The announcement, made after the markets had closed, was a blow to the Frazer, Pa., company, which was hoping the drug Gabitril could be expanded from aiding epileptics, a relatively small patient base, to being prescribed for generalized anxiety disorder, a larger group.

The company provided few details, saying that the clinical trail "did not reach statistical significance" for the primary goals. Company scientists will study the results to determine if Gabitril might be effective for other diseases or conditions.

After hours, Cephalon's stock dropped $2.28, or 4.3%, to $50.50.

Gabitril is currently sold in the U.S. and Europe as an add-on therapy for adults and children 12 years and older in the treatment of partial seizures. Cephalon hoped that a broader-scope Gabitril would have reached the U.S. market by mid-2007. Gabitril was one of five drugs that the company had forecast would come to market between the beginning of 2006 and the middle of next year.

Only one of those products is available so far, the alcoholism drug Vivitrol. Cepahlon is the marketing partner for Alkermes (ALKS), the product's developer.

Cephalon has suffered setbacks and delays on several drugs this year. In March, a panel of outside advisers to the Food and Drug Administration recommended that the agency reject Sparlon, a treatment for attention deficit hyperactivity disorder. The agency is expected to rule on Sparlon in late August.

Last Month, the FDA delayed clearing Nuvigil, a sleep-disorders drug, and instead granted conditional approval. Cephalon said the delay is related to the company and the agency agreeing to the wording of the drug's label.

By the end of June, the company expects to hear from the FDA about its application for a cancer-pain drug nicknamed FEBT. Last month, Frank Baldino Jr., the chairman and CEO, forecast conditional approval by the FDA, adding that it would probably take two to six months for Cephalon to answer the agency's questions.

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