Cephalon agrees to purchase Salmedix

Cephalon Inc., which makes the Actiq cancer pain medicine and several other products in Salt Lake City, agreed Thursday to buy Salmedix Inc. for $160 million in cash to gain the Treanda lymphoma treatment.

Cephalon said it will make additional payments of as much as $40 million to closely held Salmedix's shareholders as Treanda meets certain goals.

Treanda is sold in Europe, where Astellas Pharma Inc. has rights to the product, Robert Grupp, a spokesman for Cephalon, said Thursday.

The acquisition will reduce 2005 profit by as much as 15 cents a share, Cephalon said. The company, based in Frazer, Pa., is counting on Treanda to help it expand into the market for blood-cancer treatments. Cephalon also is developing a drug to treat a form of leukemia, Chief Executive Frank Baldino said in a statement.

Treanda is being tested in the United States as a treatment for non-Hodgkin's lymphoma, a form of blood cancer. The tests are in the second of three phases typically required for U.S. Food and Drug Administration approval. Cephalon will have rights to the drug in the United States and Canada.

Cephalon announced the purchase after U.S. markets closed. The company's stock was unchanged at $45.13 Thursday on the Nasdaq Stock Market after the close of regular trading. The shares have dropped 11 percent this year.

The company on May 3 forecast a 2004 profit, excluding some items, of $2.80 to $2.95 a share. On that basis, Cephalon earned $2.42 a share in 2004.

Deutsche Bank Securities Inc. was Cephalon's financial adviser on the acquisition, and SG Cowen & Co. advised San Diego-based Salmedix.