UPDATE 1-EU exec probes Cephalon/Teva modafinil agreement

Thu Apr 28, 2011 11:34am EDT

* EU regulators probe modafinil agreement

* Regulators say deal may have hindered drug's market entry

* Cephalon markets modafinil as Provigil

(Adds details, background)

BRUSSELS, April 28 (Reuters) - EU regulators have opened an antitrust probe into an agreement between U.S.-based Cephalon Inc CEPH.O and Israel's Teva Pharmaceutical Industries (TEVA.TA)TEVA.O on generic modafinil in the European market.

The European Commission, which acts as the antitrust regulator for the EU, said in a statement the agreement between Cephalon and generic drugs firm Teva "may have had the object or effect of hindering the entry of generic modafinil".

Modafinil, marketed by Cephalon as Provigil, is used to treat certain sleeping disorders.

The Commission, which has said it wants to ensure drugmakers and generics firms do not delay the market entry of cheaper pharmaceuticals, said its investigation did not mean it had conclusive proof of any infringement, but that it would give the case priority.

The investigation would look into a patent settlement agreement -- and several side deals -- between Cephalon and Teva in 2005 in Britain and the United States, it said.

As part of the agreement, Teva undertook not to sell its generic modafinil products in the European Economic Area before October 2012.

The Commission said the agreement had also been under scrutiny from U.S. antitrust investigators.

The European Commission said in January it was asking drug firms for more details of their patent deals with generics makers. The move was part of a series of EU crackdowns on possible anti-competitive practices in the pharmaceutical sector. (Reporting by Rex Merrifield; Editing by Will Waterman)

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