Cephalon reports earnings, agrees to settle probes

CEPH reported 3Q07 basic adjusted EPS of $1.08, down from $1.71 in 3Q06. The Street was expecting $0.85. CEPH reported 3Q07 sales of $428.7 million, down from $457.2 million in 3Q06. Sales of pain products declined 33% to $121.8 million, which the company attributed to generic competition with Actiq transmucosal fentanyl for breakthrough cancer pain. Sales of CEPH's CNS drugs increased 9% to $230.9 million.

CEPH also said that it reached an agreement in principle with the U.S. Attorney's Office in Philadelphia and the U.S. Department of Justice related to previously disclosed investigations into the company's sales and marketing practices for its products. The company expects to pay $425 million as part of a comprehensive settlement of federal and related state Medicaid claims for which CEPH has increased its existing financial reserves by $369 million. The company set aside $56 million last quarter. CEPH also said it will agree to a single misdemeanor violation of the Food, Drug and Cosmetic Act and enter into a corporate integrity agreement with the HHS Office of Inspector General. An investigation by the Office of the Connecticut Attorney General is ongoing. ...