Cephalon Concludes All Outstanding Federal and State Government Investigations into the Company's Sales and Promotional Practices

Tuesday, September 30, 2008 General News
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FRAZER, Pa., Sept. 29 Cephalon, Inc.(Nasdaq: CEPH) announced today it has finalized a previously announcedagreement in principle with the U.S. Attorney's Office for the EasternDistrict of Pennsylvania, the U.S. Department of Justice and various otherfederal agencies. The Company also reached separate agreements with theAttorneys General of the states of Connecticut and Massachusetts to settlerelated investigations into the company's sales and promotional practices.The initial investigations began in 2004 and involved three of the company'snine proprietary products in the United States -- Actiq(R) (oral transmucosalfentanyl citrate) [C-II], Provigil(R) (modafinil) Tablets [C-IV], andGabitRil(R) (tiagabine hydrochloride). Cephalon fully cooperated with allgovernmental entities throughout these investigations.

Under the previously disclosed terms of the federal settlement, Cephalonwill pay the $425 million reserved in 2007 plus an estimated $12 million inaccrued interest expense, plead guilty to a single misdemeanor violation ofthe U. S. Food, Drug, and Cosmetic Act, and enter into a five-year CorporateIntegrity Agreement (CIA) with the Office of the Inspector General of the U.S.Department of Health and Human Services. The guilty plea is subject toapproval by the U.S. District Court for the Eastern District of Pennsylvania.

"We are pleased to have these long-standing matters behind us, whilepreserving our ability to participate in all federal and state health careprograms, thereby maintaining the access of patients in those programs to ourmedications," stated Jerry Pappert, Executive Vice President and GeneralCounsel, and a former Attorney General of the Commonwealth of Pennsylvania.

"We believe our existing compliance policies and procedures alreadyaddress the majority of the requirements outlined in the CIA and that thestrong compliance infrastructure now in place has improved the accountabilityof our employees and the transparency of our actions," said Valli Baldassano,Executive Vice President and Chief Compliance Officer. A copy of the CIA canbe found at: http://oig.hhs.gov/fraud/cia/index.html.

Cephalon also settled its two outstanding state government investigationsfor a total of $6.85 million. In its settlement with the Connecticut AttorneyGeneral and Commissioner of Consumer Protection, Cephalon agreed to a $6.15million payment, which includes a contribution of $3.8 million to theConnecticut Department of Public Health to fund state cancer initiatives and$200,000 to fund an electronic prescription monitoring program. In addition,the company agreed to a payment of $700,000 to settle an investigation withthe Attorney General of the Commonwealth of Massachusetts. Four hundred fifty($450) thousand dollars of that payment will be used to benefit consumers inMassachusetts and for comprehensive cancer initiatives.

"We are particularly satisfied that the largest share of the payments madeto settle the state Attorney General investigations are for programs andinitiatives consistent with our commitment to patients," added CephalonGeneral Counsel Pappert. "These contributions are aligned with our commitmentto the oncology community and our emerging oncology business."

Cephalon has posted a set of Frequently Asked Questions about thesesettlements on its website at http://www.cephalon.com/media/on-the-record/

Cephalon, Inc.

Founded in 1987, Cephalon, Inc. is an international biopharmaceuticalcompany dedicated to the discovery, development and commercialization of manyunique products in four core therapeutic areas: central nervous system, pain,oncology and addiction. A member of the Fortune 1000, Cephalon currentlyemploys approximately 3,000 people in the United States and Europe. U.S. sitesinclude the company's headquarters in Frazer, Pennsylvania, and offices,laboratories or manufacturing facilities in West Chester, Pennsylvania, SaltLake City, Utah, and suburban Minneapolis, Minnesota. The company's Europeanheadquarters are located in Maisons-Alfort, France.

The company's proprietary products in the United States include: AMRIX(R)(cyclobenzaprine hydrochloride extended-release capsules), TREANDA(R)(bendamustine hydrochloride) for Injection, FENTORA(R) (fentanyl buccaltablet) [C-II], PROVIGIL, TRISENOX(R) (arsenic trioxide) injection,VIVITROL(R) (naltrexone for extended-release injectable suspension), GABITRIL,NUVIGIL(TM) (armodafinil) Tablets [C-IV] and ACTIQ. The company also marketsnumerous products internationally. Full prescribing information on its U.S.products is available at http://www.cephalon.com or by calling 1-800-896-5855.

In addition to historical facts or statements of current condition, thispress release may contain forward-looking statements. Forward-lookingstatements provide Cephalon's current expectations or forecasts of futureevents. These may include statements regarding anticipated approval by theU.S. District Court of the guilty plea; continued ability to participate ingovernment health care programs; expectations regarding the company'scompliance programs and policies; anticipated scientific progress on itsresearch programs, development of potential pharmaceutical products,interpretation of clinical results, prospects for regulatory approval,manufacturing development and capabilities, market prospects for its products,sales and earnings guidance, and other statements regarding matters that arenot historical facts. You may identify some of these forward-lookingstatements by the use of words in the statements such as "anticipate,""estimate," "expect," "project," "intend," "plan," "believe" or other wordsand terms of similar meaning. Cephalon's performance and financial resultscould differ materially from those reflected in these forward-lookingstatements due to general financial, economic, regulatory and politicalconditions affecting the biotechnology and pharmaceutical industries as wellas more specific risks and uncertainties facing Cephalon such as those setforth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securitiesand Exchange Commission. Given these risks and uncertainties, any or all ofthese forward-looking statements may prove to be incorrect. Therefore, youshould not rely on any such factors or forward-looking statements.Furthermore, Cephalon does not intend to update publicly any forward-lookingstatement, except as required by law. The Private Securities Litigation ReformAct of 1995 permits this discussion.

SOURCE Cephalon, Inc.

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