Cephalon, Inc. (CEPH)

[surf1944]

Cephalon: 'Not Surprised' by FDA Panel Vote

A Food and Drug Administration advisory panel voted 17-to-3 Tuesday to recommend the regulatory agency not grant wider approval for Cephalon's (CEPH - Cramer's Take - Stockpickr) pain treatment Fentora on the premise that such an expansion could increase the potential for drug abuse.

The drug is currently approved to treat breakthrough pain, or severe pain in cancer patients who are already taking prescription opioids. But Cephalon was seeking to expand the approved uses to include chronic pain in non-cancer patients.

In 2007, Fentora accounted for $135 million in sales. Cephalon said in Tuesday's panel meeting that as far as it's aware, about 80% of Fentora use is off-label in patients outside the cancer diagnosis.

FDA action on the Fentora supplemental new-drug application (sNDA) is expected by Sept. 13. The FDA isn't required to follow the recommendations of advisory panels, but it usually does.

"Although we're disappointed, we're not surprised," Cephalon CEO Frank Baldino said in a conference call after the panel vote. The company said there will be no financial impact in 2008, and current guidance -- between $5.10 and $5.20 a share on sales of between $1.83 billion and $1.88 billion -- will remain in effect. It hasn't given guidance beyond 2008.

Cephalon shares, which were halted from trading Tuesday ahead of the FDA panel vote, were losing $3.04, or 5%, to $58 in recent after-hours trading.

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