FRAZER, Pa., Oct. 28 /PRNewswire-FirstCall/ -- Cephalon, Inc. today reported third quarter 2008 sales of $489.7 million, compared to sales of $428.7 million for the third quarter of 2007, and at the high end of the company's guidance of $480 - $490 million. Net income for the quarter was $112.0 million and basic income per common share was $1.64. Excluding amortization expense and certain other items, adjusted net income was $92.9 million and basic adjusted income per common share for the quarter was $1.36, compared to $1.08 for the same period in 2007, exceeding the company's guidance of $1.25 to $1.35.
Central nervous system (CNS) franchise sales were $273.7 million during the quarter, a 19 percent increase compared to the same period last year. The Pain franchise sales were $117.2 million compared to $121.8 million in the third quarter of 2007. AMRIX(R) (cyclobenzaprine hydrochloride extended- release capsules) sales increased 20 percent over the second quarter 2008. Oncology franchise sales were $52.4 million, an increase of 131 percent versus 2007. Sales of TREANDA(R) (bendamustine hydrochloride) for Injection were $24.6 million for the quarter, an increase of 71 percent over the second quarter of 2008.
"More and more patients are benefiting from the novel therapies that we offer. This has resulted in record sales, and adjusted earnings that exceeded the high end of our guidance. These solid results, and our confidence in our current product portfolio, enabled us to raise our guidance for the remainder of this year and issue adjusted net income guidance for 2009 that exceeds today's First Call consensus," said Frank Baldino, Jr., Ph.D., Chairman and CEO. "Despite troubled economic conditions around the world, our business remains solid. We continue to invest in our pipeline while simultaneously generating strong sales, earnings, and cash flow."
The company is updating its guidance for 2008. Total sales guidance is increased to $1.90 - $1.94 billion. This includes CNS franchise sales of $1.02 - $1.04 billion, pain franchise sales of $500 - $520 million, oncology franchise sales of $175 - $185 million, and other product sales of $200 - $210 million. Full year SG&A and R&D guidance is $800 - $815 million and $340 - $355 million, respectively. Adjusted net income guidance for 2008 is $354 - $360 million and basic adjusted income per common share guidance is increased by $0.10 per share to $5.20 - $5.30.
Cephalon is introducing 2009 sales guidance of $2.175 - $2.225 billion. This includes CNS franchise sales of $1.15 - $1.18 billion, pain franchise sales of $535 - $560 million, oncology franchise sales of $265 - $280 million, and other product sales of $180 - $205 million. SG&A and R&D guidance for 2009 are $840 - $860 million and $390 - $410 million, respectively.
The company also is introducing adjusted net income guidance for 2009 of $452 - $459 million. This represents growth of approximately 27 percent over our increased 2008 guidance. Cephalon is introducing 2009 basic adjusted income per common share guidance of $6.50 - $6.60.
Basic adjusted income per common share guidance for both the full-year 2008 and full-year 2009 is reconciled below and is subject to the assumptions set forth therein.
Cephalon's management will discuss the company's third quarter 2008 performance in a conference call with investors beginning at 5:00 p.m. U.S. EDT today. To participate in the conference call, dial +1-913-312-9315 and refer to conference code number 8454517. 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.
Founded in 1987, Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and commercialization of innovative products in four core therapeutic areas: central nervous system, pain, oncology and addiction. A member of the Fortune 1000, 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. The company's European headquarters are located in Maisons-Alfort, France.
The company's proprietary products in the United States include: AMRIX, TREANDA, FENTORA(R) (fentanyl buccal tablet) [C-II], PROVIGIL(R) (modafinil) Tablets [C-IV], TRISENOX(R) (arsenic trioxide) injection, VIVITROL(R) (naltrexone for extended-release injectable suspension), GABITRIL(R) (tiagabine hydrochloride), NUVIGIL(TM) (armodafinil) Tablets [C-IV] and ACTIQ(R) (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; characterizations of our business, sales, earnings and cash flow in light of current general economic conditions; sales, SG&A, R&D, adjusted net income and basic adjusted income per common share guidance for full-year 2008 and 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.
(1) To exclude the on-going amortization of acquired intangible assets ($24.0 million in 2008; $22.3 million in 2007), accelerated depreciation related to the CIMA LABS restructuring ($1.6 million in 2008), accelerated depreciation related to the proposed divestiture at the Mitry-Mory facility ($2.9 million in 2008), and the write-off of purchase commitments in excess of estimated requirements ($26.0 million in 2008).
(2) In 2008, to exclude accelerated depreciation related to the proposed divestiture at the Mitry-Mory facility. In 2007, to exclude the recognition of a milestone related to the FDA's acceptance of our NDA filing for TREANDA (bendamustine HCl).
(3) To exclude charges related to the estimated termination payments due to Takeda Pharmaceuticals North America, Inc.
(4) In 2008, to exclude charges related to the settlement of investigations by the Offices of the Attorney General of Connecticut and Massachusetts and estimated relator attorney fees. In 2007, to exclude the reserve established for the minimum liability related to the potential settlement of the investigations by the U.S. Attorney's Office.
(5) To exclude the forgiveness of a mortgage loan by the Pennsylvania Industrial Development Board ("PIDA").
(6) To exclude the accrued interest related to the settlement reached with the U.S. Attorney's Office.
(7) To exclude costs related to the CIMA LABS restructuring announced in January 2008.
(8) To reflect the tax effect of pre-tax adjustments at the applicable tax rates and certain other tax adjustments primarily related to changes in valuation allowances, the settlement of the investigations by the U.S. Attorney's Office and other changes in tax assets and liabilities. The 2008 amount includes $84.5 million of tax benefits for the settlement with the U.S. Attorney's Office, for which the related expense was recorded in 2007 and for the states of Connecticut and Massachusetts, for which the related expense was recorded in the third quarter of 2008.
(1) To exclude the on-going amortization of acquired intangible assets ($77.0 million in 2008; $64.2 million in 2007), accelerated depreciation related to the CIMA LABS restructuring ($5.4 million in 2008), accelerated depreciation related to the proposed divestiture at the Mitry-Mory facility ($2.9 million in 2008), and the write-off of purchase commitments in excess of estimated requirements ($26.0 million in 2008).
(2) To exclude charges related to payments for several research and development collaborations ($6.0 million in 2008; $26.5 million in 2007), other charges related to employee severance costs ($1.8 million in 2008), and accelerated depreciation related to the proposed divestiture at the Mitry-Mory facility ($0.3 million in 2008). In 2007, we also excluded the recognition of a milestone ($15.0 million) related to the FDA's acceptance of our NDA filing for TREANDA.
(3) To exclude charges related to employee severance costs ($3.0 million) and charges related to the estimated termination payments due to Takeda Pharmaceuticals North America, Inc. ($27.2 million).
(4) In 2008, to exclude charges related to the settlement of investigations by the Offices of the Attorney General of Connecticut and Massachusetts and estimated relator attorney fees. In 2007, to exclude the reserve established for the minimum liability related to the potential settlement of the investigations by the U.S. Attorney's Office.
(5) To exclude the pre-tax gain related to the sale of certain investments.
(6) To exclude the forgiveness of a mortgage loan by the PIDA.
(7) To exclude the accrued interest related to the settlement reached with U.S. Attorney's Office.
(8) To exclude costs related to the CIMA LABS restructuring announced in January 2008.
(9) To exclude charges related to the acquisition of licensed technology in the oncology field.
(10) To reflect the tax effect of pre-tax adjustments at the applicable tax rates and certain other tax adjustments primarily related to changes in valuation allowances, the settlement of the investigations by the U.S. Attorney's Office and other changes in tax assets and liabilities. The 2008 amount includes $84.5 million of tax benefits for the settlement with the U.S. Attorney's Office, for which the related expense was recorded in 2007 and for the states of Connecticut and Massachusetts, for which the related expense was recorded in the third quarter of 2008.
The company's guidance is being issued based on certain assumptions including:
-- Adjusted effective tax rate of approximately 35.5 to 36.5 percent in 2008 and 35.0 percent in 2009; and
-- Weighted average number of common shares outstanding of 68.0 and 69.5 million shares for the twelve months ended December 31, 2008 and 2009, respectively.
CONTACT: Media, Sheryl Williams, +1-610-738-6493, swilliam@cephalon.com,
or Investors, Robert (Chip) Merritt, +1-610-738-6376, cmerritt@cephalon.com
Web site: http://www.cephalon.com/
Company News On-Call: http://www.prnewswire.com/comp/134563.html /
