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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (7886)	2/20/2003 10:37:38 AM
From: RMP	Respond to of 52153

8:25AM Cephalon downgraded at Lehman (CEPH) 51.70: Lehman downgrades to Equal-Weight from Overweight to reflect increased commercial risk facing their lead product Provigil following disappointing Q4 sales results and less than reassuring guidance for Q1; cuts price target to $55 from $60. From the street.com thestreet.com Tax-related gains and higher sales of a drug used to fight sleepiness propelled Cephalon (CEPH:Nasdaq - news - commentary - research - analysis) to a fourth-quarter profit, the company reported Wednesday. But the company slashed its guidance for earnings in the current quarter from 31 cents a share to 20 cents, apparently a result of spending on sales and marketing that was much higher than forecasted. The West Chester, Pa., drugmaker posted a profit of $140 million, or $2.46 a share, which includes a one-time gain of $116.7 million. In the same quarter last year, the company posted a loss of $65.5 million, or $1.23 a share, which included one-time acquisition charges. Without the tax gain, the company would have earned 41 cents a share, 5 cents better than Wall Street's expectations. Cephalon said fourth-quarter revenue rose to $144.3 million, compared with $79.6 million a year ago, an increase of 81%. Quarterly sales of the company's flagship product, the antisleepiness drug Provigil, were $54.8 million, compared with $39.7 million in the same quarter last year. For the year, the company earned $3.01 a share according to generally accepted accounting principles, on revenue of $506.9 million. "Our success in 2002 reflects the balance we have achieved in our product portfolio," CEO Frank Baldino said in a prepared statement. "We increased product sales by 106% over 2001 and delivered remarkable earnings growth." Looking forward, Cephalon expects 2003 product sales of $650 million to $660 million, and diluted earnings of about $1.50 a share after taxes. For the first quarter of 2003, management expects sales of $142 million and diluted earnings of 20 cents a share

To: Biomaven who wrote (7886)	2/20/2003 10:56:09 AM
From: fred hayes	Respond to of 52153

I listened to the cc -- thought it was upbeat. The reason for the "poor" first quarter is heavy expenses to substantially increase size of the sales staff. More core marketing expenses are required because they expect substantially higher sales. They said the guidance for the full year has not changed. Now, if their sales expenses are at a higher level and sales are increasing enough to offset the extra expenses.... duh, lets downgrade the stock. fred