Cephalon Inc.'s (CEPH) second-quarter earnings rose 33% on an
investment gain, but the biopharmaceutical company's adjusted
profit fell, breaking a long streak, on weak sales for central
nervous systems drugs.
Sales of central-nervous-system drugs, the company's top-selling
category, dropped 4.8%, while the smaller divisions for pain and
oncology products saw sales rise 4.4% and 22%, respectively.
The company's core profit had increased for three years straight
until the latest period. The pace of growth in
central-nervous-system drugs had been abating before declining in
the latest period, as have the rates for pain and oncology.
Cephalon posted a profit of $118.2 million, or $1.34 a share,
from $89.1 million, or $1.11 a share, a year earlier. The latest
results included a large gain on the fair value of investments,
among other items. Excluding them, adjusted earnings fell to $1.62
a share from $2.05.
Revenue increased 1.6% to $738.3 million.
Analysts expected earnings of $2.06 a share on revenue of $764
million.
Gross margin as a percentage of total revenue rose to 83.2% from
76.5%. But costs for research and development jumped 33%.
In May, Cephalon agreed to a takeover by Teva Pharmaceutical
Industries Ltd. (TEVA, TEVA.TV) for $6.8 billion, which prevailed
over a hostile bid from Valeant Pharmaceuticals International Inc.
(VRX, VRX.T). In June, U.S. antitrust regulators requested more
details about the deal, a development Teva said it expected.
Shares were up 0.2% at $80.09 after hours. Through the close,
the stock has risen 30% so far this year, better than the wider
market.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com