Oct. 27, 2009 (PR Newswire) --

FRAZER, Pa., Oct. 27 /PRNewswire-FirstCall/ -- Cephalon, Inc. (Nasdaq: CEPH) today reported third quarter 2009 net sales of $535.2 million, a 9 percent increase compared to net sales of $489.7 million for the third quarter 2008. Basic income per common share for the quarter was $1.38. Excluding amortization expense and certain other items, basic adjusted income per common share for the quarter was $1.70, an increase of 25 percent over the comparable figure of $1.36 for the same period in 2008. Adjusted net income for the third quarter of 2009 was $126.7 million, a 36 percent increase over the comparable $92.9 million for the third quarter of 2008. This exceeded the company's adjusted net income guidance range of $108 to $116 million.

Central nervous system (CNS) franchise net sales were $291.9 million during the quarter, a 7 percent increase compared to the same period last year. Pain franchise reported net sales of $116.3 million, a 1 percent decrease versus third quarter 2008. Oncology franchise net sales were $83.1 million, a 58 percent increase over the same period last year due to strong sales of TREANDA® (bendamustine hydrochloride) of $54.5 million.

During the quarter Cephalon recorded net cash provided by operating activities of $203.6 million bringing the year-to-date cash flow from operations to $517.1 million.

"The exceptional launch of NUVIGIL was the highlight of the quarter," said Frank Baldino, Jr., Ph.D., Chairman and CEO. "In addition, we have assembled the deepest and most diverse pipeline in our history with a variety of small molecules and biologics being studied for pain, oncology, and inflammatory diseases. We look forward to developing this diverse pipeline with the goal of creating important new medicines for patients."

The company is updating its guidance for 2009. Total net sales guidance is now $2.125-$2.175 billion. This includes CNS franchise net sales of $1.150-$1.170 billion, pain franchise net sales of $480-$500 million, oncology franchise net sales of $315-$335 million, and other product net sales of $160-$175 million. Full year R&D and SG&A expense guidance is now $400-$415 million and $800-$815 million, respectively. Adjusted net income guidance remains unchanged at $457-$464 million. Basic adjusted income per common share guidance also remains unchanged at $6.30-$6.40.

Cephalon is introducing 2010 net sales guidance of $2.325 - $2.400 billion. This includes CNS franchise net sales of $1.180 - $1.220 billion, pain franchise net sales of $535 - $570 million, oncology franchise net sales of $400 - $430 million, and other product net sales of $200 - $220 million. R&D and SG&A guidance for 2010 are $470 - $490 million and $840 - $860 million, respectively.

The company also is introducing adjusted net income for 2010 of $495 - $510 million. This represents growth of approximately 9 percent over our 2009 guidance. Cephalon is introducing 2010 adjusted net income per common share guidance of $6.50 - $6.70.

Basic adjusted income per common share for both the full-year 2009 and full-year 2010 is reconciled below and is subject to the assumptions set forth therein. References in this press release to basic income per common share, basic adjusted income per common share, basic adjusted income per common share guidance, adjusted net income, adjusted net income guidance, adjusted net income per common share, adjusted net income per common share guidance refers to those metrics on an "attributable to Cephalon" basis and does not include any income or losses attributable to noncontrolling interests.

Cephalon's management will discuss the company's third 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 +1-785-830-1926 and refer to conference code number 8349052. 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® (cyclobenzaprine hydrochloride extended-release capsules), TREANDA® for Injection, FENTORA® (fentanyl buccal tablet) [C-II], PROVIGIL® (modafinil) Tablets [C-IV], TRISENOX® (arsenic trioxide) injection, GABITRIL® (tiagabine hydrochloride), NUVIGIL® (armodafinil) Tablets [C-IV] and ACTIQ® (oral transmucosal fentanyl citrate) [C-II]. 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; net sales, adjusted net income and basic adjusted income per common share guidance for the full-year 2009 and full-year 2010 and SG&A and R&D guidance for the full-year 2009 and full-year 2010; 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.

CEPHALON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months            Nine Months
Ended                  Ended
September 30,          September 30,
-------------          -------------
As                      As
adjusted                adjusted
2009     2008*        2009       2008*
-------  ---------   ---------  ----------
REVENUES:
Net sales                  $535,223   $489,664  $1,588,610  $1,408,603
Other revenues               14,189      8,818      28,583      25,813
-------    -------   ---------   ---------
549,412    498,482   1,617,193   1,434,416
-------    -------   ---------   ---------
COSTS AND EXPENSES:
Cost of sales                90,456    121,477     293,633     312,711
Research and development     99,157     88,325     304,266     250,169
Selling, general and
administrative             194,068    222,948     618,314     631,832
Restructuring charges         1,062      1,497       3,944       6,973
Settlement reserve                -      7,450           -       7,450
Acquired in-process
research and development      6,000          -      46,118      10,000
-------    -------   ---------   ---------
390,743    441,697   1,266,275   1,219,135
-------    -------   ---------   ---------

INCOME FROM OPERATIONS        158,669     56,785     350,918     215,281
-------     ------     -------     -------

OTHER INCOME (EXPENSE):
Interest income               1,821      4,002       3,455      15,515
Interest expense            (26,495)   (19,013)    (63,213)    (62,080)
Other income (expense), net   3,775     (2,284)     42,418       1,488
------     ------      ------       -----
(20,899)   (17,295)    (17,340)    (45,077)
-------    -------     -------     -------

INCOME BEFORE INCOME TAXES    137,770     39,490     333,578     170,204

INCOME TAX EXPENSE (BENEFIT)   42,673    (66,108)    122,659     (17,727)
------    -------     -------     -------

NET INCOME                     95,097    105,598     210,919     187,931

NET LOSS ATTRIBUTABLE
TO NONCONTROLLING INTEREST     7,625          -      35,150           -
-----    -------      ------     -------

NET INCOME
ATTRIBUTABLE
TO CEPHALON, INC.           $102,722   $105,598    $246,069    $187,931
========   ========    ========    ========

BASIC INCOME PER
COMMON SHARE
ATTRIBUTABLE
TO CEPHALON, INC.              $1.38      $1.55       $3.44       $2.77
=====      =====       =====       =====

DILUTED INCOME PER
COMMON SHARE
ATTRIBUTABLE
TO CEPHALON, INC.              $1.31      $1.34       $3.17       $2.49
=====      =====       =====       =====

WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
ATTRIBUTABLE TO
CEPHALON, INC.                74,647     68,118      71,541      67,855
======     ======      ======      ======

WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING-
ASSUMING DILUTION
ATTRIBUTABLE TO CEPHALON,
INC.                          78,431     78,920      77,552      75,580
======     ======      ======      ======

*As adjusted in accordance with the transition provisions of accounting
for convertible debt instruments that may be settled in cash upon
conversion (including partial cash settlement) and accounting for
noncontrolling interests in consolidated financial statements.

CEPHALON, INC.