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As filed with the Securities and Exchange Commission on July 29, 1999
Registration No.333-75281
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________
AMENDMENT NO. 4
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
________________
CEPHALON, INC.
(Exact name of registrant as specified in its charter)
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Delaware 2834 23-2484489
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification No.)
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145 BRANDYWINE PARKWAY
WEST CHESTER, PA 19380
(610) 344-0200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
_____________
JOHN E. OSBORN
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CEPHALON, INC.
145 BRANDYWINE PARKWAY
WEST CHESTER, PA 19380
(610) 344-0200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
____________
Copies of all communications to:
DAVID R. KING, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET
PHILADELPHIA, PA 19103
(215) 963-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED JULY 30, 1999
(PROSPECTUS)
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1,945,000 SHARES
CEPHALON, INC.
COMMON STOCK
The selling stockholders may offer these shares which they may receive upon
exercise of warrants as described in "Exercise of the Warrants" on page 13.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CEPH." On July 29, 1999 the last reported closing price of our common stock
was $18.4375 per share.
YOU SHOULD READ THIS PROSPECTUS CAREFULLY BEFORE YOU INVEST. SEE RISK
FACTORS BEGINNING ON PAGE 5 OF THIS PROSPECTUS FOR A DISCUSSION OF THE MATERIAL
RISKS INVOLVED IN INVESTING IN THE SHARES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
____________________________
THE DATE OF THIS PROSPECTUS IS JULY __, 1999
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TABLE OF CONTENTS
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Cephalon.................................................................................................... 3
Risk Factors................................................................................................ 5
Use of Proceeds............................................................................................. 13
Exercise of the Warrants.................................................................................... 13
Selling Stockholders........................................................................................ 14
Plan of Distribution for the Resale of the Shares........................................................... 15
About this Prospectus....................................................................................... 16
Where You Can Find More Information......................................................................... 16
Forward-Looking Statements.................................................................................. 16
Legal Opinion............................................................................................... 17
Experts..................................................................................................... 17
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CEPHALON
Cephalon, Inc., headquartered in West Chester, PA, is an international
biopharmaceutical company dedicated to the discovery, development and marketing
of products to treat neurological disorders and cancer.
In December 1998, we received approval from the U.S. Food and Drug
Administration to market PROVIGIL(R), generically called modafinil, tablets
[C-IV], our first approved product in the United States. The FDA approved
PROVIGIL for treating excessive daytime sleepiness associated with narcolepsy.
Our sales organization initiated sales of PROVIGIL in the U.S. in February 1999.
We began marketing PROVIGIL in the United Kingdom in March 1998 and the Republic
of Ireland in February 1999 through our United Kingdom-based sales organization.
Additionally, we have rights to commercialize PROVIGIL in Austria, Italy, Mexico
and Switzerland, and we have either filed or are preparing to file applications
seeking marketing approval in these countries. We also have rights to PROVIGIL
in Japan. We are highly dependent on the commercial success of PROVIGIL in the
United States. The "Risk Factors" section on page 5 of this prospectus contains
more information about our dependence on PROVIGIL.
In February 1997, our company and Chiron Corporation submitted a new drug
application to the FDA for approval to market MYOTROPHIN(R), generically called
mecasermin, injection in the United States for the treatment of amyotrophic
lateral sclerosis. In May 1998, the FDA issued a letter stating that the NDA was
"potentially approvable," under certain conditions. We cannot predict whether
these conditions can be met to the satisfaction of the FDA, and the prospects
for regulatory approval of MYOTROPHIN continue to be very uncertain in the
United States. Because we believed the European regulatory authorities would not
approve our application, in September 1998, we withdrew the joint marketing
authorization application for MYOTROPHIN in Europe for the treatment of ALS.
We have initiated clinical studies exploring the utility of PROVIGIL in
treating excessive daytime sleepiness and fatigue associated with disorders
other than narcolepsy, such as sleep apnea and multiple sclerosis. We have a
significant discovery research program that focuses on discovering and
developing treatments for neurological disorders such as Parkinson's disease,
Alzheimer's disease and stroke, and oncological disorders such as prostate
cancer, pancreatic cancer and a variety of other cancers. We have also formed an
alliance with TAP Holdings Inc. for the development of signal transduction
modulators for the treatment of cancers and prostate disorders in the United
States. TAP is conducting Phase I clinical studies of intravenously and orally
administered compounds, as part of this alliance.
Our research and development efforts focus primarily in two areas:
neurodegenerative disorders and oncological disorders. Neurodegenerative
disorders are characterized by the death of neurons, the specialized conducting
cells of the nervous system. Oncological disorders are characterized by the
uncontrolled proliferation of cells that form tumors. We utilize our technical
expertise in molecular biology, molecular pharmacology, biochemistry, cell
biology, tumor biology and chemistry to develop products in both
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of these areas. Our research strategy has focused on understanding the cellular
mechanisms of cell survival and cell death. This understanding may allow
medicinal chemical approaches toward creating novel, small, orally active,
synthetic molecules. These molecules would (1) facilitate the death of tumor
cells leading to new therapies in oncology or (2) cross the blood-brain barrier,
preventing the free passage of many molecules between the bloodstream and the
central nervous system. If these molecules cross the blood-brain barrier, they
would enhance the survival of neurons, and intervene in the progression of
neurodegenerative disorders. We believe that our multidisciplinary technology
approach facilitates the development of a portfolio of potential products for
the treatment of neurological disorders which involve neuronal death such as
Parkinson's disease, Alzheimer's disease and stroke, and oncological disorders
such as prostate cancer, pancreatic cancer and a variety of other cancers.
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RISK FACTORS
You should carefully consider the following risk factors and the other
information presented in this prospectus before deciding to invest in the shares
of common stock covered by this prospectus.
DURING THE NEXT SEVERAL YEARS, WE WILL BE VERY DEPENDENT ON THE COMMERCIAL
SUCCESS OF PROVIGIL, AND WE MAY BE UNABLE TO ATTAIN PROFITABILITY ON SALES OF
PROVIGIL.
At our present level of operations, we will not be able to attain
profitability if physicians prescribe PROVIGIL only for those who are diagnosed
narcoleptics, and we are not permitted to promote PROVIGIL outside of this
approved use. In December 1998, the FDA approved PROVIGIL for use by those
suffering from excessive daytime sleepiness associated with narcolepsy. The
market for use of PROVIGIL in narcolepsy patients is relatively small; it is
limited to approximately 125,000 persons in the United States, of which we
estimate between 30,000 and 45,000 currently are seeking treatment from a
physician. We have initiated clinical studies to examine whether or not PROVIGIL
is effective and safe when used in connection with disorders other than
narcolepsy, but we do not know whether these studies will in fact demonstrate
safety and efficacy, or if they do, whether we will succeed in receiving
regulatory approval to market PROVIGIL for additional disorders. If the results
of these studies are negative, or if adverse experiences are reported in these
clinical studies or otherwise in connection with the use of PROVIGIL by
patients, this could undermine physician and patient comfort with the product
and limit the commercial success of the product. Even if the results of these
studies are positive, the impact on PROVIGIL may be negligible until we are able
to obtain FDA approval to expand the authorized use of PROVIGIL to include
treatment for conditions other than excessive daytime sleepiness associated with
narcolepsy. FDA regulations restrict our ability to communicate the results of
additional clinical studies to patients and physicians without first obtaining
from the FDA approval to expand the authorized uses for this product. As a
result, it may be several years, if ever, before we have sales revenue from
PROVIGIL beyond that attributable to prescriptions for diagnosed narcoleptics.
In addition, the following factors could limit the rate and level of market
acceptance of PROVIGIL:
. the effectiveness of our sales and marketing efforts relative to those of
our competitors;
. the availability and level of reimbursement for PROVIGIL by third-party
payors, including Federal, state and foreign government agencies;
. the occurrence of any side effects or adverse reactions (or unfavorable
publicity relating thereto) stemming from the use of PROVIGIL.
We have described these and other factors in more detail below:
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Our lack of experience selling pharmaceuticals, together with significant
competition, may impact our ability to effectively market and sell PROVIGIL in
the United States.
In the United States and elsewhere, PROVIGIL faces significant competition
in the marketplace since narcolepsy is currently treated with several drugs, all
of which have been available for a number of years and many of which are
available in inexpensive generic forms. Thus, we will need to demonstrate to
physicians and third party payors that the cost of PROVIGIL is reasonable and
appropriate in light of the safety and efficacy of the product, and the related
health care benefits to the patient.
During the past few years, we have developed a specialty sales organization
focused on marketing, promoting and detailing the products of other companies to
neurologists. However, we have only very limited experience in marketing,
selling or distributing our own products in the United States, and we lack the
more substantial experience held by major pharmaceutical companies in
developing, training and managing a sales organization over an extended period
of time. More recently, we have established a managed care sales force to market
our products to health maintenance organizations, prescription benefit
management firms, and other third party payors; we also lack substantial
experience in this area and we cannot be certain that we will be successful in
our efforts to market our products to these groups.
The efforts of government entities and third party payors to contain or reduce
the costs of health care may affect our sales and limit the commercial success
of PROVIGIL.
In certain foreign markets, pricing or profitability of pharmaceutical
products is subject to governmental control. In the United States, there have
been, and we expect there will continue to be, various Federal and state
proposals to implement similar government controls. The commercial success of
PROVIGIL could be limited if federal or state governments adopt any such
proposals. In addition, in both the United States and elsewhere, sales of
pharmaceutical products depend in part on the availability of reimbursement to
the consumer from third party payors, such as government and private insurance
plans. Third party payors increasingly challenge the prices charged for
products, and limit reimbursement levels offered to consumers for such products.
Efforts directed toward PROVIGIL by third party payors could impair the
commercial success of the product.
As PROVIGIL is used commercially, unintended side effects may appear that could
impact sales of PROVIGIL.
We have limited the usage of PROVIGIL to clinical trial patients under
controlled conditions and under the care of expert physicians. We cannot predict
whether the commercial use of PROVIGIL will produce undesirable or unintended
side effects that have not been evident in our clinical trials.
We may not be able to maintain market exclusivity for PROVIGIL, and therefore
potential competitors may develop competing products, which could result in a
decrease in sales and market share, and could cause us to have to cut prices to
compete successfully, and would prevent PROVIGIL from being a commercial
success.
We hold exclusive license rights to a composition-of-matter patent covering
modafinil as the active drug substance in PROVIGIL; this patent was to have
expired in 1998 in the United States, but we have applied for a patent extension
that, if granted, would run through November 18, 2001. In addition, we own a
U.S. patent covering the particle size of modafinil which issued in 1997.
However, we may
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not succeed in obtaining any extension for the composition-of-matter patent, and
we cannot guarantee that any of our patents will be found to be valid if their
validity is challenged by a third party, or that these patents (or any other
patent owned or licensed by us) would prevent a potential competitor from
developing competing products or product formulations that avoid
infringement.
In the United States, the Orphan Drug Act provides incentives to drug
manufacturers to develop and manufacture drugs for the treatment of rare
diseases. The FDA has granted orphan drug status to PROVIGIL for its use in the
treatment of excessive daytime sleepiness associated with narcolepsy. The grant
of orphan drug status to PROVIGIL allows us a seven-year period of marketing
exclusivity for the product in that indication. While the marketing exclusivity
provided by the orphan drug law should prevent other sponsors from obtaining
approval of the same compound for the same indication (unless the other sponsor
can demonstrate clinical superiority), it would not prevent approval of the
compound for other indications that otherwise are non-exclusive, nor approval of
other kinds of compounds for the same indication.
Manufacturing, supply and distribution problems could create supply disruptions
that would damage commercial prospects for PROVIGIL.
We depend upon Laboratoire L. Lafon as our sole supplier of bulk modafinil
compound, the active drug substance contained in PROVIGIL. Moreover, we depend
upon a single manufacturer that is qualified to manufacture finished PROVIGIL
for commercial purposes, and a non-active ingredient used in PROVIGIL is no
longer manufactured or commercially available. We maintain an inventory of
modafinil compound to protect against supply disruptions and, at anticipated
levels of demand, we also have several years supply of the ingredient that is no
longer available. We are preparing a new formulation of PROVIGIL that would not
include the now unavailable ingredient, and could enable us to qualify
additional tablet manufacturers with regulatory authorities. However, the
introduction of any such new formulation requires that we establish that the new
formulation is bioequivalent to the current one, and also requires regulatory
approval. If we are unable to develop and obtain approval for a new formulation,
or if demand for the product were to greatly exceed expectations, we could face
supply disruptions that would result in significant costs and delays, undermine
goodwill established with physicians and patients, and damage commercial
prospects for PROVIGIL.
We must comply with all applicable regulatory requirements of the FDA and
foreign authorities, including current Good Manufacturing Practice regulations.
The facilities used to manufacture, store and distribute our products are
subject to inspection by the FDA and other regulatory authorities at any time to
determine compliance with cGMP regulations and other regulatory requirements.
The cGMP regulations are complex, and failure to be in compliance could lead to
remedial action, civil and criminal penalties and delays in production of
material.
We rely on several third parties in the United States to formulate,
tablet, package, distribute, provide customer service activities and accept and
process returns. Although we employ a small number of persons to coordinate and
manage the activities undertaken by these third parties, we have relatively
limited experience in this regard. Any disruption in these activities could
impede our ability to sell PROVIGIL and reduce sales revenue.
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IF WE ARE UNABLE TO MAINTAIN CERTAIN CASH BALANCES UNDER THE TERMS OF OUR
REVENUE SHARING NOTES, HOLDERS OF OUR REVENUE SHARING NOTES HAVE THE RIGHT TO AN
INCREASED ROYALTY PERCENTAGE, WHICH WILL INCREASE OUR ROYALTY EXPENSE, AND MAY
HAVE THE RIGHT TO ACCELERATE THE NOTES AND FORECLOSE ON THE SECURITY, WHICH WILL
RESULT IN THE LOSS OF OUR RIGHTS TO PROVIGIL.
The notes contain a number of covenants, including a requirement to
maintain cash and cash equivalent balances of $40,000,000 through December 31,
1999 and $30,000,000 during the remainder of the term of the notes. This
requirement to maintain cash and cash equivalent balances may limit our
flexibility to use our cash resources for other corporate purposes. The notes
are also secured by our licenses, patents and FDA rights relating to PROVIGIL.
The notes also require us to pay a royalty of 6% on net U.S. PROVIGIL sales for
5 years, which we may reduce to 4 years under certain circumstances. If we fail
to maintain the required cash balances, the holders of the notes can declare a
default and increase the royalty percentage to 25% of net U.S. PROVIGIL sales
and, if the default is not cured within one year, can accelerate the due date of
the notes and foreclose on the security. The holders of the notes can also
foreclose on the security if we fail to pay principal and interest when due or
violate certain other covenants.
IF WE ARE UNABLE TO RAISE SUBSTANTIAL ADDITIONAL FUNDS, WE MAY BE FORCED TO
CURTAIL OR RESTRUCTURE OPERATIONS OR SELL CERTAIN ASSETS, WHICH MAY ADVERSELY
IMPACT OUR BUSINESS, OR SELL ADDITIONAL EQUITY SECURITIES.
Since our inception we have had negative cash flow from operations. Based
on our use of funds for the quarter ended March 31, 1999, we had sufficient cash
resources to fund our operations at their current level for at least twelve
months. However, we will need to raise substantial additional funds
to continue our operations at their current level, continue to meet our minimum
cash balance requirements during the period prior to the repayment of the notes
and pay the notes at maturity. We expect that it will be at least several years,
if ever, before our level of commercial sales and other revenue will provide
enough funds to generate positive cash flow from operations. Therefore, if we
cannot raise additional funds, we will have to reduce our present level of
spending, which may involve curtailing or restructuring our operations,
including the sale of certain assets. Even after taking these steps, we would
not be able to eliminate all of our existing fixed costs, such as occupancy
expenses and debt service.
Most of the funds we have raised to date have been through the sale of
equity in our company; our ability to raise money through the sale of additional
equity in our company, as well as the price at which such equity may be sold,
are difficult to predict. If we issue common stock or securities convertible
into common stock in order to raise such funds, the existing shareholders'
percentage ownership of our company necessarily would be reduced.
THE VALUE OF YOUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY DUE TO THE VOLATILITY
OF ITS MARKET PRICE AND TRADING VOLUME, WHICH SHOULD IMPACT YOUR DECISION TO
BUY, SELL OR HOLD YOUR SHARES.
The market price and trading volume of shares of our common stock is
volatile, and we expect it to continue to be volatile for the foreseeable
future. For example, during the previous 52 weeks, our common stock traded at a
high price of $18.875 and a low price of $3.875. Negative announcements (such as
adverse regulatory decisions, disputes concerning patent or other proprietary
rights, or operating results that fall below the market's expectations) could
trigger significant declines in the price of our common stock. In addition, news
concerning certain external events, such as that concerning our competitors or
changes in government regulations that may impact the biotechnology or
pharmaceutical industries, also could affect the price of our common stock.
WE FACE SIGNIFICANT PRODUCT LIABILITY RISKS, WHICH MAY HAVE A NEGATIVE EFFECT ON
OUR FINANCIAL PERFORMANCE.
The administration of drugs to humans, whether in clinical trials or
commercially, can result in product liability claims even if our drugs or a
collaborator's drugs are not actually at fault for causing an injury.
Furthermore, our products may cause, or may appear to have caused, adverse side
effects or potentially dangerous drug
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interactions that we may not learn about or understand fully until the drug is
actually manufactured and sold for some time. Product liability claims can be
expensive to defend and may result in large judgments or settlements against us,
which could have a negative effect on our financial performance. We maintain
product liability insurance at a relatively limited level, and as such, claims
could exceed our coverage. Furthermore, we cannot be certain that we will always
be able to purchase sufficient insurance at an affordable price. Even if a
product liability claim is not successful, the adverse publicity and time and
expense of defending such a claim may interfere with our business.
WE ARE INVOLVED IN A NUMBER OF LEGAL PROCEEDINGS THAT, IF ADVERSELY ADJUDICATED
OR SETTLED, COULD MATERIALLY IMPACT OUR FINANCIAL CONDITION.
Cephalon, a current director and officer, and a former officer, have been
named as defendants in a number of civil actions filed in the U.S. District
Court for the Eastern District of Pennsylvania, all of which have been
consolidated into a single class action. The plaintiff class is comprised of
those persons and entities who purchased Cephalon common stock, or traded in
options to buy or sell Cephalon common stock, during the period June 12, 1995
through and including June 7, 1996. Plaintiffs seek to hold defendants liable
for stock trading losses that stem from alleged violations of the U.S.
securities laws and alleged common law negligent misrepresentation. More
specifically, plaintiffs have alleged that statements made by Cephalon and the
named defendants relating to the results of certain clinical studies of
MYOTROPHIN were misleading. We have vigorously defended this lawsuit and
believe that there are valid defenses against the claims, but the defense of the
action is expensive, and the costs of this defense will reduce the amount of
insurance coverage that might otherwise be available to satisfy claims.
Therefore, on June 4, 1999, Cephalon entered into a Stipulation of Settlement
providing that Cephalon pay a total of $17,000,000 in full settlement of this
action, inclusive of attorneys fees and expenses. Of this amount, $7,500,000
will be paid by our directors' and officers' liability insurance carriers; the
remaining $9,500,000 will be paid by Cephalon. We have incurred charges to
earnings sufficient to cover the costs of the proposed settlement. On July 30,
1999, the Court entered a judgment of dismissal with prejudice, dismissing all
claims against the defendants. This order will become final on August 30, 1999,
if none of the parties files an appeal. In addition, a further complaint has
been filed with the Court alleging that Cephalon is liable under common law for
misrepresentations concerning the results of the MYOTROPHIN clinical trials, and
that Cephalon and certain of its current and former officers and directors are
liable for the actions of persons who allegedly traded in Cephalon common stock
on the basis of material inside information. With respect to their
misrepresentation claim, the plaintiffs in this additional matter were in fact
members of the above mentioned plaintiff class; but they excluded themselves
from it. We have filed a motion to dismiss these claims relating to Cephalon and
its officers and directors. We believe that we have adequate defenses to all
claims raised in this action and that, even if there is a judgment against us,
it will not have a negative effect on our financial condition or results of
operations.
Due to our involvement in promoting STADOL NS(R), generically called
butorphanol tartrate, Nasal Spray, a product of Bristol-Myers Squibb Company, we
are a co-defendant in a product liability action brought against Bristol-Myers.
Although we cannot predict with certainty the outcome of this litigation, we
believe that any expenses or damages that we may incur will be paid by Bristol-
Myers under the indemnification provisions of our co-promotion agreement. As
such, we do not believe that this action will have a negative effect on our
financial condition or results of operations.
OUR RESEARCH AND DEVELOPMENT ACTIVITIES MAY NOT RESULT IN ANY ADDITIONAL
PHARMACEUTICAL PRODUCTS, WHICH WOULD ADVERSELY EFFECT OUR OPERATIONS.
We are highly focused on the research and development of potential
pharmaceutical products. These activities include engaging in discovery research
and process development, conducting preclinical and clinical studies, and
seeking regulatory approval in the United States and abroad. In all of these
areas, we have relatively limited resources and compete against major
multinational pharmaceutical companies. Moreover, even if we undertake these
activities in an effective and efficient manner, regulatory approval
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for the sale of new pharmaceutical products remains unlikely since, in our
industry, the majority of compounds fail to enter clinical studies and the
majority of therapeutic candidates entering clinical studies fail to be
commercialized.
WE MAY NOT BE ABLE TO OBTAIN ADEQUATE PATENT PROTECTION EITHER IN THE UNITED
STATES OR ABROAD, WHICH COULD IMPACT OUR ABILITY TO COMPETE EFFECTIVELY.
We place considerable importance on obtaining patent and trade secret
protection for new technologies, products and processes. We intend to file
applications for patents covering the composition of matter or uses of our drug
candidates or our proprietary processes. We also rely on trade secrets, know-how
and continuing technological advancements to support our competitive position.
Although we have entered into confidentiality and invention rights agreements
with our employees, consultants, advisors and collaborators, we cannot be sure
that such agreements will be honored or that we will be able to effectively
protect our rights to our unpatented trade secrets and know-how. Moreover, we
cannot be sure that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
our trade secrets and know-how. In addition, many of our scientific and
management personnel have been recruited from other biotechnology and
pharmaceutical companies where they were conducting research in areas similar to
those that we now pursue. As a result, we could be subject to allegations of
trade secret violations and other claims.
In addition, we could incur substantial costs in defending any patent
infringement suits or in asserting any patent rights, including those licensed
to us by third parties, and in defending suits against us or our employees
relating to ownership of or rights to intellectual property. Such disputes could
substantially delay our drug development or commercialization. The U.S. Patent
and Trademark Office or a private party could institute an interference
proceeding involving us in connection with one or more of our patents or patent
applications. Such proceedings could result in an adverse decision as to
priority of invention, in which case we would not be entitled to a patent on the
invention at issue in the interference proceeding. The PTO or a private party
could also institute reexamination proceedings involving us in connection with
one or more of our patents, and such proceedings could result in an adverse
decision as to the validity or scope of the patents.
OUR DEPENDENCE ON KEY EXECUTIVES AND SCIENTISTS COULD IMPACT THE DEVELOPMENT AND
MANAGEMENT OF OUR BUSINESS.
The nature of our business is such that we are highly dependent upon our
ability to attract and retain qualified scientific, technical and managerial
personnel. There is intense competition for qualified personnel in the
pharmaceutical and biotechnology industries, and we cannot be sure that we will
be able to continue to attract and retain qualified personnel necessary for the
development and management of our business. Our research and development
programs and our business might be harmed by the loss of the services of
existing personnel, as well as the failure to recruit additional key scientific,
technical and managerial personnel in a timely manner. Much of the know-how we
have developed resides in our scientific and technical personnel and is
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not readily transferable to other personnel. We do not maintain "key man" life
insurance on any of our employees.
WE MAY NEVER OBTAIN APPROVAL TO MARKET MYOTROPHIN, IT MAY NOT BE COST-EFFECTIVE
TO PURSUE MYOTROPHIN FOR OTHER INDICATIONS, AND THEREFORE WE MAY NEVER DERIVE
REVENUE FROM MYOTROPHIN.
Cephalon and Chiron have withdrawn the joint marketing authorization
application for MYOTROPHIN in Europe for the treatment of ALS. We made this
decision because of comments we received from the reviewer of the application
concerning the results of our two pivotal ALS studies. These comments led us to
believe that the reviewer would not approve our application. The withdrawal of
our marketing authorization application for MYOTROPHIN in Europe may negatively
affect the FDA approval process for MYOTROPHIN in the United States.
In May 1998, the FDA issued a letter stating that the NDA application
submitted jointly by Cephalon and Chiron to market MYOTROPHIN in the United
States for the treatment of ALS was "potentially approvable," contingent,
however, upon the submission of additional information from ongoing clinical
studies that demonstrates to the satisfaction of the FDA that MYOTROPHIN is
effective in the treatment of ALS. Cephalon and Chiron have had discussions with
the FDA regarding safety and efficacy data and have submitted information from
the ongoing Treatment Investigational New Drug program. The T-IND program is a
compassionate use program that is neither placebo-controlled nor blinded, and
therefore is not designed to produce evidence of efficacy. We are not planning
to submit additional data to the FDA at this time. The study of MYOTROPHIN in
ALS patients being conducted by Kyowa Hakko in Japan is not under our control.
Results from that study may be available in late 1999 but may not satisfy the
FDA's request for additional information. The prospects for regulatory approval
of MYOTROPHIN continue to be very uncertain in the United States. We will
continue to evaluate the prospects of receiving regulatory approval and, based
on communications with the FDA, may determine to withdraw the new drug
application.
If the information submitted to the FDA to date does not prove to be
sufficient for approval, a new study would be necessary, which would be
expensive and would take years to complete. We are not sure whether the
potential profits from sales of MYOTROPHIN would make an additional study cost-
effective to conduct. Even if an additional study were conducted, the results of
a new study may not be sufficient to obtain regulatory approval. If MYOTROPHIN
were not approved for ALS, we are not sure it would be cost-effective to pursue
MYOTROPHIN for any other indication.
OUR DEVELOPMENT AND MARKETING EFFORTS ARE HIGHLY DEPENDENT ON CORPORATE
COLLABORATORS WHO MAY NOT DEVOTE SUFFICIENT TIME, RESOURCES AND ATTENTION TO OUR
PROGRAMS, WHICH MAY ADVERSELY IMPACT OUR EFFORTS TO DEVELOP AND MARKET POTENTIAL
PRODUCTS.
Because we have limited resources, we have entered into a number of
agreements with other pharmaceutical companies. These agreements may call for
our partner to control:
. the supply of bulk or formulated drugs for commercial use or for use in
clinical trials;
. the design and execution of clinical studies;
. the process of obtaining regulatory approval to market the product; and
. the marketing and selling of any approved product.
In each of these areas, our partners may not support fully our research and
commercial interests since our program may well compete for time, attention and
resources with the internal programs of our corporate collaborators. As such, we
cannot be sure
-11-
<PAGE>
that our corporate collaborators will share our perspectives on the relative
importance of our program, that they will commit sufficient resources to our
program to move it forward effectively, or that the program will advance as
rapidly as it might if we had retained complete control of all research,
development, regulatory and commercialization decisions. For example, we rely on
several of these collaborators for the production of compounds and the
manufacture and supply of pharmaceutical products. If we learn from any of them
that they will not, or cannot, continue to produce and supply compounds or
products under the terms of our agreement(s), we would attempt to identify and
obtain a commitment from another manufacturer. We cannot be certain that we
would be able to locate an appropriate manufacturer or that a new manufacturer
will be able to manufacture such compounds or products in sufficient quantities,
at reasonable prices, and in accordance with cGMP requirements established by
the FDA and other regulatory authorities.
WE MAY BE REQUIRED TO INCUR SIGNIFICANT COSTS TO COMPLY WITH ENVIRONMENTAL LAWS
AND REGULATIONS AND OUR COMPLIANCE MAY LIMIT ANY FUTURE PROFITABILITY.
Our research and development activities involve the controlled use of
harzardous, infectious and radioactive materials that could be hazardous to
human health, safety or the environment. We store these materials and various
wastes resulting from their use at our facility pending ultimate use and
disposal. We are subject to a variety of federal, state and local laws and
regulations governing the use, generation, manufacture, storage, handling and
disposal of these materials and wastes resulting from their use, and we may be
required to incur significant costs to comply with both existing and future
environmental laws and regulations.
We believe that although our safety procedures for handling and disposing of
these materials comply with federal, state and local laws and regulations, the
risk of accidental injury or contamination from these materials cannot be
entirely eliminated. In the event of an accident, we could be held liable for
any resulting damages.
THE YEAR 2000 ISSUE MAY CAUSE COMPLIANCE FAILURE AND SERVICE INTERRUPTIONS IN
OUR BUSINESS OR OPERATIONS IF CERTAIN OF OUR SUPPLIERS OR VENDORS ARE UNABLE TO
BECOME YEAR 2000 COMPLIANT WHICH MAY CAUSE US TO INCUR ADDITIONAL EXPENSE.
The "Year 2000 Issue" is typically the result of software and firmware
being written using two digits rather than four to define the applicable year.
If our software and firmware with date-sensitive functions are not Year 2000
complaint, these systems may recognize a date using "00" as the year 1900 rather
than the year 2000.
We have completed minor modifications to our computer systems, and at this
time do not expect the Year 2000 Issue to pose a significant internal
operational problem. However, we cannot be sure that the systems of other
companies on which we rely will be complaint on or before January 1, 2000 and
will not have an adverse effect on our operations. We have initiated formal
communication with significant suppliers and third party vendors to determine
the extent to which our operations are vulnerable to those third parties'
failure to remediate their own Year 2000 hardware and software issues.
Significant suppliers or third party vendors that are unable to become Year 2000
compliant could adversely affect our business or operations. We are also
vulnerable to external forces that might generally affect industry and commerce,
such as utility or transportation company Year 2000 compliance failures and
related service interruptions. We have not yet fully developed a comprehensive
contingency plan addressing situations that may result if we are unable to
achieve Year 2000 readiness of our critical operations.
-12-
<PAGE>
USE OF PROCEEDS
We will use the proceeds, if any, from the exercise of the note warrants
and the P&P Warrants to:
. pay a portion of amounts due under the notes, potentially including
payment of principal and payment of royalties due upon sales of PROVIGIL;
. support the ongoing development and marketing of PROVIGIL; and
. support our other research and development programs.
We will not receive any proceeds from the resale of the note warrant shares
or the P&P Warrant Shares.
EXERCISE OF THE WARRANTS
The selling stockholders may offer up to 1,920,000 shares of our common
stock issuable upon the exercise of the note warrants and Petkevich & Partners
may offer up to 25,000 shares of our common stock issuable upon the exercise of
the P&P warrants.
The note warrants consist of Class A warrants and Class B warrants that
were issued to the selling stockholders in connection with their purchase of our
11% Revenue Sharing Senior Secured Notes due 2002.
We issued the P&P warrants to P&P as compensation for providing financial
advice to us. The P&P warrants have the same terms as the Class A warrants.
The note warrants permit the holders of the note warrants to purchase up to
1,920,000 note warrant shares at an exercise price, subject to adjustment, of
$10.08 per note warrant share. Holders of the Class A warrants have the right to
exercise part or all of the Class A warrants at any time during the period
beginning March 1, 1999 and ending March 1, 2004. Holders of the Class B
warrants may exercise all or part of the Class B warrants at any time beginning
March 1, 2002 (subject to acceleration upon the occurrence of certain events,
including a consolidation, merger or reorganization) and ending March 1,
2004.
The P&P Warrants permit P+P to purchase up to 25,000 P&P warrant shares at
an exercise price, subject to adjustment, of $10.08 per P&P warrant share.
The number of note warrant shares and P&P warrant shares is subject to
adjustment, upon the following events:
. the subdivision or combination of shares of common stock;
. the issuance of dividends in the form of common stock or other
securities;
. the issuance to all holders of common stock of rights, options or
warrants to purchase common stock for less than the market price at the time of
such issuance;
. the issuance of dividends in the form of debt securities or other
property; and
. the payment of cash dividends in excess of 10% of the market price of
our common stock at the time.
If any of these events occur, the exercise price of each note warrant share
and each P&P warrant share is subject to a corresponding adjustment.
The holders of the note warrants will forfeit Class B warrants to purchase
up to 480,000 of the note warrant shares issuable upon exercise of the Class B
warrants if we achieve specified PROVIGIL sales levels.
-13-
<PAGE>
SELLING STOCKHOLDERS
On March 1, 1999, we issued (i) note warrants to purchase up to 1,920,000
note warrant shares and (ii) P&P warrants to purchase up to 25,000 P&P warrant
shares. Under the terms of the note purchase agreements relating to our revenue
sharing notes and the warrants, we are obligated to use our best efforts to
maintain an effective registration statement for the period from the
effectiveness of the registration statement of which this prospectus forms a
part and the earlier of (a) two years after the expiration of the exercise
period for the warrants and (b) the time at which the holders no longer own any
registrable securities. After the exercise of the note warrants and the P&P
warrants, the selling stockholders may offer or sell the shares received upon
the exercise of the warrants from time to time in the manner contemplated under
"Plan of Distribution."
The following table sets forth certain information regarding the beneficial
ownership of our common stock by the selling stockholders, and the maximum
number of shares each may offer, assuming each selling stockholder chooses to
exercise its warrants and elects to sell the shares it receives under this
prospectus.
<TABLE>
<CAPTION>
Number of Shares Not
Number of Shares Exercisable until Maximum Number of Beneficial Ownership
Beneficially Owned(1) March 1, 2002 Shares After Resale of Shares
----------------------------
Name of Being Number of
Selling Stockholder Offered Shares Percent
- -------------------------------------- ----------------- --------------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
Delta Opportunity Fund, Ltd. 348,000 116,000 464,000 0 -
Delta Opportunity Fund (Institutional) 32,000 44,000 176,000 0 -
DLJ Capital Group 2,128 709 2,837 0 -
DLJ ESC II, L.P. 21,442 7,147 28,589 0 -
The Kaufmann Fund, Inc. 980,000 160,000 640,000 500,000 -
Sprout Capital VIII, L.P. 245,492 81,831 327,323 0 -
Sprout Growth II, L.P. 196,208 85,403 261,611 0 -
Sprout Venture Capital, L.P. 14,730 4,910 19,640 0 -
Petkevich & Partners 25,500 0 25,000 500 -
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities.
The shares of common stock subject to options or warrants currently exercisable
within 60 days of June 14, 1999 are deemed outstanding and to be beneficially
owned by the selling stockholders holding such options or warrants.
-14-
<PAGE>
PLAN OF DISTRIBUTION FOR THE RESALE OF THE SHARES
A selling stockholder may from time to time, in one or more transactions, sell
all or a portion of the note warrant shares and P+P may from time to time, in
one or more transactions, sell all or a portion of the P+P warrant shares on the
Nasdaq National Market, in negotiated transactions, in underwritten transactions
or otherwise, at prices then prevailing or related to the then current market
price or at negotiated prices. The offering price of the note warrant shares
from time to time will be determined by a selling stockholder and the offering
price of the P+P warrant shares from time to time will be determined by P+P, and
at the time of such determination, may be higher or lower than the market price
of our common stock on the Nasdaq National Market. The shares may be sold
directly or through broker-dealers acting as principal or agent. The methods by
which the shares may be sold include:
. a block trade in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
. purchases by a broker-dealer as principal and resale by such broker-dealer
for its account pursuant to this prospectus;
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
. privately negotiated transactions.
In effecting sales, brokers or dealers engaged by a selling stockholder or
by P+P may arrange for other brokers or dealers to participate. These brokers or
dealers may receive commissions or discounts from a selling stockholder or P+P
as applicable, in amounts to be negotiated immediately prior to the sale. A
selling stockholder, P+P and any underwriters, dealers or agents participating
in the distribution of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the shares by a
selling stockholder or P+P and any commissions received by any broker-dealers
may be deemed to be underwriting commissions under the Securities Act. In
addition, any shares covered by this prospectus that qualify for sale pursuant
to Rule 144 might be sold under Rule 144 rather than pursuant to this
prospectus.
Additionally, in connection with the sale of the shares, a selling
stockholder or P+P may enter into hedging transactions with broker-dealers and
the broker-dealers may engage in short sales of the shares in the course of
hedging the positions they assume with the selling stockholder or P+P. A selling
stockholder or P+P may also enter into option or other transactions with broker-
dealers that involve the delivery of the shares to the broker-dealers, who may
then resell or otherwise transfer the shares. A selling stockholder or P+P may
also loan or pledge the shares to a broker-dealer and the broker-dealer may sell
the shares so loaned or upon a default may sell or otherwise transfer the
pledged shares.
When a selling stockholder elects to make a particular offer of note
warrant shares, or P+P elects to make a particular offer of P+P warrant shares,
we will distribute a prospectus supplement, if required, that will identify any
underwriters, dealers or agents and any discounts, commissions and other terms
constituting compensation from a selling stockholder or P+P, as applicable, and
any other required information.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.
We also have agreed to indemnify the selling stockholders in certain
circumstances, against certain liabilities arising under the Securities Act.
Each selling stockholder or P+P has agreed to indemnify us and our directors and
officers who sign the registration statement against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to pay all costs and expenses relating to the registration
of the shares (other than fees and expenses, if any, of counsel or other
advisors to the selling stockholders and P+P). Any commissions, discounts or
other fees payable to broker-dealers in connection with any sale of the shares
will be borne by the selling stockholder or P+P, as applicable, selling such
shares.
All references to selling stockholders in this Section shall also be deemed
to include any transferees, assignees and pledgees of the selling stockholders.
-15-
<PAGE>
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the SEC's public
reference rooms located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, Suite 1300, New York, NY 10048. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at "http://www.sec.gov."
We have filed a Registration Statement on Form S-3, of which this
prospectus forms a part, to register the resale of the shares with the SEC. As
allowed by SEC rules, this prospectus does not contain all the information you
can find in the Registration Statement or the exhibits to the Registration
Statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that we have previously
filed with the SEC. These documents contain important information about us, our
business and our finances.
The documents that we are incorporating by reference are:
. Our Annual Report on Form 10-K for the year ended December 31, 1998;
. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
. Our Current Report on Form 8-K filed with the SEC on March 1, 1999;
and
. The description of our common stock that is contained in our Form 8-A
Registration Statement filed with the SEC on March 15, 1991, including
any amendments or reports filed for the purpose of updating such
description.
Any documents which we file pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus but before the end of any
offering of securities made under this prospectus will also be considered to be
incorporated by reference.
If you request, either orally or in writing, we will provide you with a
copy of any or all documents which are incorporated by reference. We will
provide such documents to you free of charge, but will not include any exhibits,
unless those exhibits are incorporated by reference into the document. You
should address written requests for documents to John Osborn, Senior Vice
President and General Counsel, Cephalon, Inc., 145 Brandywine Parkway, West
Chester, PA 19380, (610) 344-0200.
FORWARD-LOOKING STATEMENTS
Our disclosure and analysis in this prospectus contains some forward-
looking statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements by the fact that
they do not relate strictly to historical or current facts. Such statements may
include words such as "anticipate", "estimate", "expect", "project", "intend",
"plan", "believe" and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance. In particular,
these include statements relating to present or anticipated scientific progress,
development of potential pharmaceutical products, future revenues, capital
expenditures, research and development expenditures, future financing and
collaborations, personnel, manufacturing requirements and capabilities, and
other statements regarding matters that are not historical facts or statements
of current condition.
Any or all of our forward-looking statements in this prospectus may
turn out to be wrong. They can be affected by inaccurate assumptions we might
make or by known or unknown risks and uncertainties. Many factors mentioned in
our discussion in this prospectus will be important in determining future
results. Consequently, no forward-looking statement can be guaranteed. Actual
future results may vary materially.
We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
You are advised, however, to consult any further disclosures we make in our 10-
Q, 8-K and 10-K reports to the SEC. Also note that we provide a cautionary
discussion of risks and uncertainties relevant to our business under "Risk
Factors" on page 5 of this prospectus. These are factors that we think could
cause our actual results to differ materially from expected results. Other
factors besides those listed here could also adversely affect us. This
discussion is provided as permitted by the Private Securities Litigation Reform
Act of 1995.
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<PAGE>
LEGAL OPINION
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on the
validity of the shares.
EXPERTS
The financial statements incorporated by reference in this prospectus and
elsewhere in this registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
-17-
<PAGE>
================================================================================
1,945,000 Shares
CEPHALON, INC.
Common Stock
----------
PROSPECTUS
----------
July __, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby.
Commission fee........................................ $ 5,450.00
Nasdaq listing fee.................................... $ 17,500.00
Legal fees, accounting fees and expenses.............. $300,000.00
Total............................................. $322,950.00
==========
All of the amounts shown are estimates except for the fees payable to the
Securities and Exchange Commission and the National Association of Securities
Dealers.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("Section 145") permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain limitations. Article
9 of the Company's By-Laws provides for the indemnification of directors,
officers, employees and agents of the Company to the maximum extent permitted by
the Delaware General Corporation Law. Section 145 empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a director, officer or agent of the corporation or another enterprise
if serving at the request of the corporation. Depending on the character of the
proceeding, a corporation may indemnify against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person
indemnified acted in good faith and in respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. In the
case of an action by or in the right of the corporation, no indemnification may
be made with respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper. Section 145 further provides that to the extent a director,
officer, employee or agent of a corporation has been successful in the defense
of any action, suit or proceeding referred to above or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
The Company's By-laws permit it to purchase insurance on behalf of such
person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under the foregoing
provision of the By-laws.
<PAGE>
ITEM 16. LIST OF EXHIBITS
The exhibits filed as part of this registration statement are as follows:
EXHIBIT
NUMBER DESCRIPTION
5.1** Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered.
23.1** Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5.1 hereto).
23.2* Consent of Arthur Andersen LLP
24.1** Powers of Attorney (included on signature page).
___________
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to its Restated Certificates of Incorporation, its By-laws,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against a public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
Postt-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraph (I)(i) and 1(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this Amendment No. 4 to the Registration Statement to be signed on
its behalf by the undersigned thereunto duly authorized, in West Chester,
Pennsylvania, on this 30th day of July, 1999.
CEPHALON, INC.
By: /s/ Frank Baldino, Jr, Ph.D.
-------------------------------------------
Frank Baldino, Jr., Ph.D.
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 4 to the Registration Statement has been signed below by the
following persons and by Frank Baldino, Jr., Ph.D. as attorney-in-fact for the
specified persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
By: /s/ Frank Baldino, Jr., Ph.D. President, Chief Executive Officer and July 30, 1999
----------------------------------------------------------
Frank Baldino, Jr., Ph.D. Director (Principal executive officer)
By: * Executive Vice President, Chief Operating July 30, 1999
----------------------------------------------------------
Bruce A. Peacock Officer and Director
By: * Director July 30, 1999
----------------------------------------------------------
William P. Egan
By: * Director July 30, 1999
----------------------------------------------------------
Robert J. Feeney, Ph.D.
By: * Director July 30, 1999
----------------------------------------------------------
Martyn D. Greenacre
By: * Director July 30, 1999
----------------------------------------------------------
Kevin E. Moley
By: * Director July 30, 1999
---------------------------------------------------------
Horst Witzel, Dr.-Ing.
By: * Senior Vice President, Finance and Chief July 30, 1999
---------------------------------------------------------
J. Kevin Buchi Financial Officer (Principal financial and
accounting officer)
</TABLE>
<PAGE>
CEPHALON, INC.
REGISTRATION STATEMENT ON FORM S-3
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DOCUMENT NUMBER
- ------ --------------------------------------------------------------------- ------
<S> <C>
5.1** Opinion of Morgan, Lewis & Bockius LLP
23.1** Consent of Morgan, Lewis & Bockius LLP (included in its opinion as
Exhibit 5.1 hereto)
23.2* Consent of Arthur Andersen LLP
24.1** Powers of Attorney (included as part of the signature page of this
Registration Statement)
_________
* Filed herewith
** Previously filed
</TABLE>
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 25, 1999
included in Cephalon, Inc.'s Form 10-K for the year ended
December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
July 30, 1999
