Cephalon of the USA has cut its 2007 earnings forecasts despite a surge in third-quarter profit on the back of strong sales of its narcolepsy drug Provigil.
Earnings came in a $96 million in the third quarter, more than three times the $29 million it booked in the same period of 2005, on revenues up 56% to $482 million. The strong performance prompted Cephalon to boost its 2006 earnings forecast to $5.10-$.20 per share, up from its earlier prediction of $4.10-$4.30.
But next year EPS would fall back to $4.50-$4.60, it said, impacted by the onset of generic competition to the company’s Actiq (fentanyl) painkiller product in September by Barr Laboratories.
Cephalon and Barr cut a deal earlier this year to keep the generic off the market until Fentora won approval, and Cephalon now manufactures fentanyl citrate for Barr while the Food and Drug Administration reviews the latter's own marketing application for the drug.
Cephalon recently won approval for a new product Fentora, a buccal tablet formulation of fentanyl that it hopes will offset the expected decline in Actiq revenues. The importance of this product has increased following Cephalon’s decision to drop attention-deficit hyperactivity product Sparlon (modafinil) and epilepsy drug Gabitril (tiagabine) failed to show efficacy in the potentially lucrative new indication of generalised anxiety.
Fentora has been priced at a discount to branded Actiq, and this should help accelerate take-up of the new product.
Provigil (modafinil) sales advanced 47% to $198 million, capturing the bulk of central nervous system drug sales up 40% to $212 million, while Cephalon’s range of pain products climbed 81% to $182 million.