Cephalon 1Q profit surges on investment gain
Drugmaker Cephalon Inc., which agreed Monday to sell itself to Teva Pharmaceutical Industries Ltd., said Tuesday that its profit nearly doubled in the second quarter.
Cephalon, which sells the sleep disorder drug Provigil, said its profit rose to $211.1 million, or $2.64 per share, from $110.6 million, or $1.35 per share. Revenue rose 25 percent, to $745.1 million from $596.6 million. The company's results were aided by a large gain in its investment in Mesoblast Ltd., a company that develops adult stem cell therapies. Cephalon also said sales of cancer drugs rose 35 percent.
Analysts expected the company to report a profit of $2.04 per share and $751.9 million in revenue, according to FactSet.
Cephalon said revenue from central nervous system disorder drugs rose 7 percent to $334.7 million, with Provigil sales down 2 percent to $258.4 million and sales of the newer Nuvigil rising to $52 million from $34.9 million. Sales of pain drug sales grew 13 percent to $130.5 million as revenue from its drug Fentora increased 10 percent to $46.4 million. Cancer drug sales rose 35 percent to $149.1 million as revenue from the drug Treanda grew 45 percent to $117.7 million.
Other revenue more than tripled to $121.6 million. Cephalon bolstered those sales by acquiring Swiss drugmaker Mepha in April 2010.
The value of Cephalon's investments grew by $164.7 million in the first quarter. Almost all of that gain came from its investment in Mesoblast.
On Monday, Cephalon accepted an offer from Teva that valued the company at $6.8 billion, or $81.50 per share. Teva is the world's largest maker of generic drugs, but it also sells brand-name products including Copaxone, which is the most-prescribed multiple sclerosis drug in the world, and the Parkinson's disease drug Azilect. The Israeli company would have a portfolio of approved branded drugs worth more than $7 billion upon its acquisition of Cephalon.
The companies say they expect the deal to close during the third quarter. Cephalon shares fell 12 cents to $79.99 Tuesday. The stock rose 12 cents to $80.11 in aftermarket trading.