Cephalon ADHD Drug Rejected

Cephalon (CEPH Quote) said the Food and Drug Administration has rejected its bid to get approval for Sparlon, an attention deficit hyperactivity disorder drug for which the company had tremendous hopes.

Because the FDA turned down the application, Cephalon said it won't pursue further development of Sparlon. Cephalon also said the decision won't affect its previously issued sales and earnings guidance or its expectations for strong profits in 2007.

Earlier this year, a medical advisory committee to the FDA voted 12 to 1 to reject Cephalon's application for Sparlon, recommending that the company provide additional information about its possible link to a rare and potentially deadly skin disorder called Stevens-Johnson syndrome.

The FDA panel said Sparlon was effective against ADHD, but they indicated that the one case of the skin disease found among more than 900 participants in clinical trials meant the drug shouldn't be cleared.

"Obviously, we are extremely disappointed and surprised that the agency disagreed with the opinions of our experts, which were based on photographic and other evidence concerning a single suspected case of Stevens-Johnson syndrome," said Frank Baldino Jr., Cephalon's chairman and CEO.

The FDA isn't required to follow the opinion of its advisers, but it usually does. Shares of Cephalon were halted for late trading Thursday. In the regular session, the stock fell $1.30, or 2%, to $63.95.