Cephalon, Inc. Reports Record Earnings and Raises 2010 Guidance

FRAZER, Pa., Oct. 28 /PRNewswire-FirstCall/ -- Cephalon, Inc. (Nasdaq: CEPH) today reported third quarter 2010 sales of $707.1 million, a 32 percent increase compared to sales of $535.2 million for the third quarter 2009. Basic income per common share for the quarter was $1.76. Excluding amortization expense and certain other items, basic adjusted income per common share for the quarter was $2.27, a 34 percent increase over the $1.70 for the third quarter of 2009. Adjusted net income for the third quarter of 2010 was $170.7 million, a 35 percent increase over the $126.7 million for the third quarter of 2009.

Central nervous system (CNS) franchise sales were $354.3 million during the quarter, a 19 percent increase compared to the same period last year. Pain franchise sales were $131.2 million, a 10 percent increase versus third quarter 2009. Oncology franchise sales were $132.9 million, a 60 percent increase over the same period last year due to strong sales of TREANDA® (bendamustine HCL) for Injection. Other product sales were $88.8 million, an increase of 153 percent versus third quarter of 2009 primarily due to the acquisition of Mepha in the second quarter of 2010.

"We achieved record earnings and cash flow from operations in the quarter while continuing to expand our global product offerings," said Kevin Buchi, Chief Operating Officer. "Our robust cash flow generation gives us the flexibility to invest in our rich pipeline while continuing our active business development efforts, positioning us very well for the future."

The company is updating its guidance for full year 2010. Total sales guidance is $2.69-$2.73 billion. This includes expected CNS franchise sales of $1.34-$1.37 billion, pain franchise sales of $510-$530 million, oncology franchise sales of $500-$520 million, and other product sales of $325-$345 million. Full year R&D and SG&A guidance is $430-$450 million and $910-$930 million, respectively. Adjusted net income guidance is increased to $617-$632 million and basic adjusted income per common share guidance is increased to $8.20-$8.40, assuming 75.2 million basic shares outstanding.

Cephalon is introducing full year 2011 sales guidance of $2.96-$3.04 billion. This includes CNS franchise sales of $1.39-$1.43 billion, pain franchise sales of $540-$570 million, oncology franchise sales of $570-$600 million, and other product sales of $420-$450 million. R&D and SG&A guidance for 2011 are $505-$525 million and $970 million-$1 billion, respectively.

The company also is introducing adjusted net income guidance for full year 2011 of $652-$668 million. Cephalon is introducing 2011 adjusted net income per common share guidance of $8.45-$8.65, assuming 77.2 million basic shares outstanding.

Basic adjusted income per common share guidance for both the full-year 2010 and full-year 2011 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 refer to those metrics on an "attributable to Cephalon" basis and do not include any income or losses attributable to noncontrolling interests.

The Cephalon management will discuss the company's third quarter 2010 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +913-312-0678 and refer to conference code 4886405. Investors can listen to the call live by logging on to the company's website at www.cephalon.com and clicking on "Investor Information," then "Webcast." The conference call will be archived and available to investors for one week after the call.

About Cephalon, Inc.

Cephalon is a global biopharmaceutical company dedicated to discovering, developing and bringing to market medications to improve the quality of life of individuals around the world. Since its inception in 1987, Cephalon has brought first-in-class and best-in-class medicines to patients in several therapeutic areas. Cephalon has the distinction of being one of the world's fastest-growing biopharmaceutical companies, now among the Fortune 1000 and a member of the S&P 500 Index, employing approximately 4,000 people worldwide. The company sells numerous branded and generic products around the world. In total, Cephalon sells more than 150 products in nearly 100 countries. More information on Cephalon and its products is available at http://www.cephalon.com

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; sales, adjusted net income and basic adjusted income per common share guidance for full-year 2010 and full-year 2011 and SG&A and R&D guidance for the full-year 2010 and full-year 2011; 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.