Cephalon shares move higher

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Cephalon shares move higher
	2006-01-30 00:36:30
Cephalon shares move higher despite drug's approval delay By Linda Loyd INQUIRER STAFF WRITER Cephalon Inc. shares rose nearly 7 percent today, despite a Food and Drug Administration decision late Wednesday that the biotechnology company must put its new treatment for attention deficit hyperactivity disorder before an FDA advisory panel, delaying approval which had been expected this week. The company's shares gained after Wall Street analysts said they expect the treatment, called Sparlon, to be approved in the second quarter. Analysts said they don't think the unexpected FDA panel meeting on March 23 signals problems with the drug, which is a new formulation of modafinal, for children and adolescents. Corey Davis, analyst at J.P. Morgan Securities Inc., said in an update to clients that the FDA's decision for a hearing is "consistent with new FDA protocol putting almost all new drugs through panels." Cephalon received an "approvable"; letter for Sparlon in October, and the company said at the time only the drug's label had to be negotiated with the FDA. Davis said today, "We can't ever recall a panel [meeting] called after an approvable letter and before final approval, supporting our view of no real issues with Sparlon." S.G. Cowen analyst Eric Schmidt said in a note to clients today the Frazer company recently settled with three of the four generic drug makers challenging the patent on its biggest drug, Provigil. While those settlements shorten the patent life of the sleep-disorder medicine, they give Cephalon income from generic sales and will save it from the uncertainty and expense of costly litigation. Analysts also expect Cephalon will soon settle with Barr Laboratories, the last generic maker to challenge the Provigil patent, which will give the company "at least six more years of exclusivity," said Davis. After traded had ended on the stock market Wednesday, Cephalon said it plans to revise its 2006 financial guidance on Feb 14. Analysts said they expect it will be an upward earnings revision because of the delay in Sparlon commercial launch costs and because the Provigil patent will remain with Cephalon several more years. Cephalon shares, which closed down nearly $6 on Wednesday at $66.83 -- Regards, Catherine