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CEPHALON/ALKERMES SIGN PACT TO DEVELOP VIVITREX.

Cephalon, Inc. (Nasdaq: CEPH) and Alkermes, Inc. (Nasdaq: ALKS) have entered into an agreement to develop and commercialize Vivitrex (naltrexone long-acting injection) in the United States. Vivitrex is an investigational drug in development by Alkermes for the treatment of alcohol dependence. Alkermes submitted a New Drug Application (NDA) for Vivitrex to the U.S. Food and Drug Administration (FDA) on March 31, 2005, which has been granted priority review.

Under the terms of the agreement, Cephalon will make an initial payment of $160 million cash to Alkermes and an additional $110 million cash payment if Vivitrex is approved by the FDA. Alkermes could receive up to an additional $220 million in milestone payments that are contingent on attainment of certain agreed-upon sales levels of Vivitrex.

In creating and building new markets for PROVIGIL, we have established a proven track record of launching and growing innovative products," said Frank Baldino, Jr., Ph.D., chairman and CEO of Cephalon. "We believe the characteristics of the alcohol dependence market parallel those we encountered when we first launched PROVIGIL to treat excessive sleepiness. We are pleased to add Vivitrex to our growing portfolio of products and look forward to a very successful partnership with Alkermes."

"We believe Cephalon brings the commercial capabilities and infrastructure required for a successful product launch, and we look forward to a productive partnership," said Richard Pops, CEO of Alkermes. "In addition, this agreement highlights the value of our Vivitrex development program and fulfills an important business objective for Alkermes." Cephalon and Alkermes will form a joint commercialization team and will share responsibility for developing the commercial strategy for Vivitrex. Cephalon will have primary responsibility for the marketing and sale of Vivitrex, and Alkermes will augment this effort with a team of treatment system specialists. Alkermes also will be responsible for obtaining marketing approval for Vivitrex for the treatment of alcohol dependence and for manufacturing the product.

Cephalon will record net sales from Vivitrex in the United States. Alkermes will be responsible for certain development and registration costs, up to product approval. Alkermes is responsible for any cumulative losses up to $120 million until the later of December 31, 2007, or 18 months after FDA approval of the product. During this time period, cumulative losses exceeding $120 million will be borne by Cephalon. After this time period, any pre-tax profit or loss will be shared equally by the companies.

About Alcohol Dependence

In the United States, approximately 18 million people are dependent on or abuse alcohol and an estimated 2.3 million adults seek treatment each year. Even among individuals currently seeking treatment, the majority relapse. Taking prescribed medication, an important determinant in therapeutic outcomes, is particularly challenging for patients with addictive disorders such as alcohol dependence. Alcohol is causally related to more than 60 medical conditions, including heart disease, liver disease, infectious disease, and cancer, and contributes to more than 100,000 deaths in the U.S. each year. In addition, alcohol abuse and dependence accounts for approximately $134 billion in lost earnings annually.

About Vivitrex

Vivitrex is a long-acting, injectable form of naltrexone that is under development as a once-monthly treatment regimen utilizing Alkermes' proprietary Medisorb drug-delivery technology. Naltrexone is a non-addictive, non-aversive agent that binds to opioid receptors in the brain. In people with alcohol dependence, it is believed that this blockade diminishes craving for alcohol and leads to a greater ability to resist urges to drink excessively. The Vivitrex clinical development program has been funded in part with a Small Business Innovation Research Program grant from the National Institute on Alcohol Abuse and Alcoholism (NIAAA).

About Cephalon, Inc.

Founded in 1987, Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and marketing of innovative products to treat sleep and neurological disorders, cancer and pain.

Cephalon currently employs more than 2,300 people in the United States and Europe. U.S. sites include corporate headquarters in Frazer, Pennsylvania, and offices, research and development or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota. Cephalon's major European offices are located in Guildford, England, Martinsried, Germany, and in Maisons-Alfort, France.

The company currently markets three proprietary products in the United States: PROVIGIL (modafinil) Tablets [C-IV], GABITRIL (tiagabine hydrochloride) and ACTIQ (oral transmucosal fentanyl citrate) [C-II] , and more than 20 products internationally.

For more information, visit http://www.cephalon.com or call 800/896-5855.

About Alkermes, Inc.

Alkermes, Inc. is a pharmaceutical company that develops products based on sophisticated drug delivery technologies to enhance therapeutic outcomes in major diseases. The company's lead commercial product, Risperdal Consta [(risperidone) long- acting injection], is the first and only long-acting atypical antipsychotic medication approved for use in schizophrenia, and is marketed worldwide by Janssen-Cilag (Janssen), a wholly owned subsidiary of Johnson & Johnson. The company's lead proprietary product candidate, Vivitrex (naltrexone long- acting injection), is being developed as a once-monthly injection for the treatment of alcohol dependence. The company has a pipeline of extended-release injectable products and pulmonary drug products based on its proprietary technology and expertise. Alkermes' product development strategy is twofold: the company partners its proprietary technology systems and drug delivery expertise with several of the world's finest pharmaceutical companies and it also develops novel, proprietary drug candidates for its own account. The Company's headquarters are in Cambridge, Massachusetts, and it operates research and manufacturing facilities in Massachusetts and Ohio.

For more information, call 617/680-1088.
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Publication:Biotech Business
Geographic Code:1USA
Date:Aug 1, 2005
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