Cephalon Inc. beat Wall Street expectations yesterday with sharply higher first-quarter profit than a year earlier, when the company took sizable charges for product-development payments and other items.
The Frazer drugmaker posted a profit of $75.2 million, or 99 cents a share, compared with a profit of $3.6 million, or 5 cents a share, a year earlier. The company advised last week that its quarterly profit would be 50 percent higher than earlier forecast because of lower expenses and stronger-than-expected sales of its pain medicines.
Revenue was $437 million, up 22 percent, compared with 2006 first-quarter revenue of $356.9 million.
Excluding charges and other items, Cephalon said it earned $95.2 million, or $1.25 adjusted per share, compared with $46.7 million, or 63 cents a share, a year earlier. Those charges included several research-and-development collaborations, pretax and tax adjustments, a patent-litigation settlement, and employee severance costs associated with a European restructuring.
Analysts polled by Thomson Financial on average expected adjusted per-share earnings of $1.01 on revenue of $422.9 million.
"We are off to a truly great start" to 2007, founder and chief executive officer Frank Baldino Jr. said in a conference call. "We are transitioning to second-generation products" in pain and sleep-disorder treatments.
Cephalon said it was reaching out to doctors who had never prescribed its cancer-pain drug Actiq to tout its new Fentora. Actiq sales fell 44 percent to $65.7 million in the first quarter because of lower-cost generic versions on the market.
Cephalon's top-selling drug, Provigil, a sleep-disorder medication, had $201.3 million in first-quarter sales, up from $148.6 million in the 2006 first quarter. Provigil prescriptions were up 15 percent.
The company said it anticipated final FDA approval on Nuvigil, its next-generation sleep-disorder medication, by June 16.
During the quarter, Cephalon marketed Fentora to about 5,000 doctors and will begin calling on 17,000 physicians this month. The company is testing Fentora for medical conditions beyond "breakthrough" cancer pain - a severe spike in pain that is not accommodated by regular pain medicine - to lower back pain and neuropathic pain.
Cephalon reiterated its full-year 2007 outlook of $4.40 to $4.50 adjusted per-share earnings on revenue of $1.68 billion to $1.73 billion.
The company reduced 2007 sales projections for its central-nervous-system products to $925 million to $950 million, down $25 million. Its 2007 sales forecast for pain medicines was increased $50 million to between $425 million and $450 million.
Shares of Cephalon, which announced financial results after the stock market had closed for the day, fell 3 cents, to $79.58, on the Nasdaq.