FRAZER, Pa., Aug. 2, 2011 /PRNewswire/ -- Cephalon, Inc.
(Nasdaq: CEPH) today reported second quarter 2011 net sales of
$730.1 million, a 2 percent increase
compared to net sales of $712.4
million for the second quarter of 2010. Basic income
per common share for the period was $1.54 compared to $1.18 for the second quarter of 2010.
Excluding amortization expense and certain other items,
adjusted net income for the second quarter of 2011 was $142.6 million, a 14 percent decrease versus the
same period in 2010. Basic adjusted income per common share
for the quarter was $1.86, a 15
percent decrease from the $2.20 for
the second quarter of 2010.
Central nervous system (CNS) franchise net sales were
$332.3 million during the quarter, a
5 percent decrease compared to the same period last year.
Pain franchise reported net sales of $140.6 million, a 4 percent increase versus
second quarter 2010. Oncology franchise net sales were
$158.8 million, a 22 percent increase
over the same period last year due to strong net sales of TREANDA®
(bendamustine hydrochloride) of $125.8
million. Sales of other products remained relatively
constant at $98.5 million.
During the second quarter 2011 Cephalon recorded net cash
provided by operating activities of $74.2
million and ended the period with $997.5 million of cash and cash equivalents.
"We continue to work with both US and European authorities to
obtain all necessary regulatory approvals in order to close the
transaction with Teva," said Kevin
Buchi, Chief Executive Officer.
About Cephalon, Inc.
Cephalon is a global biopharmaceutical company dedicated to
discovering, developing and bringing to market medications to
improve the quality of life of individuals around the world. Since
its inception in 1987, Cephalon has brought first-in-class and
best-in-class medicines to patients in several therapeutic areas.
Cephalon has the distinction of being one of the world's
fastest-growing biopharmaceutical companies, now among the Fortune
1000 and a member of the S&P 500 Index, employing approximately
4,000 people worldwide. The company sells numerous branded and
generic products around the world. In total, Cephalon sells more
than 180 products in more than 100 countries. More information on
Cephalon and its products is available at
http://www.cephalon.com/.
In addition to historical facts or statements of current
condition, this press release may contain forward-looking
statements. Forward-looking statements provide Cephalon's current
expectations or forecasts of future events. These may include
statements regarding Teva's proposed acquisition of Cephalon;
anticipated scientific progress on its research programs;
development of potential pharmaceutical products; interpretation of
clinical results; prospects for regulatory approval; manufacturing
development and capabilities; market prospects for its products;
and other statements regarding matters that are not historical
facts. You may identify some of these forward-looking statements by
the use of words in the statements such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe" or
other words and terms of similar meaning. Cephalon's performance
and financial results could differ materially from those reflected
in these forward-looking statements due to general financial,
economic, regulatory and political conditions affecting the
biotechnology and pharmaceutical industries as well as more
specific risks and uncertainties facing Cephalon such as those set
forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S.
Securities and Exchange Commission. Given these risks and
uncertainties, any or all of these forward-looking statements may
prove to be incorrect. Therefore, you should not rely on any such
factors or forward-looking statements. Furthermore, Cephalon does
not intend to update publicly any forward-looking statement, except
as required by law. The Private Securities Litigation Reform Act of
1995 permits this discussion.
This press release and/or the financial results attached to
this press release include "Adjusted Net Income," "Basic Adjusted
Income per Common Share," and "Diluted Adjusted Income Per Common
Share," amounts that are considered "non-GAAP financial measures"
under SEC rules. As required, we have provided reconciliations of
these measures. Additional required information is located in the
Form 8-K furnished to the SEC in connection with this press
release.
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Contacts:
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Media:
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Investors:
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Fritz Bittenbender
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Robert (Chip) Merritt
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610-883-5855
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610-738-6376
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fbittenb@cephalon.com
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cmerritt@cephalon.com
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Natalie deVane
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Joseph Marczely
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610-727-6536
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610-883-5894
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ndevane@cephalon.com
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jmarczely@cephalon.com
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CEPHALON,
INC. AND SUBSIDIARIES
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CONSOLIDATED
STATEMENTS OF OPERATIONS
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(In
thousands, except per share data)
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(Unaudited)
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Three Months
Ended
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Six Months
Ended
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June
30,
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June
30,
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2011
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2010
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2011
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2010
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REVENUES:
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Net sales
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$ 730,100
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$ 712,435
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$ 1,466,102
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$ 1,289,116
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Other revenues
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8,163
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14,475
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17,274
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34,379
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738,263
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726,910
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1,483,376
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1,323,495
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COSTS AND EXPENSES:
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Cost of sales
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123,667
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170,739
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281,650
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275,782
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Research and
development
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134,851
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101,261
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257,164
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206,638
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Selling, general and
administrative
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276,068
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258,468
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526,754
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463,109
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Change in fair value of
contingent consideration
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2,600
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-
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4,401
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-
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Restructuring
charges
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4,279
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4,581
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5,137
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5,325
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Acquired in-process
research and development
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-
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-
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30,000
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-
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Impairment and (gain) loss
on sale of assets
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48,408
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-
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54,056
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-
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589,873
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535,049
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1,159,162
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950,854
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INCOME FROM
OPERATIONS
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148,390
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191,861
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324,214
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372,641
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OTHER INCOME
(EXPENSE):
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Interest income
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1,253
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1,300
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2,270
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3,230
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Interest
expense
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(24,475)
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(28,182)
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(48,682)
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(54,973)
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Change in fair value of
investments
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99,473
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-
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264,208
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-
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Other income (expense),
net
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(26,360)
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(9,332)
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(29,388)
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(16,603)
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49,891
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(36,214)
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188,408
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(68,346)
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INCOME BEFORE INCOME
TAXES
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198,281
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155,647
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512,622
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304,295
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INCOME TAX EXPENSE
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83,089
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63,254
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185,820
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111,565
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NET INCOME
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115,192
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92,393
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326,802
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192,730
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NET LOSS (INCOME) ATTRIBUTABLE
TO NONCONTROLLING INTEREST
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2,983
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(3,329)
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2,461
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6,899
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NET INCOME ATTRIBUTABLE TO
CEPHALON, INC.
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$ 118,175
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$ 89,064
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$
329,263
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$
199,629
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BASIC INCOME PER COMMON SHARE
ATTRIBUTABLE TO CEPHALON, INC.
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$
1.54
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$
1.18
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$
4.32
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$
2.66
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DILUTED INCOME PER COMMON SHARE
ATTRIBUTABLE TO CEPHALON, INC.
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$
1.34
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$
1.11
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$
3.97
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$
2.46
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WEIGHTED AVERAGE NUMBER OF
COMMON
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SHARES OUTSTANDING ATTRIBUTABLE
TO
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CEPHALON, INC.
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76,679
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75,192
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76,213
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75,092
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WEIGHTED AVERAGE NUMBER OF
COMMON
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SHARES OUTSTANDING-ASSUMING
DILUTION
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ATTRIBUTABLE TO CEPHALON,
INC.
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88,303
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80,507
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82,871
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81,223
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CEPHALON,
INC. AND SUBSIDIARIES
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Reconciliation of GAAP Net
Income to Adjusted Net Income Attributable to Cephalon,
Inc.
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(Unaudited)
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Three Months
Ended
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June
30,
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2011
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2010
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GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC.
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$ 118,175
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$ 89,064
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Cost of sales
adjustments
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(834)
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(1)
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52,209
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(1)
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Research and development
adjustments
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320
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(2)
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317
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(2)
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Selling, general and
administrative adjustments
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24,774
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(3)
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9,225
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(3)
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Change in fair value of
contingent consideration adjustment
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2,600
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(4)
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Restructuring
adjustment
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4,279
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(5)
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4,581
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(5)
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Impairment and (gain) loss
on sale of assets adjustment
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48,408
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(6)
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Interest expense
adjustment
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16,016
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(7)
|
18,476
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(7)
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Change in fair value of
investments adjustment
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(99,473)
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(8)
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Other (income) expense
adjustment
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16,483
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(9)
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5,398
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(9)
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Income tax
adjustment
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11,875
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(10)
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(14,017)
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(10)
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*Noncontrolling Interest
adjustments:
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Other revenues
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-
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-
|
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Research and
development
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1,214
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(2,018)
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Selling, general and
administrative
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706
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200
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Interest income
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-
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-
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Interest
expense
|
424
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(3)
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Other income
(expense)
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-
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|
1
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Income taxes
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-
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(2,658)
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Less amount attributable
to noncontrolling interest
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(2,344)
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4,478
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24,448
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76,189
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|
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|
|
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ADJUSTED NET INCOME ATTRIBUTABLE
TO CEPHALON, INC.
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$ 142,623
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$ 165,253
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BASIC ADJUSTED INCOME PER COMMON
SHARE
|
$
1.86
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|
$
2.20
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DILUTED ADJUSTED INCOME PER
COMMON SHARE
|
$
1.62
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|
$
2.05
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|
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WEIGHTED AVERAGE NUMBER OF
COMMON
|
|
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SHARES OUTSTANDING
|
76,679
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|
75,192
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WEIGHTED AVERAGE NUMBER OF
COMMON
|
|
|
|
|
|
|
SHARES OUTSTANDING-ASSUMING
DILUTION
|
88,303
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|
80,507
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|
|
|
|
|
|
|
|
|
* Amounts recorded by our
Variable Interest Entities that have been excluded from net income
attributable to Cephalon, Inc.
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|
|
|
|
Notes to
Reconciliation of GAAP Net Income to Adjusted Net
Income
(1) To exclude the on-going
amortization of acquired intangible assets ($26.9M in 2011: $32.2M
in 2010), the reversal of a royalty accrual related to AMRIX
sales milestones that are no longer expected to be payable ($27.8M
in 2011), accelerated depreciation related to restructuring ($5.5M
in 2010), amortization of inventory revaluation related to Mepha
($5.0M in 2010) and the write-off of modafinil purchase commitments
in excess of estimated requirements ($9.4M in 2010).
(2) To exclude accelerated
depreciation related to worldwide restructuring ($0.3M in 2011 and
2010).
(3) In 2011, to exclude charges
related to the unsolicited proposal we received from Valeant
Pharmaceuticals International and the Agreement and Plan of Merger
with Teva Pharmaceutical Industries Ltd. ($20.9M), and charges
associated with recent acquisitions. In 2010, to exclude charges
related to the acquisition of Mepha ($7.9M) and the acquisition of
Ception noncontrolling interest ($1.4M).
(4) In 2011, to exclude the
change in fair value of the Ception Therapeutics, Inc. ($1.4M),
BioAssets Development Company ($0.3M) and Gemin X Pharmaceuticals
($0.9M) contingent consideration.
(5) To exclude costs related to
restructurings.
(6) In 2011, to exclude costs
related to the impairments of AMRIX ($43.3M) and Mepha in-process
research and development ($5.2M).
(7) To exclude imputed interest
expense associated with convertible debt.
(8) In 2011, to exclude the
change in fair value of our investments in Mesoblast Ltd. ($91.2M)
and ChemGenex Pharmaceuticals Ltd. ($8.3M).
(9) In 2011, to exclude costs
and changes in fair value of certain derivative contracts ($16.5M).
In 2010, to exclude losses related to the acquisition of
Mepha AG, including a loss on foreign exchange derivative
instruments ($2.9M) and a loss on foreign exchange of Swiss Franc
acquisition funds ($2.5M).
(10) To reflect the tax effect
of pre-tax adjustments at applicable tax rates and certain other
tax adjustments primarily related to changes in valuation
allowances and other changes in tax assets and
liabilities.
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|
|
|
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|
CEPHALON,
INC. AND SUBSIDIARIES
|
|
|
|
|
Reconciliation of GAAP Net
Income to Adjusted Net Income Attributable to Cephalon,
Inc.
|
|
|
(Unaudited)
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
GAAP NET INCOME ATTRIBUTABLE TO
CEPHALON, INC.
|
$ 329,263
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|
$ 199,629
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|
|
|
|
|
|
|
|
|
Cost of sales
adjustments
|
28,284
|
(1)
|
83,175
|
(1)
|
|
|
Research and development
adjustments
|
320
|
(2)
|
676
|
(2)
|
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Selling, general and
administrative adjustments
|
25,704
|
(3)
|
11,502
|
(3)
|
|
|
Change in fair value of
contingent consideration adjustments
|
4,401
|
(4)
|
-
|
|
|
|
Restructuring
adjustment
|
5,137
|
(5)
|
5,325
|
(5)
|
|
|
Acquired in-process
research and development adjustments
|
30,000
|
(6)
|
-
|
|
|
|
Impairment and (gain) loss
on sale of assets adjustment
|
54,056
|
(7)
|
-
|
|
|
|
Interest expense
adjustment
|
31,691
|
(8)
|
36,055
|
(8)
|
|
|
Change in fair value of
investments adjustments
|
(264,208)
|
(9)
|
-
|
|
|
|
Other (income) expense
adjustment
|
16,989
|
(10)
|
11,567
|
(10)
|
|
|
Income tax
adjustment
|
39,359
|
(11)
|
(38,690)
|
(11)
|
|
|
*Noncontrolling Interest
adjustments:
|
|
|
|
|
|
|
Other revenues
|
-
|
|
(31)
|
|
|
|
Research and
development
|
1,417
|
|
6,094
|
|
|
|
Selling, general and
administrative
|
1,063
|
|
3,222
|
|
|
|
Other income
(expense)
|
-
|
|
166
|
|
|
|
Interest income
|
-
|
|
(7)
|
|
|
|
Interest
expense
|
723
|
|
154
|
|
|
|
Income taxes
|
-
|
|
(3,848)
|
|
|
|
Less amount attributable
to noncontrolling interest
|
(3,203)
|
|
(5,750)
|
|
|
|
(28,267)
|
|
109,610
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME ATTRIBUTABLE
TO CEPHALON, INC.
|
$ 300,996
|
|
$ 309,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC ADJUSTED INCOME PER COMMON
SHARE
|
$
3.95
|
|
$
4.12
|
|
|
|
|
|
|
|
|
|
DILUTED ADJUSTED INCOME PER
COMMON SHARE
|
$
3.63
|
|
$
3.81
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
COMMON
|
|
|
|
|
|
|
SHARES OUTSTANDING
|
76,213
|
|
75,092
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
COMMON
|
|
|
|
|
|
|
SHARES OUTSTANDING-ASSUMING
DILUTION
|
82,871
|
|
81,223
|
|
|
|
|
|
|
|
|
|
* Amounts recorded by our
Variable Interest Entities that have been excluded from net income
attributable to Cephalon, Inc.
|
|
|
|
|
Notes to
Reconciliation of GAAP Net Income to Adjusted Net
Income
(1) To exclude the on-going
amortization of acquired intangible assets ($56.0M in 2011; $58.0M
in 2010), the reversal of a royalty accrual related to AMRIX sales
milestones that are no longer expected to be payable ($27.8M in
2011), accelerated depreciation related to restructuring ($10.7M in
2010), amortization of inventory revaluation related to Mepha
($5.0M in 2010) and the write-off of modafinil purchase commitments
in excess of estimated requirements ($9.4M in 2010).
(2) To exclude accelerated
depreciation related to restructuring.
(3) In 2011, to exclude charges
related to the unsolicited proposal we received from Valeant
Pharmaceuticals International and the Agreement and Plan of Merger
with Teva Pharmaceutical Industries Ltd. ($20.9M), and charges
associated with recent acquisitions. In 2010, to exclude
charges related to the acquisition of Mepha ($10.1M) and the
acquisition of Ception noncontrolling interest ($1.4M).
(4) In 2011, to exclude the
change in fair value of the Ception Therapeutics, Inc. ($2.7M),
BioAssets Development Company ($0.8M) and Gemin X Pharmaceuticals
($0.9M) contingent consideration.
(5) To exclude costs related to
restructurings.
(6) In 2011, to exclude costs
related to the acquisition of worldwide license rights to Mesoblast
Limited's proprietary technology platform.
(7) In 2011, to exclude costs
related to the impairments of AMRIX ($43.3M) and Mepha in-process
research and development ($5.2M) and costs associated with our
plant to sell our manufacturing facility in Mitry Mory, France
($6.1M), offset by a gain on the sale of our facility in Savigny le
Temple, France ($0.4M).
(8) To exclude imputed interest
expense associated with convertible debt.
(9) In 2011, to exclude the
change in fair value of our investments in Mesoblast Ltd. ($250.8M)
and ChemGenex Pharmaceuticals Ltd. ($13.4M).
(10) In 2011, to exclude costs
and changes in fair value of certain derivative contracts ($17.0M).
In 2010, to exclude losses related to the acquisition of
Mepha AG, including a loss on foreign exchange derivative
instruments ($9.1M) and a loss on foreign exchange of Swiss Franc
acquisition funds ($2.5M).
(11) To reflect the tax effect
of pre-tax adjustments at applicable tax rates and certain other
tax adjustments primarily related to; changes in valuation
allowances and other changes in tax assets and
liabilities.
|
|
|
|
|
|
|
|
CEPHALON,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
SALES DETAIL
|
|
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
%
|
|
|
|
June
30,
|
Increase
|
|
|
|
2011
|
|
2010
|
|
(Decrease)
|
|
|
|
United
States
|
|
Europe
|
|
Total
|
|
United
States
|
|
Europe
|
|
Total
|
|
United
States
|
|
Europe
|
|
Total
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CNS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary CNS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVIGIL
|
|
$
237,684
|
|
$ 13,462
|
|
$
251,146
|
|
$
268,550
|
|
$ 16,280
|
|
$
284,830
|
|
(11%)
|
|
(17%)
|
|
(12%)
|
|
|
NUVIGIL
|
|
58,576
|
|
-
|
|
58,576
|
|
40,968
|
|
-
|
|
40,968
|
|
43
|
|
-
|
|
43
|
|
|
GABITRIL
|
|
8,765
|
|
1,165
|
|
9,930
|
|
11,118
|
|
1,024
|
|
12,142
|
|
(21)
|
|
14
|
|
(18)
|
|
|
Other
Proprietary CNS
|
|
-
|
|
2,608
|
|
2,608
|
|
-
|
|
2,652
|
|
2,652
|
|
-
|
|
(2)
|
|
(2)
|
|
|
Generic CNS
|
|
-
|
|
9,990
|
|
9,990
|
|
-
|
|
8,574
|
|
8,574
|
|
-
|
|
17
|
|
17
|
|
|
CNS
|
|
305,025
|
|
27,225
|
|
332,250
|
|
320,636
|
|
28,530
|
|
349,166
|
|
(5)
|
|
(5)
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary
Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FENTORA
|
|
41,910
|
|
9,516
|
|
51,426
|
|
38,861
|
|
5,661
|
|
44,522
|
|
8
|
|
68
|
|
16
|
|
|
Other Proprietary
Pain
|
|
-
|
|
-
|
|
-
|
|
-
|
|
49
|
|
49
|
|
-
|
|
(100)
|
|
(100)
|
|
|
Generic Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACTIQ
|
|
14,607
|
|
15,387
|
|
29,994
|
|
14,471
|
|
14,067
|
|
28,538
|
|
1
|
|
9
|
|
5
|
|
|
Generic
OTFC
|
|
6,015
|
|
-
|
|
6,015
|
|
11,535
|
|
-
|
|
11,535
|
|
(48)
|
|
-
|
|
(48)
|
|
|
AMRIX
|
|
13,554
|
|
-
|
|
13,554
|
|
28,548
|
|
-
|
|
28,548
|
|
(53)
|
|
-
|
|
(53)
|
|
|
Generic
AMRIX
|
|
11,420
|
|
-
|
|
11,420
|
|
-
|
|
-
|
|
-
|
|
100
|
|
-
|
|
100
|
|
|
Other
Generic Pain
|
|
-
|
|
28,224
|
|
28,224
|
|
-
|
|
21,556
|
|
21,556
|
|
-
|
|
31
|
|
31
|
|
|
Pain
|
|
87,506
|
|
53,127
|
|
140,633
|
|
93,415
|
|
41,333
|
|
134,748
|
|
(6)
|
|
29
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary
Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TREANDA
|
|
125,847
|
|
-
|
|
125,847
|
|
99,732
|
|
-
|
|
99,732
|
|
26
|
|
-
|
|
26
|
|
|
Other
Proprietary Oncology
|
|
5,017
|
|
21,699
|
|
26,716
|
|
6,253
|
|
18,769
|
|
25,022
|
|
(20)
|
|
16
|
|
7
|
|
|
Generic
Oncology
|
|
-
|
|
6,188
|
|
6,188
|
|
-
|
|
5,704
|
|
5,704
|
|
-
|
|
8
|
|
8
|
|
|
Oncology
|
|
130,864
|
|
27,887
|
|
158,751
|
|
105,985
|
|
24,473
|
|
130,458
|
|
23
|
|
14
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Proprietary
|
|
4,726
|
|
1,804
|
|
6,530
|
|
2,883
|
|
1,754
|
|
4,637
|
|
64
|
|
3
|
|
41
|
|
|
Other Generic
|
|
4,536
|
|
87,400
|
|
91,936
|
|
3,058
|
|
90,368
|
|
93,426
|
|
48
|
|
(3)
|
|
(2)
|
|
|
Other
|
|
9,262
|
|
89,204
|
|
98,466
|
|
5,941
|
|
92,122
|
|
98,063
|
|
56
|
|
(3)
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
532,657
|
|
$ 197,443
|
|
$
730,100
|
|
$
525,977
|
|
$ 186,458
|
|
$
712,435
|
|
1%
|
|
6%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
%
|
|
|
|
June
30,
|
Increase
|
|
|
|
2011
|
|
2010
|
|
(Decrease)
|
|
|
|
United
States
|
|
Europe
|
|
Total
|
|
United
States
|
|
Europe
|
|
Total
|
|
United
States
|
|
Europe
|
|
Total
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CNS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary CNS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVIGIL
|
|
$
481,027
|
|
$ 28,515
|
|
$
509,542
|
|
$
513,151
|
|
$ 34,130
|
|
$
547,281
|
|
(6%)
|
|
(16%)
|
|
(7%)
|
|
|
NUVIGIL
|
|
110,608
|
|
-
|
|
110,608
|
|
75,890
|
|
-
|
|
75,890
|
|
46
|
|
-
|
|
46
|
|
|
GABITRIL
|
|
19,803
|
|
2,254
|
|
22,057
|
|
19,417
|
|
2,486
|
|
21,903
|
|
2
|
|
(9)
|
|
1
|
|
|
Other
Proprietary CNS
|
|
-
|
|
4,961
|
|
4,961
|
|
-
|
|
5,658
|
|
5,658
|
|
-
|
|
(12)
|
|
(12)
|
|
|
Generic CNS
|
|
-
|
|
19,765
|
|
19,765
|
|
-
|
|
10,885
|
|
10,885
|
|
-
|
|
82
|
|
82
|
|
|
CNS
|
|
611,438
|
|
55,495
|
|
666,933
|
|
608,458
|
|
53,159
|
|
661,617
|
|
0
|
|
4
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary
Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FENTORA
|
|
80,953
|
|
16,874
|
|
97,827
|
|
77,341
|
|
9,390
|
|
86,731
|
|
5
|
|
80
|
|
13
|
|
|
Other Proprietary
Pain
|
|
-
|
|
61
|
|
61
|
|
-
|
|
108
|
|
108
|
|
-
|
|
(44)
|
|
(44)
|
|
|
Generic Pain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACTIQ
|
|
30,093
|
|
28,056
|
|
58,149
|
|
29,411
|
|
32,558
|
|
61,969
|
|
2
|
|
(14)
|
|
(6)
|
|
|
Generic
OTFC
|
|
15,038
|
|
-
|
|
15,038
|
|
24,314
|
|
-
|
|
24,314
|
|
(38)
|
|
-
|
|
(38)
|
|
|
AMRIX
|
|
36,586
|
|
-
|
|
36,586
|
|
53,683
|
|
-
|
|
53,683
|
|
(32)
|
|
-
|
|
(32)
|
|
|
Generic
AMRIX
|
|
11,420
|
|
-
|
|
11,420
|
|
-
|
|
-
|
|
-
|
|
100
|
|
-
|
|
100
|
|
|
Other
Generic Pain
|
|
-
|
|
52,090
|
|
52,090
|
|
-
|
|
23,698
|
|
23,698
|
|
-
|
|
120
|
|
120
|
|
|
Pain
|
|
174,090
|
|
97,081
|
|
271,171
|
|
184,749
|
|
65,754
|
|
250,503
|
|
(6)
|
|
48
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proprietary
Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TREANDA
|
|
243,572
|
|
-
|
|
243,572
|
|
180,989
|
|
-
|
|
180,989
|
|
35
|
|
-
|
|
35
|
|
|
Other
Proprietary Oncology
|
|
10,520
|
|
41,433
|
|
51,953
|
|
10,808
|
|
38,960
|
|
49,768
|
|
(3)
|
|
6
|
|
4
|
|
|
Generic
Oncology
|
|
-
|
|
12,366
|
|
12,366
|
|
-
|
|
9,858
|
|
9,858
|
|
-
|
|
25
|
|
25
|
|
|
Oncology
|
|
254,092
|
|
53,799
|
|
307,891
|
|
191,797
|
|
48,818
|
|
240,615
|
|
32
|
|
10
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Proprietary
|
|
10,731
|
|
4,018
|
|
14,749
|
|
8,247
|
|
1,754
|
|
10,001
|
|
30
|
|
129
|
|
47
|
|
|
Other Generic
|
|
11,687
|
|
193,671
|
|
205,358
|
|
7,154
|
|
119,226
|
|
126,380
|
|
63
|
|
62
|
|
62
|
|
|
Other
|
|
22,418
|
|
197,689
|
|
220,107
|
|
15,401
|
|
120,980
|
|
136,381
|
|
46
|
|
63
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,062,038
|
|
$ 404,064
|
|
$ 1,466,102
|
|
$
1,000,405
|
|
$ 288,711
|
|
$ 1,289,116
|
|
6%
|
|
40%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEPHALON,
INC. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(In
thousands, except share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
997,476
|
|
$
1,160,239
|
|
|
Receivables,
net
|
486,519
|
|
431,333
|
|
|
Inventory, net
|
305,421
|
|
291,360
|
|
|
Deferred tax assets,
net
|
206,895
|
|
213,798
|
|
|
Other current
assets
|
98,272
|
|
54,845
|
|
|
Total
current assets
|
2,094,583
|
|
2,151,575
|
|
|
|
|
|
|
|
INVESTMENTS ($505,800 and
$155,808 at fair value in 2011 and 2010, respectively)
|
528,067
|
|
168,494
|
|
|
PROPERTY AND EQUIPMENT,
net
|
507,152
|
|
502,856
|
|
|
GOODWILL
|
866,272
|
|
822,071
|
|
|
INTANGIBLE ASSETS,
net
|
1,724,246
|
|
1,212,387
|
|
|
DEBT ISSUANCE
COSTS
|
11,829
|
|
14,196
|
|
|
OTHER ASSETS
|
20,937
|
|
20,254
|
|
|
$ 5,753,086
|
|
$
4,891,833
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
Current portion of
long-term debt, net
|
$
672,102
|
|
$
651,997
|
|
|
Accounts
payable
|
120,128
|
|
104,477
|
|
|
Accrued
expenses
|
479,080
|
|
460,141
|
|
|
Total
current liabilities
|
1,271,310
|
|
1,216,615
|
|
|
|
|
|
|
|
LONG-TERM DEBT
|
405,985
|
|
391,416
|
|
|
DEFERRED TAX LIABILITIES,
net
|
237,487
|
|
172,589
|
|
|
OTHER
LIABILITIES
|
303,366
|
|
273,438
|
|
|
Total
liabilities
|
2,218,148
|
|
2,054,058
|
|
|
|
|
|
|
|
REDEEMABLE EQUITY
|
153,600
|
|
170,183
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
Cephalon Stockholders'
Equity
|
|
|
|
|
|
Common stock, $0.01 par
value
|
813
|
|
791
|
|
|
Additional paid-in
capital
|
2,633,913
|
|
2,428,450
|
|
|
Treasury stock, at
cost
|
(225,881)
|
|
(225,870)
|
|
|
Accumulated
earnings
|
576,349
|
|
247,086
|
|
|
Accumulated other
comprehensive income
|
316,649
|
|
182,975
|
|
|
Total
Cephalon stockholders' equity
|
3,301,843
|
|
2,633,432
|
|
|
Noncontrolling
Interest
|
79,495
|
|
34,160
|
|
|
Total
equity
|
3,381,338
|
|
2,667,592
|
|
|
$ 5,753,086
|
|
$
4,891,833
|
|
|
|
|
|
|
CEPHALON,
INC. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net
income
|
$ 326,802
|
|
$ 192,730
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Deferred income tax expense (benefit)
|
52,156
|
|
(18,059)
|
|
|
Shortfall tax benefits from stock-based
compensation
|
(331)
|
|
(559)
|
|
|
Depreciation and amortization
|
93,389
|
|
106,724
|
|
|
Stock-based compensation expense
|
16,950
|
|
21,630
|
|
|
Amortization of debt discount and debt issuance
costs
|
32,776
|
|
35,692
|
|
|
Changes in fair value of investments
|
(264,208)
|
|
-
|
|
|
Loss (gain) on foreign exchange contracts
|
(5,089)
|
|
9,499
|
|
|
Impairment and loss (gain) on sale of fixed
assets
|
54,056
|
|
-
|
|
|
Other
|
23,090
|
|
3,752
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Receivables
|
(37,532)
|
|
(25,581)
|
|
|
Inventory
|
5,646
|
|
18,985
|
|
|
Other assets
|
1,207
|
|
9,474
|
|
|
Accounts payable, accrued expenses and
deferred revenues
|
(11,445)
|
|
23,955
|
|
|
Other liabilities
|
(65,462)
|
|
(189)
|
|
|
Net cash provided by operating
activities
|
222,005
|
|
378,053
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
Purchases of
property and equipment
|
(28,049)
|
|
(22,997)
|
|
|
Proceeds from sale
of property and equipment
|
818
|
|
-
|
|
|
Cash balance from
consolidation of variable interest entity
|
15,513
|
|
-
|
|
|
Acquisition of
Mepha net of cash acquired
|
|
|
(549,463)
|
|
|
Acquisition of
Gemin X, net of cash acquired
|
(184,198)
|
|
|
|
|
Acquisition of
ChemGenex, net of cash acquired
|
(179,931)
|
|
|
|
|
Purchases of
investments
|
(135,453)
|
|
(60)
|
|
|
(Cash settlements
of) proceeds from foreign exchange contracts
|
7,111
|
|
(9,499)
|
|
|
Net cash used for investing
activities
|
(504,189)
|
|
(582,019)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
Proceeds from sale
of common stock
|
349
|
|
-
|
|
|
Proceeds from
exercises of common stock options
|
133,703
|
|
14,370
|
|
|
Windfall tax
benefits from stock-based compensation
|
12,060
|
|
-
|
|
|
Acquisition of
Ception non-controlling interest
|
-
|
|
(299,289)
|
|
|
Acquisition of
ChemGenex Ltd. non-controlling interest
|
(6,602)
|
|
|
|
|
Acquisition of
treasury stock
|
-
|
|
(33)
|
|
|
Payments on and
retirements of long-term debt
|
(35,763)
|
|
(221,478)
|
|
|
Net cash provided by (used for) financing
activities
|
103,747
|
|
(506,430)
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
|
15,674
|
|
(9,793)
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS
|
(162,763)
|
|
(720,189)
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
1,160,239
|
|
1,647,635
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END
OF PERIOD
|
$ 997,476
|
|
$ 927,446
|
|
|
|
|
|
SOURCE Cephalon, Inc.