Sales and Adjusted Net Income Exceed Guidance
NUVIGIL Launch off to Strong Start
FRAZER, Pa., Aug. 4 /PRNewswire-FirstCall/ -- Cephalon, Inc. (Nasdaq: CEPH) today reported second quarter 2009 sales of $539.0 million, an 11 percent increase compared to sales of $485.0 million for the second quarter 2008 and exceeding the company's sales guidance of $515 - $535 million. Basic income per common share for the quarter was $1.19. Excluding amortization expense and certain other items, basic adjusted income per common share for the quarter was $1.56, an increase of 25 percent over the comparable figure of $1.25 for the same period in 2008. Adjusted net income for the second quarter of 2009 was $110.7 million, a 31 percent increase over the comparable $84.5 million for the second quarter of 2008. This exceeded the company's adjusted net income guidance range of $96.6 to $103.5 million.
Central nervous system (CNS) franchise sales were $290.6 million during the quarter, a 16 percent increase compared to the same period last year. Pain franchise reported sales of $123.6 million, an 8 percent decrease versus second quarter 2008, with growing sales of AMRIX((R)) (cyclobenzaprine hydrochloride extended-release capsules) largely offsetting the continued generic erosion of ACTIQ (oral transmucosal fentanyl citrate) [C-II]. Oncology franchise sales were $82.2 million, an 86 percent increase over the same period last year due to strong sales of TREANDA((R)) (bendamustine hydrochloride) of $55.8 million.
During the quarter the company launched NUVIGIL((R))( )(armodafinil) Tablets [C-IV]. A supplemental new drug application was filed with the FDA for NUVIGIL as a treatment of excessive sleepiness associated with jet lag disorder. If approved this would be the first acute indication for the franchise and further enhance the growth potential for NUVIGIL.
"With our recent business development activities and our fourth product launch in four years, we continue to build Cephalon into a premier biotech company," said Frank Baldino, Jr., Ph.D., Chairman and CEO. "NUVIGIL, our most recent product launch, is off to a great start and in order to serve additional patients we continue to make meaningful progress with our clinical programs to further develop this product. In addition, TREANDA and AMRIX continue to experience tremendous year-over-year growth. We plan to continue to execute upon our strategy of diversification through both our internal discovery and business development activities while delivering solid financial performance."
Also during the quarter, Cephalon continued to build its biotechnology platform by acquiring a controlling interest in the Australian biotechnology company Arana Therapeutics. Arana brings to Cephalon antibody humanization and optimization technology as well as a pipeline of biologics for inflammatory diseases and cancer.
The company is updating its guidance for 2009. Total sales guidance remains $2.175-$2.225 billion. This includes CNS franchise sales of $1.16-$1.19 billion, pain franchise sales of $530-$555 million, oncology franchise sales which were increased to $315-$335 million, and other product sales of $150-$175 million. Full year R&D guidance decreased to $425-$445 million and SG&A remains $840-$860 million, respectively. Adjusted net income guidance was increased to $457-$464 million and basic adjusted income per common share guidance is $6.30-$6.40.
For the third quarter 2009, Cephalon is introducing sales guidance of $540-$560 million, adjusted net income guidance of $108-$116 million and basic adjusted income per common share guidance of $1.45-$1.55.
Basic adjusted income per common share guidance for both the third quarter 2009 and full-year 2009 is reconciled below and is subject to the assumptions set forth therein.
Cephalon's management will discuss the company's second quarter 2009 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +1-913-312-0379 and refer to conference code number 1696714. Investors can listen to the call live by logging on to the company's website at www.cephalon.com and clicking on "Investors" then "Webcast." The conference call will be archived and available to investors for one week after the call.
About Cephalon, Inc.
Founded in 1987, Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and commercialization of many unique products in four core therapeutic areas: central nervous system, inflammatory diseases, pain and oncology. A member of the Fortune 1000 and the S&P 500 Index, Cephalon currently employs approximately 3,000 people in the United States and Europe. U.S. sites include the company's headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota.
Cephalon has a growing presence in Europe, the Middle East and Africa. The Cephalon European headquarters and pre-clinical development center are located in Maisons-Alfort, France, just outside of Paris. Key business units are located in England, Ireland, France, Germany, Italy, Spain, the Netherlands for the Benelux countries, and Poland for Eastern and Central European countries. Cephalon Europe markets more than 30 products in four areas: central nervous system, pain, primary care and oncology.
The company's proprietary products in the United States include: AMRIX((R)), TREANDA((R)) for Injection, FENTORA((R)) (fentanyl buccal tablet) [C-II], PROVIGIL((R)) (modafinil) Tablets [C-IV], TRISENOX((R)) (arsenic trioxide) injection, GABITRIL((R)) (tiagabine hydrochloride), NUVIGIL((R)) and ACTIQ((R)). The company also markets numerous products internationally. Full prescribing information on its U.S. products is available at http://www.cephalon.com or by calling 1-800-896-5855.
In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Cephalon's current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs; development of potential pharmaceutical products; interpretation of clinical results; prospects for regulatory approval; manufacturing development and capabilities; market prospects for its products, including the growth and acceptance of Nuvigil, Treanda and Amrix in the market; sales, adjusted net income and basic adjusted income per common share guidance for the third quarter and full-year 2009 and SG&A and R&D guidance for the full-year 2009; and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or other words and terms of similar meaning. Cephalon's performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries as well as more specific risks and uncertainties facing Cephalon such as those set forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Cephalon does not intend to update publicly any forward-looking statement, except as required by law. The Private Securities Litigation Reform Act of 1995 permits this discussion.
This press release and/or the financial results attached to this press release include "Adjusted Net Income," "Basic Adjusted Income per Common Share," "Adjusted Net Income Guidance," "Basic Adjusted Income per Common Share Guidance," and "Diluted Adjusted Income Per Common Share," amounts that are considered "non-GAAP financial measures" under SEC rules. As required, we have provided reconciliations of these measures. Additional required information is located in the Form 8-K furnished to the SEC in connection with this press release.
Contacts:
Media: Investors:
Sheryl Williams Robert (Chip) Merritt
610-738-6493 610-738-6376
swilliam@cephalon.com cmerritt@cephalon.com
CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
As As
adjusted adjusted
2009 2008* 2009 2008*
---- --------- ---- ---------
REVENUES:
Sales $539,021 $485,042 $1,053,387 $918,939
Other revenues 8,792 7,673 14,394 16,995
----- ----- ------ ------
547,813 492,715 1,067,781 935,934
------- ------- --------- -------
COSTS AND EXPENSES:
Cost of sales 105,407 101,318 203,177 191,234
Research and development 102,085 80,409 205,109 161,844
Selling, general and
administrative 223,656 209,900 424,246 408,888
Restructuring charges 1,245 1,565 2,882 5,476
Acquired in-process
research and development 9,368 - 40,118 10,000
----- --- ------ ------
441,761 393,192 875,532 777,442
------- ------- ------- -------
INCOME FROM OPERATIONS 106,052 99,523 192,249 158,492
------- ------ ------- -------
OTHER INCOME (EXPENSE):
Interest income 930 4,912 1,634 11,513
Interest expense (20,114) (20,789) (36,718) (43,067)
Other income (expense), net 32,104 (1,543) 38,643 3,776
------ ------ ------ -----
12,920 (17,420) 3,559 (27,778)
------ ------- ----- -------
INCOME BEFORE INCOME TAXES 118,972 82,103 195,808 130,714
INCOME TAX EXPENSE 46,932 30,212 79,986 48,381
------ ------ ------ ------
NET INCOME 72,040 51,891 115,822 82,333
NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTEREST 12,724 - 27,525 -
------ --- ------ ---
NET INCOME ATTRIBUTABLE TO
CEPHALON, INC. $84,764 $51,891 $143,347 $82,333
======= ======= ======== =======
BASIC INCOME PER COMMON SHARE
ATTRIBUTABLE TO CEPHALON,
INC. $1.19 $0.77 $2.05 $1.22
===== ===== ===== =====
DILUTED INCOME PER COMMON
SHARE ATTRIBUTABLE TO
CEPHALON, INC. $1.11 $0.69 $1.87 $1.10
===== ===== ===== =====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
ATTRIBUTABLE TO CEPHALON, INC. 71,119 67,777 69,962 67,721
====== ====== ====== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING-
ASSUMING DILUTION ATTRIBUTABLE
TO CEPHALON, INC. 76,629 74,852 76,808 74,569
====== ====== ====== ======
* As adjusted for FASB Staff Position APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)" and SFAS No. 160,
"Noncontrolling Interests in Consolidated Financial Statements."
CEPHALON, INC.
