ANALYSIS OF PROPOSED CONSENT ORDER
TO AID PUBLIC COMMENT
The Federal Trade Commission has accepted, subject to final approval, an Agreement
Containing Consent Orders (“Consent Agreement”) from Cephalon, Inc. and Cima Labs, Inc.,
which is designed to remedy the anticompetitive effects of the acquisition of Cima by Cephalon.
Under the terms of the proposed Consent Agreement, Cephalon would be required to grant to a
third party company, a fully paid-up, irrevocable license to make and sell a generic equivalent of
its breakthrough cancer pain (“BTCP”) drug Actiq in the United States.
The proposed Consent Agreement has been placed on the public record for thirty days for
receipt of comments by interested persons. Comments received during this period will become
part of the public record. After thirty days, the Commission will again review the proposed
Consent Agreement and the comments received, and will decide whether it should withdraw
from the proposed Consent Agreement or make final the Decision and Order (“Order”).
Pursuant to an Agreement and Plan of Merger dated November 3, 2003, between
Cephalon and Cima, Cephalon proposes to acquire 100 percent of the issued and outstanding
shares of Cima in a stock-for-stock transaction valued at approximately $515 million. Cephalon
also intends to pay consideration such that each issued and outstanding share of Cima common
stock will be converted into the right to receive $34.00 in cash. The Commission’s Complaint
alleges that the proposed acquisition, if consummated, would constitute a violation of Section 7
of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission
Act, as amended, 15 U.S.C. § 45, in the market for prescription drug products indicated for the
treatment of BTCP. The proposed Consent Agreement will remedy the alleged violations by
replacing the lost potential competition that would result from the merger in this market.
Drugs for the treatment of BTCP help to reduce or eliminate the spikes of intense pain