Cephalon Inc. said Monday that it has licensed fromLaboratoire L. Lafon of Paris exclusive rights to develop,market and sell modafinil in the U.S. and Mexico.

Cephalon (NASDAQ:CEPH) of West Chester, Pa., sought licensingrights to the French pharmaceutical company's narcolepsytreatment to expand potential products it could market toneurologists, company representatives said Monday.

Cephalon is also developing Myotrophin (recombinant humaninsulin-like growth factor or IGF-1), which is in Phase II trialsto test its use in amyotrophic lateral sclerosis (Lou Gehrig'sdisease). If approved, both compounds could be offered to thesame group of clinicians.

Lafon is a research-based ethical pharmaceutical company inParis that focuses on central nervous system andcardiovascular therapies. Modafinil received regulatoryapproval for narcolepsy in France last February. Lafon willbegin sales in France upon pricing and reimbursementapproval.

Acting selectively on the alpha adrenergic system in the brain,modafinil was shown in a four-year series of European studiesof more than 1,000 patients to significantly reduce daytimesleep attacks and drowsiness while showing no adverse sideeffects.

There is currently no cure for narcolepsy, the uncontrollablepropensity to fall asleep during the day. Amphetamine-typestimulants can treat the symptoms, but are often addictive andmay have other side effects, such as contributing tohypertension.

This debilitating, life-long sleep disorder is estimated to affectmore than 125,000 Americans.

Lafon holds a U.S. patent on its compound and is receiving apayment this quarter from Cephalon under the licensingagreement. Cephalon also agreed to purchase modafinilsupplies from Lafon and fund the compound's clinicaldevelopment in the U.S. and Mexico. The agreement alsoprovides for royalty and other payments to Lafon.

"The acquisition of marketing rights for modafinil fits withinthe company's strategic objective to license in productopportunities directed toward neurologists," said Frank BaldinoJr., Cephalon's president and chief executive officer.

The company hopes to submit an investigational new drug(IND) application in six to nine months, said spokeswoman LynHyduke, and may be able to begin Phase III clinical trials bythe end of this year.

Cephalon's stock closed unchanged Monday at $12 a share.

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