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Cephalon Posts Increased Sales

First-quarter revenue climbs 22% over last year.



reported a leap in first-quarter revenue Tuesday thanks to a better-than-expected showing of its cancer-pain drugs.

Revenue rose 22% to $437 million as Cephalon released financial results that essentially repeated the first-quarter and full-year earnings and sales

information it offered last week.

Tracking Cephalon's financial performance can prove challenging because, unlike most companies, the Frazer, Pa.-based drugmaker makes profit predictions using basic earnings-per-share figures rather than diluted earnings per share. Diluted EPS assumes that all stock options, warrants and convertible bonds were exchanged for stock. Cephalon does issue diluted EPS data for quarters that have ended.

Thus, on a GAAP and diluted basis, Cephalon earned $75.2 million, or 99 cents a share, for the three months ended March 31. For the same period last year, Cephalon earned $3.6 million, or 5 cents a share.

Using basic EPS and excluding one-time items, Cephalon reported first-quarter earnings of $1.45 a share vs. 78 cents for the same period last year. This was in line with the forecast Cephalon provided last week for basic EPS of $1.40 to $1.45, excluding special items.

On Tuesday, Cephalon also repeated its forecast that basic EPS for the full year would be $4.40 to $4.50, excluding special items. Full-year sales will be $1.68 billion to $1.73 billion.

The company also introduced a second-quarter sales forecast of $415 million to $425 million. Basic earnings per share, excluding special items, will be in the range of $1.05 to $1.15.

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"We delivered remarkable earnings performance in the first quarter of 2007 as we continue to effectively execute across all aspects of our business," said Frank Baldino, the chairman and CEO.

Product Performance

Cephalon's cancer pain franchise produced sales of $131.4 million, up from $117.5 million for the same period last year. The franchise includes the brand-name products Actiq and Fentora as well as a generic version of Actiq.

Sales of central-nervous system drugs -- Provigil for sleep disorders and Gabitril for epileptic seizures -- rose 35% to $217.5 million, of which Provigil contributed $201.3 million.

Cephalon didn't provide data on the alcoholism treatment Vivitrol, which is off to a poor start. The drug, licensed from


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, was launched in mid-2006. Baldino said Cephalon is continuing a stepped-up education campaign for doctors and consumers for the once-a-month injectable Vivitrol.

Baldino said he expects to hear from the Food and Drug Administration in mid-June on Nuvigil, a follow-up to Provigil. Cephalon is seeking FDA approval for three types of sleep disorders for this drug, which has had a

series of regulatory delays. Even if the FDA approves this drug, which is a cousin of Provigil, Baldino said, Cephalon won't market Nuvigil this year.

Cephalon announced its financial results after markets had closed. Shares, which had ended the regular session down 3 cents at $79.58, continued moving lower after hours, recently losing another 38 cents.