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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
February 25, 1999
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(Date of earliest event reported)
Cephalon, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-19119 23-2484489
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) ID No.)
145 Brandywine Parkway
West Chester, Pennsylvania 19380
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(Address of principal executive offices) (Zip Code)
(610) 344-0200
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 5. OTHER EVENTS.
On February 25, 1999, Cephalon, Inc. (the "Registrant") publicly announced
the completion of a debt offering totaling $30 million, raised through the
private sale of revenue-sharing notes. The proceeds from this financing will be
used to support the commercialization of PROVIGIL(R) (modafinil) Tablets [C-IV].
The Registrant hereby incorporates by reference the press release attached
hereto as Exhibit 99.1 and made a part hereof, into this Item 5.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired: None
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(b) Pro Forma Financial Information: None
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(c) Exhibits: Reference is made to the Exhibit Index annexed hereto and
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made a part hereof. All material agreements entered into in connection with the
referenced transaction will be filed by the Registrant as exhibits to its Annual
Report on Form 10-K.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CEPHALON, INC.
Date: February 25, 1999 By: /s/ Bruce A. Peacock
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Bruce A. Peacock
Executive Vice President and
Chief Operating Officer
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EXHIBIT INDEX
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EXHIBIT PAGE
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99.1 Press Release dated February 25, 1999
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Contact:
Cephalon, Inc. Burns McClellan
Scott Melville (media) 610-738-6270 Justin Jackson (media) 212-213-0006
Sandra Menta (investors) 610-738-6376 Lisa Burns (investors) 212-213-4281
FOR IMMEDIATE RELEASE
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Cephalon Issues $30 Million Revenue-Sharing Notes
West Chester, PA -- February 25, 1999 -- Cephalon, Inc. (Nasdaq: CEPH)
today announced the completion of a debt offering totaling $30 million, raised
through the private sale of revenue-sharing notes. The proceeds from this
financing will be used to support the commercialization of PROVIGIL(R)
(modafinil) Tablets [C-IV]. Cephalon is currently selling PROVIGIL in the
United States, the United Kingdom and Ireland. The offering was purchased by
The Kaufmann Fund, Sprout Group and Delta Opportunity Fund. Diaz & Altschul
Capital, LLC acted as placement agent for this transaction.
The notes are repayable by the company in cash in February 2002. The notes
bear an annual interest rate of 11% and are secured by the company's U.S. rights
to PROVIGIL. Investors in the notes also will receive a royalty of 6% on U.S.
sales of PROVIGIL for up to five years. Cephalon has the right to redeem the
note at a premium prior to maturity, which would reduce the royalty period to
four years. At no time are the notes convertible by the investors into common
stock.
The offering also included the issuance by the company of 1,920,000 five-
year warrants to purchase shares of common stock with an exercise price of
$10.08, a 25% premium to the average market price for the five trading days
prior to February 24th. The investors will forfeit 480,000 of the warrrants if
specified PROVIGIL sales levels are achieved. The terms of the warrants are not
adjustable other than to reflect stock splits, stock dividends and other
customary provisions.
"This financing provides the capital to further invest in our PROVIGIL
franchise with only minimal dilution to our existing shareholders," said Frank
Baldino, Jr., Ph.D., president and chief executive officer of Cephalon, Inc.
"To our knowledge, this represents the first use in the biotechnology sector of
revenue-sharing notes, a vehicle which has previously been utilized successfully
by larger pharmaceutical companies. We believe that investor enthusiasm for
this transaction represents a strong vote of confidence in the company and its
commercialization of PROVIGIL."
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Cephalon Issues $30 Million Revenue-Sharing Notes
Page Two
Established in 1994, Cephalon's U.S. sales force is marketing PROVIGIL to
sleep centers, sleep specialists, neurologists, and managed care organizations.
In addition, the company also copromotes, on an exclusive basis, Bristol-Myers
Squibb's product, Stadol NS(R) (butorphanol tartrate) [C-IV] and Medtronic
Inc.'s Intrathecal Baclofen Therapy (ITB(TM)), to neurologists in the United
States.
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 addition to historical facts or statements of current condition, this
press release may contain forward-looking statements. Forward-looking
statements provide our current expectations or forecasts of future events.
These may include statements regarding anticipated scientific progress on our
research programs, development of potential pharmaceutical products, prospects
for regulatory approval, manufacturing development and capabilities, market
prospects for our products, sales and earnings projections, and other statements
regarding matters that are not historical facts. You may identify some of these
forward-looking statements by the use of words in the statements such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or
other words and terms of similar meaning. Our performance and financial results
could differ materially from those reflected in these forward-looking statements
due to general financial, economic, regulatory and political conditions
affecting the biotechnology and pharmaceutical industries as well as more
specific risks and uncertainties such as those set forth below and in our
reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange
Commission. Given these risks and uncertainties, any or all of these forward-
looking statements may prove to be incorrect. Therefore, you are cautioned not
to place too much reliance on any such factors or forward-looking statements.
Furthermore, we do not intend (and we are not obligated) to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. This discussion is permitted by the Private Securities
Litigation Reform Act of 1995.
NOTE: Cephalon's press releases are posted on the Internet at the
company's Web site at http://www.cephalon.com. They are also available by fax
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24 hours a day at no charge by calling PR Newswire's Company News On-Call at
800-758-5804, extension 134563.
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