Analysts see higher drug sales for Cephalon

Cephalon has somewhat shifted its focus to Amrix and Treanda following a negative recommendation from a Food and Drug Administration panel on the pain tablet Fentora. The drug is approved to treat severe pain flare-ups in cancer patients taking certain painkillers.

In May, an FDA panel of outside experts voted 17-3 against expanding the drug's use to non-cancer patients, amid fears of potential misuse.

Freidman, Billings, Ramsey analyst David Amsellem said Amrix could gain a larger portion of the muscle relaxant market based on results of a recent survey of physicians. The majority of doctors polled said once-daily Amrix would ultimately replace 5 percent of prescriptions for McNeil-PPC Inc.'s Flexeril and generic versions, which have to be taken three or four times a day.

A smaller number surveyed put that figure at about 10 percent.

"In the near term, with prescriptions tracking to around 62,000 to 63,000 in the second quarter, up from around 34,000 in the first quarter, we believe that sales of $16 million to $17 million for the quarter are reasonable," he said in a note to investors Friday.

He added that peak sales could top $700 million as a newly issued patent on the drug extends its exclusivity on the market. Amsellem reaffirmed a "Outperform" rating with a $95 price target on Cephalon stock.

Meanwhile, cancer drug Treanda will likely continue gaining favor and use as an initial treatment for lung cancer and non-Hodgkin's lymphoma, said Leerink Swann & Co. analyst Gary Nachman, also citing a survey of physicians.

"Treanda is already a first-line treatment for 24 percent of lung cancer patients and 17 percent of non-Hodgkin's lymphoma patients, with an expected doubling by 2012," he said in a note to investors.

The drug is used as a secondary treatment for non-Hodgkin's lymphoma, but the company expects FDA approval for initial use this year.