West Coast Editor

Cephalon Inc.'s proof from a Phase III trial sponsored by the National Cancer Institute that the approved leukemia drug Trisenox (arsenic trioxide) works as first-line therapy against a subtype of acute myelogenous disease should widen the market, but not by much, given the rarity of the condition.

Wall Street took the news in stride. The company's stock (NASDAQ:CEPH) closed Thursday at $73.99, down 15 cents.

"Whenever you can see a contribution in terms of increasing survival benefit, it's fantastic," said Jenifer Antonacci, spokeswoman for Frazer, Pa.-based Cephalon. Smaller, single-arm studies have tested Trisenox as a therapy, but "there's never been anything quite like this before," she told BioWorld Today. She called the latest study "potentially more persuasive" than earlier ones.

Investors apparently are putting more of their chips on Cephalon's strong-selling Provigil (modafinil) for narcolepsy and the October-launched Fentora (fentanyl) for breakthrough cancer pain in opioid-tolerant patients.

Analyst Bret Holley of CIBC World Markets in New York said Cephalon is poised for a strong 2007. Sales of Provigil and Nuvigil sales could reach nearly $900 million, a 21 percent jump over 2006. Cephalon is waiting for FDA approval of Nuvigil (armodafinil), a single-isomer formulation of modafinil to improve wakefulness in particularly difficult patients suffering from excessive sleepiness associated with narcolepsy, shift-work sleep disorder and obstructive sleep apnea/hypopnea syndrome.

Meanwhile, Provigil, co-promoted with Lincolnshire, Ill.-based Takeda Pharmaceuticals North America Inc., has generated almost 10 million prescriptions and more than $2 billion in cumulative revenue since its 1999 launch. "Furthermore, we believe Fentora will be a solid source of revenue growth for Cephalon," wrote Holley in a research report, despite the fact that Actiq faces generic competition.

But the latest news is about Trisenox, acquired from Seattle-based Cell Therapeutics Inc. in a deal worth up to $170 million. Cleared by the FDA for patients with acute promyelocytic leukemia (APL) whose disease has come back or not responded to initial treatment, the compound helped those in a first-line setting against the illness, which is characterized by the presence of the t(15;17) translocation of PML/RAR-alpha gene expression. (See BioWorld Today, June 14, 2005.)

The NCI and one of its trials groups, the Cancer and Leukemia Group B (CALGB), randomized 582 patients to get standard chemotherapy with or without the Trisenox maintenance regimen. Event-free survival at three years hit 77 percent in the Trisenox arm compared to 59 percent in patients who got only chemo.

CALGB said the result hit statistical significance and improved three-year survival, reaching 86 percent for the Trisenox arm as compared to 77 percent for chemo. Full results are expected at the June annual meeting of the American Society of Clinical Oncology.

About 1,500 APL patients are afflicted per year, with about 70 percent responding to the first round of treatment, but only 35 percent to 45 percent of patients are still disease-free after five years.

Cephalon also sells Actiq, the fentanyl lozenge for cancer breakthrough pain, though Fentora is catching on much more quickly than Actiq did, noted Frank Baldino, the company's chairman and CEO in a conference call on third-quarter earnings.

"It took almost two years for Actiq to reach the current Fentora run rate," he said. "Peak Actiq prescriptions were 9,000 per week. In the third week of Fentora launch, we've already exceeded 1,100 prescriptions."

Along with Trisenox in the cancer space, Cephalon has Treanda (bendamustine), a bi-functional cytotoxic in Phase III development for chronic lymphocytic leukemia and non-Hodgkin's lymphoma, and CEP-701 (lestaurtinib), an oral small molecule inhibitor of tyrosine kinases including FLT-3, TRK and JAK-2, in Phase III trials for acute myeloid leukemia.

Baldino noted in the conference call that partner Takeda's efforts with Provigil are starting to pay off. This month, the firm will dedicate 250 sales representatives who will detail Provigil in the first position, bringing the total number of sales persons selling the compound to almost 1,200. Also this month, Cephalon won U.S. Patent No. 7,132,570, which covers a polymorphic form of Nuvigil's active ingredient.

With Alkermes Inc., of Cambridge, Mass., Cephalon in June launched Vivitrol (naltrexone), its' treatment for alcohol dependence in the U.S., cleared in the spring for patients who are able to abstain from drinking in an outpatient setting and are not actively drinking when initiating treatment.

Holley, in his research report, downplayed the risk of a possible investigation by the Federal Trade Commission of agreements made last year by Cephalon with the generic-drug firms Barr Laboratories Inc., of Woodcliff Lake, N.J. (for Provigil and Actiq) and Mylan Pharmaceuticals Inc., of Morgantown, W. Va. (for Provigil).

"Cephalon would ultimately prevail in the courts, and we would buy into weakness if the FTC proceeds," Holley wrote, calling for investors to "look beyond 2007, a likely transition year for Cephalon, and focus on the company's longer-term growth potential."