I continue to be impressed with the performance of not-so-small drug company Cephalon
Its drugs Provigil and Actiq are the engines driving this growth. Provigil is used to improve wakefulness in a number of conditions, while Actiq is employed for the treatment of pain in cancer patients. Despite their success, there is a very real risk that sales will sputter to a stop. A number of generic companies, including Mylan Labs
Meanwhile, Cephalon is not standing idly by while its products face potential demise. It hopes to launch NUVIGIL, a follow-up product to protect the Provigil franchise, by early 2006. The only problem is that this merely appears to delay the inevitable: NUVIGIL's composition of matter patents expire in 2007, though the company would have marketing exclusivity through 2008.
Given the threat to the product line, the acquisition of CIMA labs in August of this year could turn out to be quite important. From this purchase, Cephalon picked up OraVescent fentanyl, which is in development for cancer pain and could launch by late 2006. If the company is successful in developing this drug for other pain markets, it could turn out to be a big winner that would take the sting out of potential revenue losses in other areas.
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For more articles by Charly on the biotech industry, see:
- Biotech's 5-Baggers: Part 3
- Biotech's 5-Baggers: Part 2
- Biotech's 5-Baggers: Part 1
- The Case for Drug Stocks
- Surviving Biotech's Downturns
Fool contributor Charly Travers owns no shares of companies mentioned in this article.