Cephalon Drug May Be Delayed

Cephalon's (CEPH) shares slipped Thursday after the company said there might be a regulatory delay for its sleep-disorder drug Nuvigil.

Though the Food and Drug Administration is supposed to act by year end, the decision could be pushed back. The hold up isn't related to safety or effectiveness, but instead relates to negotiations on the wording of the label.

Cephalon said it's collecting extra information sought by the FDA and will submit it "within the next few weeks." Company executives said they were pleased with their discussions with the FDA even as the stock closed at $73.81, down $1.06, or 1.4%. The shares dropped as low as $73.03.

The company said its previously announced guidance for fiscal 2007 "will remain in effect, notwithstanding any delay" in the FDA review. Sales are expected to be $1.68 billion to $1.72 billion. Earnings, excluding stock-based compensation expenses, are forecast at $4.50 to $4.60 a share.

The label issue is complex because the FDA wants information about another Cephalon drug, one that was rejected by the agency, included in Nuvigil's label. At issue is modafinil, the ingredient in Nuvigil, which will be prescribed for adults. A stronger dose of modafinil was the ingredient in Sparlon, an experimental Cephalon product for treating attention deficit hyperactivity disorder in children.

An FDA advisory committee voted against Sparlon in March, even though it said the drug was effective. The agency formally rejected the drug in August, and Cephalon halted work on Sparlon.