Cephalon profit tops expectations, advances Nuvigil

NEW YORK (Reuters) - Cephalon Inc CEPH.O posted a better-than-expected second-quarter profit on Tuesday and said it would begin selling its Nuvigil sleep disorder drug in the second half of 2009.

Cephalon won U.S. approval for Nuvigil last year but had long maintained it would not start selling the follow-up version of its flagship drug Provigil until 2010, when the older medicine’s patent would be closer to expiration.

The Frazer, Pennsylvania-based company posted a second-quarter net profit of $60.1 million, or 80 cents per share, compared with a net loss of $4.3 million, or 6 cents a share, a year ago, when it took a large charge to establish a legal reserve fund.

Excluding amortization expenses and other items, Cephalon earned $1.13 per share, topping analysts’ average expectations by 6 cents, according to Reuters Estimates.

Increased Provigil revenue and sales of two new products helped offset steadily declining sales of its Actiq cancer pain drug, which is facing generic competition.

“An earlier launch of Nuvigil and higher spending on Amrix this year should provide a foundation for even stronger growth in the years ahead,” Chief Executive Frank Baldino said in a statement.

The company tweaked its 2008 sales forecast, raising it to $1.86 billion to $1.91 billion from its prior view of $1.83 billion to $1.88 billion. But it maintained its adjusted earnings forecast of $5.10 to $5.20 per share.

For the third quarter, Cephalon expects adjusted earnings of $1.25 to $1.35 per share on sales of $480 million to $490 million.

Revenue for the quarter rose 10 percent to $492.7 million, exceeding Wall Street estimates of $469.8 million.

Sales of Provigil for the sleep disorder narcolepsy also rose 10 percent to $234.8 million for the quarter, helped by a price increase.

Actiq sales fell 19 percent to $52.2 million, while sales of its next generation pain drug Fentora were flat at $36.4 million.

But the company’s two newest drugs got off to solid starts with the cancer medicine Treanda, widely considered to be Cephalon’s next big growth driver, posting sales of $14.4 million. A Leerink Swann analyst had estimated Treanda sales of $10 million.

The new muscle relaxer Amrix had sales of $17.1 million.

Reporting by Bill Berkrot; Editing by Braden Reddall, Gary Hill