The Truth in Corporate Justice LLC ("TCJ") (http://www.worldwidetree.org/) is investigating Cephalon Inc. for potential securities fraud. In the last 38 days, Cephalon insiders have sold over $40 million in company stock. Additionally, they have sold over $40 million in "planned sales". The stock at this time is trading below $62 per share---a drop of approximately 25% in the last two weeks.
THE TRUTH IN CORPORATE JUSTICE LLC INVESTIGATES CEPHALON INC. FOR POTENTIAL SECURITIES LAWS VIOLATIONS: IN LAST 38 DAYS OVER $40 MILLION IN INSIDER SALES
PERHAPS IT WAS CEPHALON THAT WAS EXPERIENCING AN ATTENTION DEFICIT DISORDER WHEN THESE SALES OCCURRED--PLANNED SALES NOT INCLUDED IN CALCULATION
Santa Monica, California--March 27, 2006 - - - The Truth in Corporate Justice LLC ("TCJ") (http://www.worldwidetree.org/) is investigating Cephalon Inc. for potential securities fraud. In the last 38 days, Cephalon insiders have sold over $40 million in company stock. Additionally, they have sold over $40 million in "planned sales". The stock at this time is trading below $62 per share---a drop of approximately 25% in the last two weeks.
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The TCJ announces that it is investigating Cephalon Inc. (NASDAQ: CEPH) and recent material problems and disclosures about its drug Sparlon. Cephalon's stock price plunged on Friday when it was disclosed that a regulatory panel voted against recommending approval of that drug, used to treat attention deficit hyperactivity disorder, or ADHD. Cephalon shares closed down 13% at $63.80 after hitting a session low of $62.45. Cephalon has stated that a Food and Drug Administration advisory panel had voted against the drug Sparlon, stating additional clinical data on the safety of the drug was needed before it could be approve for ADHD in children and adolescents. The committee was particularly concerned that Sparlon could trigger severe skin reactions, including the potentially life-threatening condition known as Stevens Johnson Syndrome.
"We are obviously disappointed with the recommendation of the advisory committee," said Paul Blake, Cephalon's vice president for regulatory operations, in a news release. "We will continue our discussions with the FDA to determine the next steps in the review of this drug application." As a result of the rejection, Cephalon said it's lowering its 2006 sales forecast by $100 million, to a range of $1.45 billion to $1.5 billion. The company's outlook for adjusted earnings remains unchanged at $3.80 to $4 a share. Since March 13, 2006, the stock has gone from over $82 per share to under $64 per share. More interesting, insiders have sold conservatively well over $40 million in stock in the past 38 days. This figure does NOT include "planned sales". Sparlon, known generically as modafinil, is already on the market to treat narcolepsy under the brand name Provigil. The FDA issued Cephalon an approvable letter for Sparlon for ADHD in October 2005, stating it believed the drug could be approved if more safety data were provided. However, the FDA usually accepts the advice of an advisory panel.THE ROOTS HAVE TAKEN HOLD
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