<PAGE>
As filed with the Securities and Exchange Commission on May __, 2000
Registration No.333-75281
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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Post-Effective Amendment No. 1
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, ESQ.
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 requests that this Post-Effective Amendment No. 1 become
effective, as soon as practicable, pursuant to Section 8(c) of the Securities
Act of 1933.
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SUBJECT TO COMPLETION, DATED May 12, 2000
(PROSPECTUS)
1,852,427 Shares
Cephalon, Inc.
Common Stock
-------------------------------
The selling stockholders may offer these shares which they may receive upon
exercise or exchange of warrants as described in "Exercise or Exchange of the
Warrants" on page 10.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CEPH." On May 8, 2000 the last reported closing price of our common stock was
$62.44 per share.
You should read this prospectus carefully before you invest. See Risk
Factors beginning on page 4 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 May __, 2000
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TABLE OF CONTENTS
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Page
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Cephalon 3
Risk Factors 4
Use of Proceeds 10
Exercise or Exchange of the Warrants 10
Selling Stockholders 12
Plan of Distribution for the Resale of the Shares 13
About this Prospectus 14
Where You Can Find More Information 14
Forward-Looking Statements 15
Legal Opinion 15
Experts 15
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CEPHALON
Cephalon, Inc., headquartered in West Chester, PA, is a biopharmaceutical
company dedicated to the discovery, development and marketing of products to
treat neurological disorders and cancer.
We market PROVIGIL (R) (modafinil) Tablets [C-IV] for treating excessive
daytime sleepiness associated with narcolepsy. We began marketing the product in
the United States in 1999, and also market the product in the United Kingdom,
the Repulic of Ireland and Austria. In addition, we hold rights to develop and
market PROVIGIL in Central and South America, South Korea and Taiwan.
We have an ongoing clinical program to explore the utility of PROVIGIL in
treating excessive daytime sleepiness and fatigue associated with disorders
other than narcolepsy. We have completed studies using PROVIGIL in patients
suffering from fatigue associated with multiple sclerosis, and excessive daytime
sleepiness due to obstructive sleep apnea, as well as a study to demonstrate
improvement in performance and alertness in a simulated shiftwork environment.
We have initiated a study to investigate PROVIGIL's use in treating attention
deficit hyperactivity disorder in adults and a second study in obstructive sleep
apnea. Depending upon the results of our studies and discussions with the Food
and Drug Administration, or FDA, we may decide to pursue regulatory approval to
market PROVIGIL for a range of indications, each of which would require us to
successfully complete additional clinical studies. Our future success is highly
dependent on the commercial success of PROVIGIL in the United States.
In addition to our clinical program focused on PROVIGIL, we have other
significant research programs that seek to discover and develop treatments for
neurological and oncological disorders. We have formed alliances with TAP
Holdings, Inc. and Schwarz Pharma AG for the development of signal transduction
modulators to treat cancers, including prostate and pancreatic cancers. TAP has
completed two Phase I clinical studies and recently initiated a Phase II
clinical program in patients with prostate cancer, using the program's orally
administered lead molecule, CEP-701. Schwarz Pharma is expected to initiate
clinical studies in Europe in 2000 using CEP-701. We are collaborating with H.
Lundbeck A/S for the development of signal transduction modulators to treat
neurodegenerative disorders, including Parkinson's and Alzheimer's diseases.
Cephalon and Lundbeck have initiated a Phase I clinical study using the
program's orally administered lead molecule, CEP-1347. In addition, we are
collaborating with Leo Pharmaceuticals for the development of gene transcription
regulators for the treatment of Alzheimer's disease.
We also enter into collaborative commercial arrangements where we market
the products of third parties. In June 1999, we entered into an agreement with
Abbott Laboratories, Inc. to market and further develop GABITRIL(R) (tiagabine
hydrochloride), an adjunctive treatment for partial seizures associated with
epilepsy.
Our research and development efforts focus primarily on two areas:
neurodegenerative disorders and cancers. Neurodegenerative disorders are
characterized by the death of neurons (the specialized conducting cells of the
nervous system) that results in the loss of certain functions such as memory and
motor coordination. Cancers are characterized by the uncontrolled proliferation
of cells that form tumors. Our research strategy has focused on understanding
the intracellular molecular events that underlie the processes of cell
proliferation, cell survival and cell death. We utilize our technical expertise
in molecular biology and chemistry to create novel, orally active, synthetic
molecules to inhibit key targets in intracellular pathways that govern cell
proliferation, survival and death. These novel molecules are designed to (i)
enhance the survival of neurons, thereby intervening in the progression of
neurodegenerative disease or (ii) facilitate the death of tumor cells leading to
new therapies in oncology.
We believe that our technology facilitates the development of a portfolio
of potential products for the treatment of (i) neurological disorders in which
neuronal death is a primary pathology such as Parkinson's disease, Alzheimer's
disease and stroke, and (ii) oncological disorders where cellular proliferation
is a primary pathology such as prostate cancer, pancreatic cancer and a variety
of other cancers.
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<PAGE>
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.
Certain Risks Related To Our Business
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.
In December 1998, the FDA approved PROVIGIL for use by those suffering from
excessive daytime sleepiness associated with narcolepsy, and, in February 1999,
we commenced selling PROVIGIL in the United States. At our present level of
operations, we may not be able to attain profitability if physicians prescribe
PROVIGIL only for those who are diagnosed narcoleptics. Under current FDA
regulations, we are limited in our ability to promote PROVIGIL outside this
approved use. 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 approximately 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 to treat disorders other
than narcolepsy. Although some study data have been positive, we do not know
whether all of 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 some 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, could limit the
commercial success of the product and could even impact the acceptance of
PROVIGIL in the narcolepsy market. Even if the results of these studies are
positive, the impact on sales of PROVIGIL may be negligible unless we are able
to obtain FDA approval to expand the authorized use of PROVIGIL. FDA regulations
restrict our ability to communicate the results of additional clinical studies
to patients and physicians without first obtaining approval from the FDA to
expand the authorized uses for this product. As a result, it may be several
years before we have significant 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; and
. the occurrence of any side effects, adverse reactions or misuse (or
unfavorable publicity relating thereto) stemming from the use of
PROVIGIL.
We have described these and other factors in more detail below.
Our lack of experience selling our own pharmaceutical products, 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. 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, the price of competing
products and the related health care benefits to the patient.
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As PROVIGIL is used commercially, unintended side effects, adverse reactions or
incidents of misuse may occur which could result in additional regulatory
controls, and reduce sales of PROVIGIL.
Prior to 1999, the use of PROVIGIL had been limited principally to clinical
trial patients under controlled conditions and under the care of expert
physicians. We cannot predict whether the widespread commercial use of PROVIGIL
will produce undesirable or unintended side effects that have not been evident
in our clinical trials or the relatively limited broader use to date. As
PROVIGIL becomes more widely utilized by significant numbers of patients who
could take multiple medications, adverse drug interactions could occur that are
difficult to predict. Additionally, incidents of product misuse may occur. These
events, among others, could result in additional regulatory controls, including
withdrawal of the product from the market.
The efforts of government entities and third party payors to contain or reduce
the costs of health care may adversely 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 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. If third party payors focus their
cost control efforts on PROVIGIL, this could limit the commercial success of the
product.
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, could cause us to reduce prices to compete
successfully, and could 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 extend the term of this patent until November 18, 2001.
In addition, we own a U.S. patent covering the particle size of modafinil that
issued in 1997 and expires on October 6, 2014. However, we may 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
disorders. 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 or we are unable to provide or obtain
adequate supplies of PROVIGIL), 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. We maintain an inventory of modafinil compound to
protect against supply disruptions and are qualifying an additional manufacturer
of finished product.
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We must comply with all applicable regulatory requirements of the FDA and
foreign authorities, including current Good Manufacturing Practice, or cGMP,
regulations. The facilities used to manufacture, store and distribute our
products are subject to inspection by regulatory authorities at any time to
determine compliance with regulations. 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.
A non-active ingredient used in PROVIGIL is no longer manufactured or
commercially available. At anticipated levels of demand, we have several years
supply of this ingredient. We have prepared a new formulation of PROVIGIL that
does not include the now unavailable ingredient; however, the introduction of
any such new formulation requires regulatory approval. If we are unable to
obtain approval for a new formulation, or if demand for the product were to
significantly 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 rely on several third parties in the United States to 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
could reduce sales revenue.
Our sales of PROVIGIL and related financial results will fluctuate and these
fluctuations may adversely affect our stock price.
A number of analysts and investors who follow our stock have developed models to
attempt to forecast future PROVIGIL sales and have established earnings
expectations based upon those models. Forecasting revenue is difficult;
especially when there is little commercial history and when the level of market
acceptance of the product is uncertain. Forecasting is further complicated by
the difficulties in estimating stocking levels at pharmaceutical wholesalers and
at retail pharmacies and in estimating potential product returns. As a result it
is likely that there will be significant fluctuations in revenues, which may not
meet with market expectations and which may adversely affect our stock price.
Other factors which may cause our financial results to fluctuate include the
cost of PROVIGIL sales, achievement and timing of research and development
milestones, co-promotion and other collaboration revenues, cost and timing of
clinical trials, marketing and other expenses and manufacturing or supply
disruption.
We anticipate that we will incur additional losses.
To date, we have not been profitable and our accumulated deficit was
approximately $347 million at December 31, 1999. Our losses have resulted
principally from costs incurred in research and development, including clinical
trials, and from selling, general and administrative costs associated with our
operations. We expect to continue to incur losses until such time as product
revenue from PROVIGIL or other products and product candidates exceed expenses
of operating our business. We seek to attain profitability, but we cannot be
sure that we will ever achieve product revenues from PROVIGIL or from any of our
other product candidates sufficient for us to attain this objective. We cannot
be sure that our collaborators or we will obtain required regulatory approvals,
or successfully develop, commercialize, manufacture and market any other product
candidates.
The results and timing of future clinical trials cannot be predicted and future
setbacks may materially affect our business.
We must demonstrate through preclinical testing and clinical trials that a
product candidate is safe and efficacious. The results from preclinical testing
and early clinical trials may not be predictive of results obtained in
subsequent clinical trials, and we cannot be sure that these clinical trials
will demonstrate the safety and efficacy necessary to obtain regulatory approval
for any product candidates.
A number of companies in the biotechnology and pharmaceutical industries have
suffered significant setbacks in advanced clinical trials, even after obtaining
promising results in earlier trials. In addition, certain clinical trials are
conducted with patients having the most advanced stages of disease. During the
course of treatment, these patients often
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<PAGE>
die or suffer other adverse medical effects for reasons that may not be related
to the pharmaceutical agent being tested. Such events can hurt the statistical
analysis of clinical trial results.
The completion of clinical trials of our product candidates may be delayed by
many factors. One such factor is the rate of enrollment of patients. Neither we
nor our collaborators can control the rate at which patients present themselves
for enrollment, and we cannot be sure that the rate of patient enrollment will
be consistent with our expectations or be sufficient to enable clinical trials
of our product candidates to be completed in a timely manner. Any significant
delays in, or termination of, clinical trials of our product candidates may have
a material adverse effect on our business.
We cannot be sure that we will be permitted by regulatory authorities to
undertake additional clinical trials for any of our product candidates, or that
if such trials are conducted, any of our product candidates will prove to be
safe and efficacious or will receive regulatory approvals. Any delays in or
termination of these clinical trial efforts may have a material adverse effect
on our business.
Our research and development activities may not result in any additional
pharmaceutical products, which may adversely affect our business.
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 larger
multinational pharmaceutical companies. Moreover, even if we undertake these
activities in an effective and efficient manner, regulatory approval for the
sale of new pharmaceutical products remains highly uncertain since, in our
industry, the majority of compounds fails to enter clinical studies and the
majority of therapeutic candidates entering clinical studies fails to be
commercialized.
Our research and 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 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. One of them, Kyowa Hakko,
has agreed with us to modify the related supply agreement so that we will be
responsible for supplying the compounds under development. We have selected
another manufacturer to produce these compounds and Kyowa Hakko is working with
us to transfer the applicable manufacturing technology to this third party. We
cannot be certain that this 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 experience intense competition in our fields of interest, which may adversely
affect our business.
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Large and small companies, academic institutions, governmental agencies, and
other public and private research organizations conduct research, seek patent
protection, and establish collaborative arrangements for product development in
competition with us. Products developed by any of these entities may compete
directly with those we develop or sell. Many of these companies and institutions
have substantially greater capital resources, research and development staffs
and facilities than us, and substantially greater experience in conducting
clinical trials, obtaining regulatory approvals and manufacturing and marketing
pharmaceutical products. These entities represent significant competition for
us. In addition, competitors who are developing products for the treatment of
neurological or oncological disorders might succeed in developing technologies
and products that are more effective than any that we develop or sell or that
would render our technology and products obsolete or noncompetitive. Competition
and innovation from these or other sources potentially could materially
adversely affect any sales of products that might be developed or are currently
being sold by us or make them obsolete. Advances in current treatment methods
also may adversely affect the market for such products.
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 PTO, 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.
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 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 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.
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The prospects for regulatory approval of our drug candidate MYOTROPHIN, continue
to be very uncertain in the United States. We do not believe that the conditions
for regulatory approval imposed by the FDA can be met without conducting an
additional Phase III study, and we do not intend to conduct such a study. Even
if we chose to conduct an additional study, the results of a new study may not
be sufficient to obtain regulatory approval. If MYOTROPHIN is not approved for
the treatment of ALS, then it is not likely that we would pursue approval for
the use of MYOTROPHIN to treat other indications. Additionally, if we do not
obtain approval of MYOTROPHIN for ALS or pursue approval for other indications,
rights to the product may revert back to Cephalon Clinical Partners, L.P.
We are involved in legal proceedings that, if adversely adjudicated or settled,
could materially impact our financial condition.
In November 1999, we received a federal grand jury subpoena in connection with
an investigation under the supervision of the Office of Consumer Litigation of
the U.S. Department of Justice. The grand jury also issued subpoenas to certain
of our former and current employees. We believe that the investigation relates
to the release of certain lots of MYOTROPHIN used in clinical trials and related
reports filed with the FDA during the period 1994-96. We have not been
identified as a target of the investigation, and we are cooperating with this
inquiry. We cannot predict the outcome of the investigation.
In August 1999, the U.S. District Court for the Eastern District of Pennsylvania
entered a final order approving the settlement of a class action in which
plaintiffs alleged that statements made about the results of certain clinical
studies of MYOTROPHIN were misleading. A related complaint has been filed with
the Court by a small number of plaintiffs who decided not to participate in the
settlement. This related complaint alleges that we are liable under common law
for misrepresentations concerning the results of the MYOTROPHIN clinical trials,
and that we and certain of our current and former officers and directors are
liable for the actions of persons who allegedly traded in our common stock on
the basis of material inside information. We believe that we have valid defenses
to all claims raised in this action, and we have filed a motion to dismiss these
claims which is pending with the Court. Moreover, even if there is a judgment
against us, we do not believe it will have a material negative effect on our
financial condition or results of operations.
The price of our common stock has been and may continue to be highly volatile.
The market price and trading volume of shares of our common stock are volatile,
and we expect it to continue to be volatile for the foreseeable future. For
example, during the period January 1, 1999 through May 8, 2000, our common stock
traded at a high closing price of $72.31 and a low closing price of $7.50.
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, external events, such as news concerning our
competitors, changes in government regulations that may impact the biotechnology
or pharmaceutical industries or flows of investor funds into or out of our
industry, also are likely to affect the price of our common stock.
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 not readily
transferable to other personnel. We do not maintain "key man" life insurance on
any of our employees.
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 hazardous,
infectious and radioactive materials that could be hazardous to human health,
safety or the environment. We store these materials and various wastes
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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 our safety procedures for handling and disposing of these
materials comply with federal, state and local laws and regulations, but the
risk of accidental injury or contamination from these materials cannot be
eliminated. In the event of an accident, we could be held liable for any
resulting damages.
Anti-takeover provisions may deter a third party from acquiring us, limiting our
stockholders' ability to profit from such a transaction.
Our Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock, $0.01 par value, of which 1,000,000 have been reserved for
issuance in connection with our stockholder rights plan, and to determine the
price, rights, preferences and privileges of those shares without any further
vote or action by our stockholders. Our stockholder rights plan could have the
effect of making it more difficult for a third party to acquire a majority of
our outstanding voting stock.
We are subject to the anti-takeover provisions of Section 203 of the Delaware
Corporation Law, which prohibit us from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person becomes an interested stockholder, unless
the business combination is approved in a prescribed manner. The application of
Section 203 could have the effect of delaying or preventing a change of control
of Cephalon. We also have adopted a "poison pill" rights plan that will dilute
the stock ownership of an acquirer of our stock upon the occurrence of certain
events. Section 203, the rights plan, and the provisions of our certificate of
incorporation, our bylaws and Delaware corporate law, may have the effect of
deterring hostile takeovers or delaying or preventing changes in control of our
management, including transactions in which stockholders might otherwise receive
a premium for their shares over then current market prices.
USE OF PROCEEDS
We will use the proceeds, if any, from the exercise of the note warrants and
the P&P warrants to:
. support the ongoing development and marketing of PROVIGIL; and
. support our other research and development programs.
We will not receive any proceeds from the exchange of the note warrants. We
will not receive any proceeds from the resale of the note warrant shares or the
P&P warrant shares.
EXERCISE OR EXCHANGE OF THE WARRANTS
The selling stockholders may offer up to 1,827,427 shares of our common stock
issuable upon the exercise or exchange 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 we
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.
-10-
<PAGE>
The note warrants permit the holders of the note warrants to purchase up to
1,827,427 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. As originally issued, holders
of the Class B Warrants could 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. In December 1999 in connection with the restructuring of our
revenue sharing notes, the Class B Warrants were amended to provide for
immediate exercise.
On March 7, 2000, we entered into a warrant exchange agreement with certain
holders of the note warrants providing for the exchange of note warrants to
purchase up to 640,000 shares of our common stock for 544,427 shares of our
common stock. This exchange ratio permitted the note warrant holders who were
parties to the warrant exchange agreement to receive such number of shares they
would have received if the terms of the warrants had provided for a "cashless
exercise."
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 not covered by the warrant exchange
agreement and the number of P&P warrant shares are each 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
not covered by the warrant exchange agreement and each P&P warrant share is
subject to a corresponding adjustment.
-11-
<PAGE>
SELLING STOCKHOLDERS
On March 1, 1999, we issued (i) note warrants to purchase up to 1,827,427 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 and the terms of the warrant exchange agreement,
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 or exchange
of the note warrants and the P&P warrants, the selling stockholders may offer or
sell the shares received upon the exercise or exchange 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>
Maximum Beneficial Ownership
Number of Number of After Resale of Shares
Shares Shares ------------------------
Name of Beneficially Being Number of
Selling Stockholder Owned(1) Offered Shares Percent
-------------------- -------------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Delta Opportunity Fund, Ltd. 464,000 464,000 0 -
Delta Opportunity Fund 176,000 176,000 0 -
(Institutional), LLC
DLJ Capital Corp. (2) (3) 2,413 2,413 0 -
DLJ ESC II, L.P. (2) 24,320 24,320 0 -
The Kaufmann Fund, Inc. 980,000 640,000 500,000 *
Sprout Capital VIII, L.P. (2) 278,443 278,443 0 -
Sprout Growth II, L.P. (2) 225,544 225,544 0 -
Sprout Venture Capital, L.P. (2) 16,707 16,707 0 -
Petkevich & Partners 25,500 25,000 500 *
</TABLE>
_____________
* Less than 1%
(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
or exercisable within 60 days of May 9, 2000 are deemed outstanding and to be
beneficially owned by the selling stockholders holding such options or warrants.
(2) Shares represent the actual number of shares received by the selling
stockholders in exchange for the cancellation of their warrants pursuant to the
warrant exchange agreement dated March 7, 2000.
(3) Previously listed as DLJ Capital Group.
-12-
<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
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<PAGE>
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.
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, 1999, as
amended;
. Our Current Reports on Form 8-K filed with the SEC on January 5, 2000; 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 E. Osborn, Senior Vice President
and General Counsel, Cephalon, Inc., 145 Brandywine Parkway, West Chester, PA
19380, (610) 344-0200.
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<PAGE>
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
4 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.
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.
-15-
<PAGE>
- -------------------------------------------------------------------------------
1,827,427 Shares
Cephalon, Inc.
Common Stock
_______________
PROSPECTUS
_______________
May __, 2000
1
<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.
<TABLE>
<S> <C>
Commission fee.............................. $ 5,450.00
Nasdaq listing fee.......................... $ 17,500.00
Legal fees, accounting fees and expenses.... $300,000.00
Total............................. $322,950.00
===========
</TABLE>
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.
Item 16. List of Exhibits
The exhibits filed as part of this registration statement are as follows:
<PAGE>
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
post-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;
II-2
<PAGE>
(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 (1)(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.
(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 Post-Effective Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned thereunto duly authorized, in West
Chester, Pennsylvania, on this 12th day of May 2000.
CEPHALON, INC.
By: /s/ Frank Baldino, Jr.
---------------------------------
Frank Baldino, Jr., Ph.D.
President, Chief Executive Officer and
Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 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. President, Chief Executive Officer May 12, 2000
--------------------------- Director (Principal executive
Frank Baldino, Jr., Ph.D officer)
By: * Director May 12, 2000
---------------------------
William P. Egan
By: * Director May 12, 2000
---------------------------
Robert J. Feeney, Ph.D.
By: * Director May 12, 2000
---------------------------
Martyn D. Greenacre
By: * Director May 12, 2000
---------------------------
Kevin E. Moley
By: * Director May 12, 2000
---------------------------
David R. King
By: * Director May 12, 2000
---------------------------
Horst Witzel, Dr.-Ing.
By: /s/ J. Kevin Buchi Senior Vice President, Finance and May 12, 2000
--------------------------- Chief Financial Officer (Principal
J. Kevin Buchi financial and accounting officer)
</TABLE>
II-4
<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 17, 2000
included in Cephalon, Inc.'s Form 10-K for the year ended December 31, 1999 and
to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
May 12, 2000
