Cephalon Inc. (CEPH) reported strong third-quarter earnings of $1.62 per share that easily surpassed the Zacks Consensus Estimate of $1.42 per share and the year ago earnings of $1.18. Revenues increased 10.2% to $549 million, consisting of $535 million in product sales and $14.2 million in other revenues. Higher revenues and lower costs contributed to the robust results.   Revenues were driven by contributions from the central nervous system (CNS) and oncology franchises, which posted sales of $291.9 million (up 7%) and $83.1 million (up 58%), respectively. Oncology drug Treanda continued to perform well, with sales coming in at $54.5 million. Additional data presentations on Treanda should help drive sales, especially in the indolent non-Hodgkin’s lymphoma (NHL) market.   Cephalon reported $20.9 million in sales of its follow-on sleep franchise product, Nuvigil, which was launched on June 1, 2009. The company reported that Nuvigil gained a 19% share ...

Cephalon, Inc. (CEPH) recently received a Paragraph IV Certification Notice Letter regarding an Abbreviated New Drug Application (ANDA), which has been filed by Teva Pharmaceuticals (TEVA) with the U.S. Food and Drug Administration (FDA). Generic player, Teva, is looking to market and sell its generic version of Cephalon’s Nuvigil (50 mg, 100 mg, 150 mg, 200 mg and 250 mg strengths).   Nuvigil (armodafinil) is a follow-on version of Provigil (modafinil), which contributed about 50% to revenues in 2008. With Provigil slated to face generics from 2012, Cephalon is looking to protect its sleep franchise sales by switching patients to Nuvigil.   Cephalon is aggressively promoting Nuvigil which was launched in June 2009. The company has taken several initiatives to ensure the smooth transition of users to Nuvigil, which has been priced at a significant discount to Provigil. Besides this, Cephalon is working on gaining approval for ...

Genzyme Corporation (GENZ) recently reported positive results from a randomized phase III study that was conducted with Campath (alemtuzumab) in combination with Fludara (fludarabine phosphate) in relapsed or refractory chronic lymphocytic leukemia (CLL) patients.  The company reported that patients treated with Campath and Fludara (FluCAM) experienced a significant improvement in progression free survival (PFS), compared to patients receiving only Fludara. The study was designed to detect at least a 50% overall improvement in PFS in the FluCAM arm compared to the Fludara arm.  Although the company did not disclose full results, Genzyme announced that the trial’s independent data safety monitoring board, in a pre-planned interim analysis, determined that the study achieved its primary endpoint and recommended early closure of the trial.  We look forward to detailed results from the study in December at the American Society of Hematology. Impressive PFS results could help the combination ...

Cephalon, Inc. (CEPH) recently received priority review from the U.S. Food and Drug Administration (FDA) for its supplemental New Drug Application (sNDA) for Nuvigil. The company had filed the sNDA in June 2009, seeking to expand Nuvigil’s label as a treatment for improving wakefulness in patients with excessive sleepiness associated with jet lag disorder due to eastbound travel. Priority review status means that a response from the agency will be out in six months instead of the usual 10-12 month review period. As such, a response from the FDA should be out by December 29, 2009. Nuvigil is Cephalon’s follow-on sleep franchise product which received FDA approval in June 2007 for the treatment of excessive sleepiness associated with obstructive sleep apnea/hypopnea syndrome (OSAHS), narcolepsy and shift work sleep disorder (SWSD). Cephalon launched Nuvigil in June 2009 and is promoting the product aggressively. The company has ...

For Immediate Release

Chicago, IL – August 7, 2009 – Zacks Equity Research highlights Baxter International (BAX) as the Bull of the Day and The Corporate Executive Board (EXBD) the Bear of the Day. In addition, Zacks Equity Research provides analysis on King Pharmaceuticals, Inc. (KG), ZymoGenetics (ZGEN) and Cephalon (CEPH).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

We believe that Baxter International’s (BAX) focus on life-sustaining products insulates its results from the current economic downturn and provide investors with good quality returns on a risk-adjusted basis.

The company has a strong product pipeline, with a number of promising products in the final stages of clinical trials. Baxter's strong market position is demonstrated in its recent quarterly performance that came ahead of guidance, while earnings exceeded

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King Pharmaceuticals, Inc. (KG) reported second-quarter earnings of 32 cents per share, 6 cents above the Zacks Consensus Estimate. However, earnings declined 8.6% from the year-ago quarter mainly due to higher operating expenses. Meanwhile, revenues came in at $445 million, up 12% year over year. Although generic versions of Altace continued to impact the top-line, products like Skelaxin, Thrombin-JMI and Flector Patch -- as well as the Meridian Auto-Injector and Animal Health segments -- posted better-than-expected sales. However, we note that both Skelaxin and Thrombin-JMI sales declined on a year-over-year basis. We expect Thrombin-JMI sales to continue declining due to the tough competition being faced by the product from ZymoGenetics’ (ZGEN) Recothrom, and Omrix Biopharmaceuticals’ Evithrom. Meanwhile, Skelaxin is facing stiff competition from Cephalon’s (CEPH) Amrix. King is currently facing patent challenges for Skelaxin and generic competition could enter later this year if the ...

Cephalon, Inc. (CEPH) reported strong second quarter results of $1.44 per share that easily surpassed the Zacks Consensus Estimate of $1.31 per share. Revenues increased 11% to $548 million. Revenues consisted of $539 million in product sales and $8.8 million in other revenues. Results were driven by strong contributions from the central nervous system (CNS) and oncology franchises, which posted sales of $290.6 million (up 16%) and $82.2 million (up 86%), respectively. Its oncology drug Treanda continued to perform well, with sales coming in at $55.8 million. Cephalon increased its guidance for the oncology franchise by $15 million to $315-$335 million. We expect Treanda to see increased uptake in the indolent non-Hodgkin’s lymphoma (NHL) market by year end. Meanwhile, Cephalon launched its follow-on sleep franchise product, Nuvigil, on June 1, 2009. Initial feedback on the product is encouraging. The company has undertaken several measures to ...

Cephalon Inc.'s (CEPH) pain management franchise will be facing new competition in the form of Onsolis, which received FDA approval on Jul 16.

BioDelivery Sciences International's (BDSI) Onsolis is a rapid-acting buccal fentanyl product indicated for the treatment of breakthrough cancer pain (BTP) in opioid tolerant patients.

Onsolis is the first branded product that will be competing directly with Actiq and Fentora for a share in the highly-competitive BTP market. We believe that Onsolis could offer certain advantages over both Actiq and Fentora.

The Onsolis patch, which is designed to adhere quickly and begin dissolving without patient effort, could be easier to use than Actiq. Actiq is available in a lollypop form and patients are required to actively manipulate the lollypop around the mouth until the entire lozenge has dissolved. This can take up to 30 minutes.

Therefore, Onsolis could find takers in patients who are in severe pain and are

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Cephalon Inc. (CEPH) recently announced results from a pivotal phase II/III trial that was conducted with lestaurtinib (CEP-701) in patients with relapsed acute myelogenous leukemia (AML) expressing FLT3 activating mutations.

Results showed that patients treated with lestaurtinib demonstrated similar rates of complete response compared to patients receiving induction therapy. However, no increased benefit in overall survival was observed in the lestaurtinib group. Cephalon intends to present results from the AML study at a future medical meeting.

Lestaurtinib is an oral small molecule tyrosine kinase inhibitor which is being developed for the treatment of AML and myeloproliferative disorder (MPD). A phase II study for the MPD indication is currently ongoing - results should be available shortly.

Following the release of the AML study results, Cephalon maintained its previously issued financial guidance for 2009. Our model remains unchanged as we had not included any sales estimates for lestaurtinib.

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Cephalon (CEPH) shares are currently trading at 9.6x our 2009 EPS estimate of $5.90 (fully-diluted). The shares declined significantly early last year on concerns regarding the growth prospects of Provigil and Fentora.The FDA complete response letter on Fentora for the management of breakthrough pain in opioid tolerant patients with chronic pain conditions also hit the stock hard. The letter asked the company to implement and show the effectiveness of proposed enhancements to the current Fentora risk management plan.Given these setbacks, investor focus has shifted to the company's emerging oncology pipeline, Amrix, and the switching of users to Nuvigil. Amrix should be a major contributor to revenues going forward.Cephalon has also made significant progress with its oncology pipeline. We saw encouraging phase III results on oncology candidate Treanda at the annual meeting of the American Society of Hematology, and were pleased to see ...