May 3, 2011 / 8:45 PM / 6 years ago

UPDATE 2-Cephalon profit misses, company likes Teva deal

* Q1 adjusted EPS $1.98 vs Street view $2.04

* Revenue $745.1 million

* Says Teva offer provides maximum shareholder value (Adds CEO comment on forecast, sales details)

NEW YORK, May 3 (Reuters) - Cephalon Inc CEPH.O, which agreed this week to be bought by Teva Pharmaceutical Industries Ltd (TEVA.TA) for $6.8 billion, reported lower-than-expected first-quarter earnings as costs jumped 37 percent and revenue fell short of Wall Street estimates.

Cephalon had resisted an unsolicited takeover bid by Canada-based Valeant Pharmaceuticals International Inc (VRX.TO) when Israel-based Teva swooped in with its higher offer.

“After analyzing a full range of strategic options, our board concluded that the Teva offer provides the maximum shareholder value for Cephalon shareholders,” Chief Executive Kevin Buchi said in a statement.

Buchi expects Cephalon will be able to meet or exceed its previous full year forecast, which called for adjusted earnings of $8.70 to $9.00 per share and sales of $3.01 billion to $3.09 billion. However, after agreeing to be acquired by Teva, he said the company will no longer be providing a 2011 outlook.

The acquisition is expected to close in the third quarter.

The Pennsylvania-based specialty pharmaceutical company reported a net profit of $211.1 million, or $2.64 per share, compared with a profit of $100.3 million, or $1.35 per share, a year ago.

Excluding items, Cephalon had adjusted earnings of $1.98 per share, missing analysts’ average expectations by 6 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 25 percent to $745.1 million, but fell short of Wall Street estimates of $751 million.

Costs and expenses rose 37 percent to $569.3 million.

Sales of Cephalon’s flagship sleep disorder drug, Provigil, declined 2 percent to $258.4 million for the quarter.

The newer sleep disorder drug Nuvigil saw sales rise 49 percent to $52 million. The company is hoping to switch as many patients as possible over to Nuvigil before Provigil begins to face competition from cheaper generic versions next year.

The cancer drug Treanda continued its strong launch with sales rising 45 percent to $117.7 million. (Reporting by Bill Berkrot; editing by Robert MacMillan and Andre Grenon)

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