Cephalon Inc. Sees Year Revs 'Substantially' Lower Than '95
WASHINGTON (Dow Jones)--Cephalon Inc. (CEPH) expects 1996 revenues to be ''substantially less'' than in 1995 because of a reduction in revenues from its collaboration with Chiron Corp. (CHIR) and partnership with Cephalon Clinical Partners L.P.
For the year ended Dec. 31, 1995, Cephalon had $47 million in revenues.
According to Federal Filings Business News, under the collaboration and partnership agreements, Cephalon has been reimbursed for 110% of expenses incurred in development of Myotrophin by both ventures, which it accounts for as revenue.
But because Cephalon depleted all of the partnership funds as of late last year, the company will be reimbursed by the partnership at a lower rate, 100% of research and development costs, when Cephalon Clinical has the available funds. Chiron will also reimburse Cephalon at the lower rate under the collaboration agreement.
Chiron and Cephalon are collaborating to develop Myotrophin, to be used in treatment of Lou Gehrig's disease. In connection with the pact, Chiron supplied Cephalon with a revolving credit facility to enable it to pay for its collaboration-related expenses. For the first three months of 1996, Cephalon received $944,000 as reimbursement.
Under the partnership agreement between Cephalon Clinical and Cephalon, Cephalon Clinical obtained an exclusive license in the U.S., Canada and Europe for certain ''technology,'' including Myotrophin, in exchange for $500,000 and reimbursement of expenses.
In addition, Cephalon Clinical will pay Cephalon up to $16 million in milestone and royalty payments, pending Food and Drug Administration approval of Myotrophin.
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