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Cephalon Grows Globally

Frazer, PA – Cephalon Inc., which cracked the $2 billion sales mark for the first time last year, is about to expand its global footprint in a big way.

Cephalon signed an agreement to buy Mepha AG, a Swiss pharmaceutical company that markets generic and branded generic products, for $590 million.

Mepha, a privately owned company that generated sales of about $378 million last year, manufactures and markets more than 120 products in 50 countries and has another 50 chemical compounds it plans to launch over the next five years.

“This is a big, transforming event for us from a global perspective,” said Frank Baldino Jr., Cephalon’s chairman and CEO. He said the acquisition, expected to close by April 1, will expand the company’s ability to serve global markets and “reach patients in new territories for the first time.”

Baldino has had growing Cephalon’s European operations on his “to do” list for several years. Prior to the Mepha deal, the company was selling 32 products overseas, including some branded generics, and taking in about $400 million in sales.

The Mepha deal will double that revenue figure, add 800 employees and provide Cephalon with a stronger presence in the Middle East, eastern Europe and Africa.

“Now we can truly say we have an international operation,” Baldino said. “That is important as we pursue other acquisition opportunities.”

Baldino said among his next targets is expansion into China, where the company has already started the governmental regulatory review process for certain undisclosed products.

“We really want to move aggressively into that arena,” he said. “We are looking at opportunities there. We’d like to acquire a company or series of companies that are profitable that we can use as a platform to launch a number of products we have today.”

In a conference call last week with stock analysts, Baldino noted the European pharmaceutical business is largely branded generic and generic. “The generic world of Europe is completely different than the U.S. world,” he said. “The pricing opportunities are greater. The longevity of the products are greater.”

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Kristen Fitch

Senior Director, Marketing