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Ebb & Flow

Investors reacted badly to Monday's post-market news that Barr (BRL) will receive a license from Cephalon (CEPH) to sell generic oral transmucosal fentanyl starting Feb. 3, 2007.

CEPH was off $4.86 (10%) to $43 on Tuesday and closed the week down $6.07 (13%) at $42.01, even though the company said that were it not for the license, it probably would not have gone forward with its acquisition of Cima, which closed last week (see B3).

"All along, we've said that we would not close the deal if we would have had to divest either Actiq or Cima's OraVescent fentanyl" to satisfy FTC requirements, said CEPH spokesperson Chip Merritt.

Both products are for breakthrough cancer pain. CEPH gained Actiq oral transmucosal fentanyl when it acquired Anesta in 2000. Last quarter, Actiq posted sales of $85.6 million, up 63% from the 2003 period. Nevertheless, CEPH wanted to acquire Cima because it had OraVescent fentanyl in Phase III testing. That merger was announced last year (see BioCentury, Nov. 10, 2003).

CEPH believes ease of use is a potential advantage of the OraVescent version over Actiq. The latter is used as a lozenge on a stick, which could be of particular concern for cancer patients with mucositis, as transmucosal absorption is stimulated by rubbing the lozenge across the cheek. The CIMA product is a fast-dissolve transmucosal formulation.

In addition, Cima's version has patent coverage until 2019, while Actiq loses patent protection in March 2007, assuming it gets a pediatric extension. CEPH plans to seek the extension in 2005 based on a trial in children that it hopes to start this year.

CEPH initially will seek approval of OraVescent fentanyl for cancer pain, but said

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