Drug maker Cephalon, Inc. (CEPH), Tuesday reported a 5% increase in second quarter profit help primarily by strong sales of its sleep disorder drugs Provigil and Nuvigil, and cancer drug Treanda. Cephalon said it expects to record third quarter earnings above estimates, and lifted its annual outlook from the prior level.
Net income attributable to Cephalon increased 5.07% to $89.06 million or $1.11 per share from $84.76 million or $1.11 per share in the same quarter a year ago. But when compared to the sequential first quarter, earnings for the quarter were down 19.45%.
After adjusting for amortization expense and certain other items, net income attributable to Cephalon was $2.05 per share, compared to $1.44 per share in the prior year quarter.
On average, 20 analysts' polled by Thomson Reuters expected earnings of $1.77 per share for the quarter. Analysts' estimate typically excludes one-time items.
Cephalon's net sales for the second quarter increased 32% to $712.44 million from $539.02 million in the same quarter a year ago. Street analysts' expected sales of $693.94 million for the quarter.
Sales of Provigil increased 9% to $284.83 million, Nuvigil jumped 144% to $40.97 million, and Gabitril increased 3% to $12.14 million. Central nervous system franchise sales rose 16% to $337.9 million during the quarter, and Pain franchise sales increased 8% to $113.1 million. Helped by strong sales of Treanda, sales of Oncology franchise jumped 58% to $129.9 million, while other product sales surged 208% to $131.4 million due mainly to the expansion of European business.
Costs and expenses for the quarter was $535.05 million, compared to $441.76 million in the year-earlier quarter. Income from operations jumped to $191.86 million from $106.05 million in the prior-year quarter.
Amongst others in the industry, drug maker GlaxoSmithKline plc. (GSK,GSK.L) in its second quarter, reported a loss , compared to a profit last year, hurt mainly by higher legal charges, as well as expenses related to sales force reorganizations and R&D site exits.
Looking ahead to the third quarter, Cephalon said it expects adjusted net income in a range of $135.9 - $143.5 million or $1.80 - $1.90 per share, while Street analysts' currently expect earnings of $1.76 per share.
Sales for the third quarter are expected to range between $670 million and $700 million. Analysts' currently expect sales of $712.37 million for the quarter.
For the full year 2010, the company said it now expects adjusted net income in a range of $562 million - $577 million or $7.45-$7.65 per share, while Street analysts' expect earnings of $6.92 per share.
Earlier this month, Cephalon suspended its previously issued full-year 2010 financial guidance, which called for adjusted net income of $530 million - $545 million or $7.00 - $7.20 per share and sales between $2.61 billion and $2.69 billion.
Total sales for the year is now expected to be in a range of $2.63 billion - $2.71 billion, while analysts' currently expects sales of $2.73 billion.
On June 9, 2010, brokerage Caris and Co initiated an 'Average' rating on company shares, with a mean target of $76.06.
CEPH closed Tuesday's regular trading at $62.90, up $2.07 or 3.40%, on a volume of 2.68 million shares. In after-hours, the stock dropped $1.48 or 2.35%, to trade at $61.30. In the last 52-week period, the stock traded in a range of $53.05 - $72.87, with a three-month average volume of 1.87 million shares.
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