[LOGO] CEPHALON CONTACT:
Robert W. Grupp
USA +1-610-738-6402
rgrupp@cephalon.com
GROUP LAFON CONTACT:
Patrick Pelat
France 33-6-84-99-47-82
ppelat@lablafon.com
FOR IMMEDIATE RELEASE
Cephalon, Inc. Plans To Acquire France's Group Lafon
AGREEMENT WILL ADD EARNINGS AND REVENUE FROM EUROPE IN 2002 FOR CEPHALON
WEST CHESTER, PA -- DECEMBER 3, 2001 -- The American biopharmaceutical
company Cephalon, Inc. (Nasdaq: CEPH) and the French pharmaceutical company
Group Lafon today announced an agreement under which Cephalon will acquire Lafon
- -- including its commercial, R&D and manufacturing operations. With this
acquisition, Cephalon will control worldwide rights to its flagship product
PROVIGIL(R) (modafinil) Tablets [C-IV].
At the close of the transaction Cephalon will achieve another major
milestone in its growth strategy. The acquisition will increase product sales
for Cephalon, significantly improve gross margins for PROVIGIL by eliminating
payments to Lafon, improve profitability and provide Cephalon with an important
research, commercial and manufacturing infrastructure in France.
Cephalon also will acquire the entire portfolio of Lafon products sold in
France, which will generate an estimated $80 million in additional revenue for
Cephalon next year. The products include MODIODAL(R) (the brand name for
modafinil sold in France), SPASFON(R) (phloroglucinol), an antispasmodic drug,
FONZYLANE(R) (buflomedil), used to treat cardiovascular disorders, OLMIFON(R)
(adrafinil), a central nervous system stimulant and antidepressant, and ten
other products. Through Lafon, Cephalon plans to launch ACTIQ (oral transmucosal
fentanyl citrate) [CII] in France in 2002. Also, Cephalon acquires Lafon's
manufacturing facilities in Mitry-Mory where the active drug substance found in
PROVIGIL is produced.
The agreement calls for Cephalon to acquire Lafon for $450 million in cash.
Cephalon has cash and a credit commitment from a major investment bank that will
enable it to complete the transaction. Closing is expected to occur by the end
of the year. The company anticipates taking a one-time charge in the quarter
ending December 31, 2001, for the cost of acquired in-process R&D associated
with the acquisition. Lafon will operate as a wholly-owned subsidiary of
Cephalon.
Cephalon expects that the acquisition of Lafon will improve its results of
operations for 2002 by adding approximately $80 million in product sales, $20
million in EBITDA, and $0.03 in earnings per share. As a result, Cephalon is
raising its guidance for financial performance in 2002. For the year ending
December 31, 2002, Cephalon expects that revenues from the sale of products will
increase to approximately $400 to $410 million generating EBITDA of
approximately $100 million for 2002 and diluted earnings of approximately $1.03
per share.
The agreement opens up new growth opportunities for both companies, which
have been partners since 1993 when Lafon first licensed to Cephalon the rights
to develop and commercialize PROVIGIL in the United States. By joining the
international marketing organization built by Cephalon, Lafon can accelerate the
growth of its business in France, potentially increase sales and production of
PROVIGIL/MODIODAL and other products and participate in the development of new
markets across Europe.
CEOs for both companies describe the transaction as a friendly acquisition
between long-time partners.
"Cephalon's strategy is to grow product sales in the United States and
Europe and become a fully-integrated, pharmaceutical company, and this
acquisition will help us meet our objectives," said Frank Baldino Jr., Ph.D.,
Chairman of the Board and CEO of Cephalon. "Lafon provides Cephalon with strong
roots in France and a core business that can strengthen our position in Europe.
Acquiring Lafon will be accretive to earnings and provides an excellent
strategic fit for our company."
Francois Lafon, President and Directeur General of Lafon, said: "Long-term
success in the French pharmaceutical market requires continuous innovation,
acquiring superior knowledge, and expanding marketing resources. Cephalon is
clearly the best partner for us as we work to achieve our goal of building the
business. Our relationship with Cephalon is a long and positive one, and
Cephalon's ambitions for France and Europe give our people exciting
opportunities for the future."
The companies will be integrated in a process that favors mutual respect
for the employees of Lafon. Cephalon plans to maintain Lafon headquarters and
its R&D center in Maisons Alfort outside of Paris, and its manufacturing plants
in Mitry-Mory and Nevers. The company will continue to market its products in
France under the name Laboratoire Lafon.
PROVIGIL (USA)/MODIODAL (FRANCE)
PROVIGIL (or MODIODAL as it is known in France) is a unique, wake-promoting
agent launched in the United States in February 1999. The American Academy of
Sleep Medicine regards PROVIGIL as a standard for the treatment of EDS
associated with narcolepsy. In controlled clinical trials, PROVIGIL has been
found to be generally well tolerated with a low incidence of adverse events
relative to placebo. The most commonly observed adverse events associated with
the use of PROVIGIL were headache, infection, nausea, nervousness, anxiety and
insomnia.
CEPHALON, INC.
Cephalon, Inc., headquartered in West Chester, Pennsylvania, is an
international biopharmaceutical company that discovers, develops and markets
products to treat neurological and sleep disorders, cancer and pain. The company
currently markets its three proprietary products in the United States and nine
products internationally. Cephalon develops innovative products for the
treatment of neurological diseases and cancer through identification of novel
compounds that affect both cell survival and death. Additional information about
Cephalon can be obtained by visiting the company's website at
HTTP://WWW.CEPHALON.COM.
GROUP LAFON
Group Lafon is a family-owned French pharmaceutical laboratory that was
created in 1951 by Louis Lafon. Since its creation, Lafon has developed and
marketed a diverse portfolio of products and acquired undisputed knowledge in
central nervous system disorders, the digestive system and human metabolism.
Laboratoire Lafon headquarters are located in Maisons-Alfort, France. Today
Group Lafon employs about 500 people and markets 14 products in France.
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 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, SALES AND EARNINGS
PROJECTIONS, 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 SUCH AS THOSE SET FORTH BELOW
AND 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 (AND IT IS NOT OBLIGATED) TO UPDATE PUBLICLY ANY FORWARD-LOOKING
STATEMENTS. THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PERMITS THIS
DISCUSSION.
NOTE: A CONFERENCE CALL IN WHICH CEPHALON SENIOR MANAGEMENT WILL DISCUSS THE
AGREEMENT FOR CEPHALON TO ACQUIRE LAFON IS SCHEDULED FOR 8:30 A.M. U.S. EASTERN
STANDARD TIME (EST) OR 2:30 P.M. CENTRAL EUROPEAN TIME (CMT) TODAY, MONDAY,
DECEMBER 3, 2001. TO ACCESS THE CONFERENCE CALL, DIAL +1-719-457-2728 AND REFER
TO CONFERENCE CALL NUMBER 636319.
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