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Q3 2008

FRANK BALDINO, JR., PH.D.
Chairman/CEO

Three quarters of the year are behind us and we are on-track to accomplish the goals we set for this year.  In fact, we have performed so well thus far this year that we increased our financial guidance for the third time this year. (click here for the 3Q 08 press release)

At the end of October, just a few months after we received FDA approval for and launched TREANDA® (bendamustine hydrochloride) for Injection for the treatment of patients with chronic lymphocytic leukemia (CLL), we received a second FDA approval for the treatment of patients with indolent non-Hodgkin’s lymphoma (NHL) who have progressed during or within six months of treatment with rituximab or a rituximab-containing regimen.   We are very pleased to receive two FDA approvals for TREANDA in one year.  (click here for the TREANDA NHL approval release)

This latest FDA approval for TREANDA is significant because this treatment is now available to help thousands of patients battling NHL.  In addition to TREANDA, we have created a multi-faceted oncology pipeline that should provide us with multiple opportunities for growth in the years ahead, as well as help us meet the critical needs of patients diagnosed with many other forms of cancer.

Every month, more and more patients are being treated with our convenient, once-daily, extended-release skeletal muscle relaxant AMRIX® (cyclobenzaprine hydrochloride extended-release capsules).  The market for skeletal muscle relaxants is large with ample space for growth of an exciting product like AMRIX.

We believe TREANDA and AMRIX will be two drivers for future growth for our company.  TREANDA and AMRIX helped Cephalon deliver double-digit growth of both sales and adjusted net income in the third quarter 2008 compared to third quarter 2007.  Sales for the third quarter of 2008 reached $490 million, at the high end of our guidance range and basic adjusted income per common share was $1.36, which exceeded the high end of our guidance.   

Based on the solid income and cash generation inherent in our business and our business strategy, we believe Cephalon is favorably positioned in today’s market --  distinguishing us from many other publicly traded companies. With our focus on the patients who can benefit from our medicines, we believe we will continue our growth in 2009.

Q2 2008

FRANK BALDINO, JR., PH.D.
Chairman/CEO

We achieved a significant milestone this spring when Cephalon won FDA approval for and launched TREANDA® (bendamustine hydrochloride) for Injection for the treatment of chronic lymphocytic leukemia (CLL), a form of blood cancer diagnosed in more than 15,000 Americans adults each year.   

Early anecdotal feedback from the medical community confirms both the medical need for TREANDA and the difference it is making in the lives of patients with CLL.  One physician shared with us a story about one of his patients, who, after more than a decade of treatment, was no longer responding to chemotherapy and transplant efforts.  They had run out of options. But then the story changed.  The patient started on TREANDA and the response to treatment has been extraordinary.

Stories like this remind me of the reason I started this company 21 years ago. I am proud of the work we do to develop medications that provide substantial value to both physicians and patients.  We are continuing to study this medicine in other types of cancer in hopes of unlocking its ability to help more patients.  And, later this year, we expect to hear from the FDA regarding our TREANDA new drug application for the treatment of patients with non-Hodgkin's lymphoma (NHL). 

We also achieved a significant in June with AMRIX® (cyclobenzaprine hydrochloride extended-release capsules), our once-daily, extended-release skeletal muscle relaxant.  The U.S. Patent & Trademark Office has issued a formulation patent for AMRIX, which provides us with the opportunity for exclusivity through 2025.  We launched AMRIX last year and it has been very well-received by the healthcare community.  Sales to date are strong, indicating that more patients suffering from muscle spasm associated with acute, musculoskeletal conditions are benefitting from the once-daily, extended-release formulation. 

These two milestones helped to spur double-digit growth of sales and adjusted net income, both well above the high end of our guidance range in Q2 of this year, compared with Q2, 2007. Our Q2 earnings are noteworthy for a biopharmaceutical company in the current economic and regulatory environment.  But more importantly, strong earnings allow us to continue to invest in the research and development of our compounds and products.  In 2007 we invested 21 percent of our sales revenue in research and development. I never tire of hearing how our medicines change people's lives.  There are many more stories we hope to be part of.

Q2 2008

FRANK BALDINO, JR., PH.D.
Chairman/CEO

Welcome and thanks for visiting us at Cephalon.com. Two thousand and eight is off to a great start with the recent FDA approval and subsequent launch of TREANDA®, a novel therapy for chronic lymphocytic leukemia (CLL). CLL is the most common type of leukemia, yet it is a rare or orphan disease affecting 15,000 individuals annually. Over the last 20 years, we have received an orphan drug designation for four of our products. We are proud of our legacy and of our ability to bring new treatments to patients with rare and often life-threatening diseases.

It is that legacy that supports our strategic focus on blood cancers and oncology. In fact, we have a diverse pipeline of early and late-stage oncology compounds. Later this year, we will learn if the U.S. Food and Drug Administration (FDA) will permit us to market TREANDA for Non-Hodgkins Lymphoma. We also anticipate completing our studies of CEP-701 in acute myeloid leukemia later this year. We have a strong history of bringing first in class products to market that offer new or added benefits to patients and 2008 will offer additional opportunities for us to innovate.

Our continued growth as a leading biopharmaceutical company is driven by our nearly 3,000 employees, including 500 researchers, who demonstrate each day their unwavering commitment to our living legacy: the millions of patients around the world who benefit from our medicines.

I hope that you will spend some time on our site learning more about Cephalon and that you will check in from time to time on our progress and performance this year.