Filed Pursuant to Rule 424(b)(3)
                                                Registration No. 333-59410


                                   PROSPECTUS

                                 750,000 SHARES

                                 CEPHALON, INC.

                                  COMMON STOCK


      The shares of common stock covered by this prospectus are being offered by
Chiron Corporation. We will not receive any of the proceeds from the sale of the
shares by Chiron.

      Our common stock is quoted in the Nasdaq National Market under the symbol
"CEPH." On April 23, 2001, the last reported closing price of our common stock
was $53.55 per share.

                              --------------------

YOU SHOULD READ THIS PROSPECTUS CAREFULLY BEFORE YOU INVEST. PLEASE REFER TO THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION
OF THE MATERIAL RISKS INVOLVED IN INVESTING IN THE SHARES.

                              --------------------

      NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                              --------------------


                 THE DATE OF THIS PROSPECTUS IS MAY 17, 2001.




                                TABLE OF CONTENTS

                                                                           PAGE



ABOUT THIS PROSPECTUS........................................................1

CEPHALON, INC................................................................1

RISK FACTORS.................................................................2

FORWARD-LOOKING STATEMENTS..................................................11

USE OF PROCEEDS.............................................................11

SELLING STOCKHOLDER.........................................................11

PLAN OF DISTRIBUTION........................................................12

LEGAL OPINION...............................................................13

EXPERTS.....................................................................13

WHERE YOU CAN FIND MORE INFORMATION.........................................13


                                       i


                              ABOUT THIS PROSPECTUS

      This prospectus contains information about our Company and the shares of
our common stock being offered by this prospectus. In addition, as described
below in the section entitled "Where You Can Find More Information," we have
filed and plan to continue filing other documents with the SEC that contain
information about us and our common stock. These other documents are
incorporated by reference in this prospectus. Before you decide to invest in
common stock being offered by this prospectus, you should read this prospectus
and the other documents we file with the SEC.

      You should only rely on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information different from that contained or incorporated by reference in this
prospectus. Chiron is offering to sell, and seeking offers to buy, shares of
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of common stock.

                                 CEPHALON, INC.

      Cephalon is an international biopharmaceutical company focused on the
discovery, development and marketing of products to treat sleep disorders,
neurological disorders, cancer and pain. In addition to an active research and
development program, we market three products in the United States and eight
products in various countries in Europe.

      In the United States, we maintain our corporate and research and
development headquarters and market three products: PROVIGIL(R) (modafinil)
Tablets [C-IV] for treating excessive daytime sleepiness associated with
narcolepsy, ACTIQ(R) (oral transmucosal fentanyl citrate) [C-II] for the
management of breakthrough cancer pain in opioid tolerant patients and
GABITRIL(R) (tiagabine hydrochloride) for the treatment of partial seizures
associated with epilepsy. We market these products through our two specialty
sales forces: the first, numbering approximately 130 representatives, details
PROVIGIL and GABITRIL to neurologists, psychiatrists and sleep specialists; the
second, numbering approximately 50 representatives, details ACTIQ to oncologists
and pain specialists.

      In the United Kingdom, we market PROVIGIL and five other products,
including TEGRETOL(R) (carbamazepine), a treatment for epilepsy, and RITALIN(R)
(methylphenidate), a treatment for attention deficit hyperactivity disorder
(ADHD). We also market other products in France, Germany, Austria and
Switzerland. In support of our European sales and marketing efforts, we have
established a European sales and marketing organization comprised of
approximately 30 persons.

      Much of our research and development is focused on expanding the uses for
PROVIGIL, ACTIQ and GABITRIL. We have an ongoing clinical program to explore the
utility of PROVIGIL in treating excessive daytime sleepiness and fatigue
associated with disorders other than narcolepsy as well as to explore its
utility in the treatment of certain psychiatric disorders. We have completed
initial clinical studies of PROVIGIL in patients suffering from fatigue
associated with multiple sclerosis, in patients suffering from excessive daytime
sleepiness due to obstructive sleep apnea, and in patients suffering from
tiredness and decreased alertness in a simulated shift work environment. Based
on positive results obtained in such studies and with the objective of marketing
PROVIGIL to a broader population suffering from excessive sleepiness, we have
initiated two additional studies to investigate the use of PROVIGIL to treat
excessive sleepiness in patients with obstructive sleep apnea and in shift
workers. We also are conducting a number of exploratory studies with all three
products to determine additional populations of patients who could benefit from
therapy with these products.



      In addition to our clinical programs focused on our marketed products, we
have other significant research programs that seek to discover and develop
treatments for neurological and oncological disorders. With respect to
neurology, we have a program with a molecule, CEP-1347, that we are preparing to
enter into Phase 2 clinical studies for the treatment of Parkinson's disease. In
the cancer area, we have a program with a lead molecule, CEP-701, that is
currently in Phase 2 clinical studies to treat prostate and pancreatic cancer,
and a program with a molecule in late preclinical studies for the treatment of
solid tumors. As part of our corporate strategy, we seek to share the risk of
our research and development activities with corporate partners and, to that
end, we have entered into a number of agreements to share the costs of
developing and commercializing these compounds.

      Our mailing address is 145 Brandywine Parkway, West Chester, PA 19380. The
telephone number of our principal executive offices is (610) 344-0200.

                                  RISK FACTORS

      Any investment in shares of our common stock involves a high degree of
risk. You should carefully consider the following risk factors, together with
the other information presented in this prospectus, before deciding to invest in
the shares of common stock covered by this prospectus.

DURING THE NEXT SEVERAL YEARS WE WILL BE VERY DEPENDENT UPON THE COMMERCIAL
SUCCESS OF OUR PRODUCTS, ESPECIALLY PROVIGIL, AND WE MAY NOT BE ABLE TO
CONSISTENTLY AND MEANINGFULLY INCREASE SALES OF THESE PRODUCTS DURING THIS
PERIOD, OR TO ATTAIN PROFITABILITY ON THE BASIS OF SUCH SALES.

      The commercialization of our pharmaceutical products involves a number
of significant challenges. In particular, our ability to meaningfully
increase sales depends, in large part, on the success of our clinical
development programs, and our sales and marketing efforts to physicians,
patients and third-party payors. A number of factors could impact these
efforts, including our ability to demonstrate clinically that our products
have utility beyond current indications, our limited financial resources and
sales and marketing experience relative to our competitors, perceived
differences between our products and those of our competitors, the
availability and level of reimbursement of our products by third-party
payors, incidents of adverse reactions, side effects or misuse of our
products and the unfavorable publicity that could result, or the occurrence
of manufacturing, supply or distribution disruptions.

      Ultimately, our efforts may not prove to be as effective as the efforts
of our competitors. In the United States and elsewhere, our products face
significant competition in the marketplace. The conditions that our products
treat, and some of the other disorders for which we are conducting additional
studies, are currently treated with several drugs, many of which have been
available for a number of years or are available in inexpensive generic
forms. Thus, we will need to demonstrate to physicians, patients and third
party payors that the cost of our products is reasonable and appropriate in
light of their safety and efficacy, the price of competing products and the
related health care benefits to the patient. Even if we are able to increase
sales over the next several years, we cannot be sure that such sales and
other revenue will reach a level at which we will attain profitability.

WE MAY BE UNSUCCESSFUL IN OUR EFFORTS TO EXPAND THE NUMBER AND SCOPE OF
AUTHORIZED USES OF PROVIGIL, WHICH WOULD HAMPER SALES GROWTH AND MAKE IT MORE
DIFFICULT TO SUSTAIN PROFITABILITY.

      PROVIGIL is approved for sale in the United States and abroad for use by
those suffering from excessive daytime sleepiness associated with narcolepsy.
Under current FDA regulations, we are limited in our ability to promote the use
of PROVIGIL outside of this approved indication. The market for the use of
PROVIGIL in narcolepsy patients is relatively small; it is limited to
approximately 125,000 persons in the United States, of which we estimate
approximately 50,000 seek treatment from a physician.


                                       2


      We have initiated clinical studies to examine whether or not PROVIGIL is
effective and safe when used to treat disorders other than narcolepsy. Although
some study data has been positive, additional studies in these disorders will be
necessary before we can apply to expand the authorized uses of PROVIGIL. We do
not know whether these studies will demonstrate safety and efficacy, or if they
do, whether we will succeed in receiving regulatory approval to market PROVIGIL
for additional disorders. If the results of some of these studies are negative,
or if adverse experiences are reported in these clinical studies or otherwise in
connection with the use of PROVIGIL by patients, this could undermine physician
and patient comfort with the product, limit the commercial success of the
product and diminish the acceptance of PROVIGIL in the narcolepsy market. Even
if the results of these studies are positive, the impact on sales of PROVIGIL
may be minimal unless we are able to obtain FDA approval to expand the
authorized use of PROVIGIL. FDA regulations restrict our ability to communicate
the results of additional clinical studies to patients and physicians without
first obtaining approval from the FDA to expand the authorized uses for this
product.

AS OUR PRODUCTS ARE USED COMMERCIALLY, UNINTENDED SIDE EFFECTS, ADVERSE
REACTIONS OR INCIDENTS OF MISUSE MAY OCCUR WHICH COULD RESULT IN ADDITIONAL
REGULATORY CONTROLS, AND REDUCE SALES OF OUR PRODUCTS.

      Prior to 1999, the use of our products had been limited principally to
clinical trial patients under controlled conditions and under the care of expert
physicians. We cannot predict whether the widespread commercial use of our
products will produce undesirable or unintended side effects that have not been
evident in our clinical trials or the relatively limited commercial use to date.
In addition, in patients who take multiple medications, drug interactions could
occur which can be difficult to predict. Additionally, incidents of product
misuse may occur. These events, among others, could result in additional
regulatory controls that could limit the circumstances under which the product
is prescribed or even lead to the withdrawal of the product from the market.
More specifically, ACTIQ has been approved under regulations concerning drugs
with certain safety profiles, under which the FDA has established special
restrictions to ensure safe use. Any violation of these special restrictions
could lead to the imposition of further restrictions or withdrawal of the
product from the market.

WE MAY NOT BE ABLE TO MAINTAIN ADEQUATE PATENT PROTECTION OR MARKET EXCLUSIVITY
FOR OUR PRODUCTS AND THEREFORE POTENTIAL COMPETITORS MAY DEVELOP COMPETING
PRODUCTS, WHICH COULD RESULT IN A DECREASE IN SALES AND MARKET SHARE, CAUSE US
TO REDUCE PRICES TO COMPETE SUCCESSFULLY, AND LIMIT OUR COMMERCIAL SUCCESS.

      We place considerable importance on obtaining patent protection for new
technologies, products and processes. To that end, we file applications for
patents covering the composition of matter or uses of our drug candidates or our
proprietary processes. We could incur substantial costs in asserting our patent
rights, including those licensed to us by third parties, and in defending patent
infringement suits against us or our employees relating to ownership of, or
rights to, patents and other intellectual property of third parties. Such
disputes could substantially delay our drug development or commercialization.
The PTO or a private party could institute an interference proceeding involving
us in connection with one or more of our patents or patent applications. Such
proceedings could result in an adverse decision as to priority of invention, in
which case we would not be entitled to a patent on the invention at issue in the
interference proceeding. The PTO or a private party could also institute
reexamination proceedings involving us in connection with one or more of our
patents, and such proceedings could result in an adverse decision as to the
validity or scope of the patents. We could be forced to either seek a license to
intellectual property rights of others, which may not be available to us on
acceptable terms, if at all, or alter our products or processes so that they no
longer infringe on the proprietary rights of others.


                                       3


      We also rely on trade secrets, know-how and continuing technological
advancements to support our competitive position. Although we have entered into
confidentiality and invention rights agreements with our employees, consultants,
advisors and collaborators, we cannot be sure that such agreements will be
honored or that we will be able to effectively protect our rights to our
unpatented trade secrets and know-how. Moreover, we cannot be sure that others
will not independently develop substantially equivalent proprietary information
and techniques or otherwise gain access to our trade secrets and know-how. In
addition, many of our scientific and management personnel have been recruited
from other biotechnology and pharmaceutical companies where they were conducting
research in areas similar to those that we now pursue. As a result, we could be
subject to allegations of trade secret violations and other claims.

      PROVIGIL

      We hold exclusive license rights to a composition-of-matter patent
covering modafinil, the active drug substance in PROVIGIL. This patent was to
have expired in 1998 in the United States, but we have applied for a patent
extension that, if granted, would extend the term of this patent until November
2001. In addition, we own a U.S. patent covering the particle size of modafinil
that was issued in 1997 and expires on October 6, 2014. However, we may not
succeed in obtaining any extension for the composition-of-matter patent, and we
cannot guarantee that any of our patents will be found to be valid if challenged
by a third party. Additionally, we cannot be sure that a potential competitor
will not develop a competing product or product formulation that would avoid
infringement of these patents or any patent owned or licensed by us.

      In the United States, the Orphan Drug Act provides incentives to drug
manufacturers to develop and manufacture drugs for the treatment of rare
disorders. The FDA has granted orphan drug status to PROVIGIL for its use in the
treatment of excessive daytime sleepiness associated with narcolepsy. The grant
of orphan drug status to PROVIGIL allows us a seven-year period of marketing
exclusivity for the product in that indication. While the marketing exclusivity
provided by the orphan drug law should prevent other sponsors from obtaining
approval of the same compound for the same indication (unless the other sponsor
can demonstrate clinical superiority or we are unable to provide or obtain
adequate supplies of PROVIGIL), it would not prevent approval of the same
compound for other indications that otherwise are non-exclusive, or approval of
other compounds for the same indication.

      ACTIQ

      We hold exclusive worldwide licenses to U.S. and foreign patents covering
this product that are held by the University of Utah and its assignee, the UURF.
Specifically, we have U.S. patents covering the currently approved formulation,
methods for administering fentanyl via this formulation and a method of
producing the approved product. These patents are currently set to expire in
2005. Corresponding patents in foreign countries are set to expire between 2009
and 2010. Other issued patents and pending patent applications in the U.S. and
foreign countries that are owned or licensed by us are directed to various
processes of manufacturing the product as well as to a child-resistant disposal
container required by the FDA to be provided as part of the product. We cannot
guarantee that any of these patents will be held to be valid if challenged by a
third party. In any event, we cannot be sure that a potential competitor will
not develop a competing product or product formulation that would avoid
infringement of these patents or any patent owned or licensed by us.

      In the United States, ACTIQ is considered a new formulation of fentanyl by
the FDA, and accordingly, has been granted a three-year period of marketing
exclusivity under FDA regulations, which expires in 2001. This marketing
exclusivity runs concurrently with the patent protection described above


                                       4


and should also prevent other sponsors from obtaining approval of the same
formulation for the same indication unless the sponsor obtains such approval on
the basis of a full NDA.

      GABITRIL

      The issued U.S. composition-of-matter patent claiming tiagabine, the
active drug substance in GABITRIL, is exclusively sublicensed to us and is
currently set to expire in 2008. An extension of this patent in the United
States under the terms of the U.S. Drug Price Competition and Patent Term
Restoration Act of 1984, as amended, to extend the term of this patent until
2011 is being sought. We cannot be certain that this patent extension will be
obtained or that we will be able to take advantage of any other patent benefits
of the patent restoration act. In addition, this product is covered by another
issued U. S. patent directed to crystalline tiagabine hydrochloride monohydrate
and its use as an anti-epileptic agent, which is currently set to expire in
2012. We cannot guarantee that any of these patents will be held to be valid if
challenged by a third party. In any event, we cannot be sure that a potential
competitor will not develop a competing product or product formulation that
would avoid infringement of these patents or any patent owned or licensed by us.

MANUFACTURING, SUPPLY AND DISTRIBUTION PROBLEMS MAY CREATE SUPPLY DISRUPTIONS
THAT COULD RESULT IN A REDUCTION OF PRODUCT SALES REVENUE, AND DAMAGE COMMERCIAL
PROSPECTS FOR PROVIGIL, ACTIQ, GABITRIL AND OTHER PRODUCTS.

      We must comply with all applicable regulatory requirements of the FDA and
foreign authorities, including cGMP regulations. In addition, we must comply
with all applicable regulatory requirements of the DEA, and foreign authorities
for PROVIGIL (Schedule IV controlled substance) and ACTIQ (Schedule II
controlled substance). The facilities used to manufacture, store and distribute
our products are subject to inspection by regulatory authorities at any time to
determine compliance with regulations. The cGMP and controlled substance
regulations are complex, and any failure to comply with them could lead to
remedial action, civil and criminal penalties and delays in production of
material.

      Except for the in-house manufacture of ACTIQ for international markets, we
rely on third parties to manufacture our products. Abbott is required to supply
us with ACTIQ for the United States for up to 36 months from March 2000. After
that date, we will have to make other arrangements for supply, which could
include the manufacture of ACTIQ in-house for the United States, or establishing
supply arrangements with third parties. We also rely on third parties to
distribute, provide customer service activities and accept and process returns.
In addition, we depend upon sole suppliers for active drug substances contained
in our products, and we depend upon single manufacturers that are qualified to
manufacture finished commercial products. Although we employ a small number of
persons to coordinate and manage the activities undertaken by these third
parties, we have relatively limited experience in this regard. We maintain
inventories of active drug substances and finished products to protect against
supply disruptions, and are qualifying an additional manufacturer of finished
product for PROVIGIL. Nevertheless, any disruption in these activities could
impede our ability to sell our products and could reduce sales revenue.

      A non-active ingredient used in PROVIGIL is no longer manufactured or
commercially available. At anticipated levels of demand, we have several years
supply of this ingredient. We have prepared a new formulation of PROVIGIL that
does not include the now unavailable ingredient; however, the introduction of
any such new formulation requires regulatory approval. If we are unable to
obtain approval for our new formulation, we could face supply disruptions that
would result in significant costs and delays, undermine goodwill established
with physicians and patients, and damage commercial prospects for PROVIGIL.


                                       5


THE EFFORTS OF GOVERNMENT ENTITIES AND THIRD PARTY PAYORS TO CONTAIN OR REDUCE
THE COSTS OF HEALTH CARE MAY ADVERSELY AFFECT OUR SALES AND LIMIT THE COMMERCIAL
SUCCESS OF OUR PRODUCTS.

      In certain foreign markets, pricing or profitability of pharmaceutical
products is subject to various forms of direct and indirect governmental
control. In the United States, there have been, and we expect there will
continue to be, various federal and state proposals to implement similar
government controls. The commercial success of our products could be limited if
federal or state governments adopt any such proposals. In addition, in the
United States and elsewhere, sales of pharmaceutical products depend in part on
the availability of reimbursement to the consumer from third party payors, such
as government and private insurance plans. Third party payors increasingly
challenge the prices charged for products, and limit reimbursement levels
offered to consumers for such products. Third party payors could focus their
cost control efforts on our products, thereby limiting the commercial success of
the products.

WE EXPERIENCE INTENSE COMPETITION IN OUR FIELDS OF INTEREST, WHICH MAY ADVERSELY
AFFECT OUR BUSINESS.

      Large and small companies, academic institutions, governmental agencies,
and other public and private research organizations conduct research, seek
patent protection, and establish collaborative arrangements for product
development in competition with us. Products developed by any of these entities
may compete directly with those we develop or sell. Competing products may
provide greater therapeutic benefits for a specific indication, or may offer
comparable performance at a lower cost. Many of these companies and institutions
have substantially greater capital resources, research and development staffs
and facilities than we have, and substantially greater experience in conducting
clinical trials, obtaining regulatory approvals and manufacturing and marketing
pharmaceutical products. These entities represent significant competition for
us. In addition, competitors who are developing products for the treatment of
neurological or oncological disorders might succeed in developing technologies
and products that are more effective than any that we develop or sell or that
would render our technology and products obsolete or noncompetitive. Competition
and innovation from these or other sources could negatively affect sales of our
products or make them obsolete. Advances in current treatment methods also may
adversely affect the market for such products. In addition, we may be at a
competitive marketing disadvantage against companies that have broader product
lines and whose sales personnel are able to offer more complementary products
than we can.

OUR PRODUCTS CONTAIN CONTROLLED SUBSTANCES.

      The active ingredients in PROVIGIL and ACTIQ are controlled substances
regulated by the DEA. As controlled substances, the manufacture, shipment,
export, sale and use of these products is subject to a high degree of regulation
and accountability. These regulations also are imposed on prescribing physicians
and other third parties, making the use of such products relatively complicated
and expensive. Future products also may contain substances regulated by the DEA.
In some cases, products containing controlled substances have generated public
controversy which, in extreme cases, have resulted in further restrictions on
marketing or even withdrawal of regulatory approval. In addition, negative
publicity may bring about rejection of the product by the medical community. If
the DEA or FDA withdrew the approval of, or placed additional significant
restrictions on, the marketing of any of our products, our business could be
materially and adversely affected.

WE FACE SIGNIFICANT PRODUCT LIABILITY RISKS, WHICH MAY HAVE A NEGATIVE EFFECT ON
OUR FINANCIAL PERFORMANCE.

      The administration of drugs to humans, whether in clinical trials or
commercially, can result in product liability claims whether or not the drugs
are actually at fault for causing an injury. Furthermore, our products may
cause, or may appear to have caused, serious adverse side effects (including
death) or


                                       6


potentially dangerous drug interactions that we may not learn about or
understand fully until the drug has been administered to patients for some time.
As our products are used more widely and in patients with varying medical
conditions, the likelihood of an adverse drug reaction may increase. Product
liability claims can be expensive to defend and may result in large judgments or
settlements against us, which could have a negative effect on our financial
performance. We maintain product liability insurance in amounts we believe to be
commercially reasonable, but claims could exceed our coverage limits.
Furthermore, we cannot be certain that we will always be able to purchase
sufficient insurance at an affordable price. Even if a product liability claim
is not successful, the adverse publicity and time and expense of defending such
a claim may interfere with our business.

THE RESULTS AND TIMING OF OUR RESEARCH AND DEVELOPMENT ACTIVITIES, INCLUDING
FUTURE CLINICAL TRIALS ARE DIFFICULT TO PREDICT, SUBJECT TO FUTURE SETBACKS AND,
ULTIMATELY, MAY NOT RESULT IN ANY ADDITIONAL PHARMACEUTICAL PRODUCTS, WHICH MAY
ADVERSELY AFFECT OUR BUSINESS.

      We are focused on the search for new pharmaceutical products. These
activities include engaging in discovery research and process development,
conducting preclinical and clinical studies, and seeking regulatory approval in
the United States and abroad. In all of these areas, we have relatively limited
resources and compete against larger multinational pharmaceutical companies.
Moreover, even if we undertake these activities in an effective and efficient
manner, regulatory approval for the sale of new pharmaceutical products remains
highly uncertain since, in our industry, the majority of compounds discovered do
not enter clinical studies and the majority of therapeutic candidates fail to
show the human safety and efficacy necessary for regulatory approval and
successful commercialization.

      Preclinical testing and clinical trials must demonstrate that a product
candidate is safe and efficacious. The results from preclinical testing and
early clinical trials may not be predictive of results obtained in subsequent
clinical trials, and we cannot be sure that these clinical trials will
demonstrate the safety and efficacy necessary to obtain regulatory approval for
any product candidates. A number of companies in the biotechnology and
pharmaceutical industries have suffered significant setbacks in advanced
clinical trials, even after obtaining promising results in earlier trials. In
addition, certain clinical trials are conducted with patients having the most
advanced stages of disease. During the course of treatment, these patients often
die or suffer other adverse medical effects for reasons that may not be related
to the pharmaceutical agent being tested. Such events can have a negative impact
on the statistical analysis of clinical trial results.

      The completion of clinical trials of our product candidates may be delayed
by many factors. One such factor is the rate of enrollment of patients. Neither
we nor our collaborators can control the rate at which patients present
themselves for enrollment, and we cannot be sure that the rate of patient
enrollment will be consistent with our expectations or be sufficient to enable
clinical trials of our product candidates to be completed in a timely manner or
at all. Any significant delays in, or termination of, clinical trials of our
product candidates may have a material adverse effect on our business.

      We cannot be sure that we will be permitted by regulatory authorities to
undertake additional clinical trials for any of our product candidates, or that
if such trials are conducted, any of our product candidates will prove to be
safe and efficacious or will receive regulatory approvals. Any delays in or
termination of these clinical trial efforts may have a material adverse effect
on our business.

OUR RESEARCH AND DEVELOPMENT AND MARKETING EFFORTS ARE OFTEN DEPENDENT ON
CORPORATE COLLABORATORS AND OTHER THIRD PARTIES WHO MAY NOT DEVOTE SUFFICIENT
TIME, RESOURCES AND ATTENTION TO OUR PROGRAMS, WHICH MAY LIMIT OUR EFFORTS TO
SUCCESSFULLY DEVELOP AND MARKET POTENTIAL PRODUCTS.


                                       7


      Because we have limited resources, we have entered into a number of
collaboration agreements with other pharmaceutical companies. These agreements
often call for our partners to control the supply of bulk or formulated drugs
for commercial use or for use in clinical trials; design and execution of
clinical studies; process of obtaining regulatory approval to market the
product; and/or marketing and selling of any approved product.

      In each of these areas, our partners may not support fully our research
and commercial interests since our program may compete for time, attention and
resources with the internal programs of our corporate collaborators. As such, we
cannot be sure that our corporate collaborators will share our perspectives on
the relative importance of our program, that they will commit sufficient
resources to our program to move it forward effectively, or that the program
will advance as rapidly as it might if we had retained complete control of all
research, development, regulatory and commercialization decisions. We also rely
on several of these collaborators and other third parties for the production of
compounds and the manufacture and supply of pharmaceutical products.
Additionally, we may find it necessary from time to time to seek new or
additional partners to assist us in commercializing our products. It is
uncertain whether we would be successful in establishing any such new or
additional relationships.

OUR PRODUCT SALES AND RELATED FINANCIAL RESULTS WILL FLUCTUATE AND THESE
FLUCTUATIONS MAY CAUSE OUR STOCK PRICE TO FALL, ESPECIALLY IF THEY ARE NOT
ANTICIPATED BY INVESTORS.

      A number of analysts and investors who follow our stock have developed
models to attempt to forecast future product sales and have established earnings
expectations based upon those models. Forecasting revenue growth is difficult,
especially when there is little commercial history and when the level of market
acceptance of the product is uncertain. Forecasting is further complicated by
the difficulties in estimating stocking levels at pharmaceutical wholesalers and
at retail pharmacies and in estimating potential product returns. As a result it
is likely that there will be significant fluctuations in revenues, which may not
meet with market expectations and which also may adversely affect our stock
price. Other factors which cause our financial results to fluctuate unexpectedly
include the cost of product sales, achievement and timing of research and
development milestones, co-promotion and other collaboration revenues, cost and
timing of clinical trials, marketing and other expenses and manufacturing or
supply disruption.

WE MAY INCUR ADDITIONAL LOSSES.

      To date, we have not been profitable and our accumulated deficit was
approximately $516 million at December 31, 2000. Our losses have resulted
principally from costs incurred in research and development, including clinical
trials, and from selling, general and administrative costs associated with our
operations. While we seek to attain profitability, we cannot be sure that we
will ever achieve product and other revenue sufficient for us to attain this
objective. We cannot be sure that we will obtain required regulatory approvals,
or successfully develop, commercialize, manufacture and market any other product
candidates.

THE PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE HIGHLY VOLATILE.

      The market price of our common stock is volatile, and we expect it to
continue to be volatile for the foreseeable future. For example, during the
period January 1, 2000 through March 31, 2001, our common stock traded at a high
price of $83.625 and a low price of $29.876. Negative announcements (such as
adverse regulatory decisions, disappointing clinical trial results, disputes
concerning patent or other proprietary rights, or operating results that fall
below the market's expectations) could trigger significant declines in the price
of our common stock. In addition, external events, such as news concerning our
competitors, changes in government regulations that may impact the biotechnology
or


                                       8


pharmaceutical industries or the movement of capital into or out of our
industry, also are likely to affect the price of our common stock.

WE ARE INVOLVED IN LEGAL PROCEEDINGS THAT, IF ADVERSELY ADJUDICATED OR SETTLED,
COULD MATERIALLY IMPACT OUR FINANCIAL CONDITION.

      In August 1999, the U.S. District Court for the Eastern District of
Pennsylvania entered a final order approving the settlement of a class action in
which plaintiffs alleged that statements made about the results of certain
clinical studies of MYOTROPHIN were misleading. A related complaint has been
filed with the Court by a small number of plaintiffs who decided not to
participate in the settlement. This related complaint alleges that we are liable
under common law for misrepresentations concerning the results of the MYOTROPHIN
clinical trials, and that we and certain of our current and former officers and
directors are liable for the actions of persons who allegedly traded in our
common stock on the basis of material inside information. We believe that we
have valid defenses to all claims raised in this action. Even if there is a
judgment against us in this case, we do not believe it will have a material
negative effect on our financial condition or results of operations.

      Due to our past involvement in promoting STADOL NS (butorphanol tartrate)
Nasal Spray, a product of Bristol-Myers Squibb Company, we are co-defendants in
a product liability action brought in November 2000 against Bristol-Myers.
Although we cannot predict with certainty the outcome of this litigation, we
believe that any expenses or damages that we may incur will be paid by
Bristol-Myers under the indemnification provisions of our co-promotion
agreement. As such, we do not believe that these actions will have a negative
effect on our financial condition or results of operations.

      In February 2001, a complaint was filed in Utah state court by Zars, Inc.
and one of its research scientists, against us and our subsidiary Anesta Corp.
The plaintiffs are seeking a declaratory judgment to establish their right to
develop transdermal or other products containing fentanyl and other
pharmaceutically active agents under a royalty and release agreement between
Zars and Anesta. The complaint also asks for unspecified damages for breach of
contract and interference with economic relations. We believe that we have valid
defenses to all claims raised in this action. In any event, we do not believe
any judgment against us will have a material negative effect on our financial
condition or results of operations.

WE MAY NEVER OBTAIN APPROVAL TO MARKET MYOTROPHIN, IT MAY NOT BE COST-EFFECTIVE
TO PURSUE MYOTROPHIN FOR OTHER INDICATIONS, AND THEREFORE WE MAY NEVER DERIVE
REVENUE FROM MYOTROPHIN.

      We do not believe that the conditions for regulatory approval of
MYOTROPHIN imposed by the FDA can be met without conducting an additional Phase
3 study, and we have no plans to conduct such a study at this time. However, we
have had discussions with certain physicians who are seeking to obtain
governmental and non-governmental funding to be used to conduct such a study. If
this funding is obtained and the study is undertaken, we may allow reference to
our IND, and supply MYOTROPHIN in quantities sufficient to conduct the study in
exchange for the rights to use any clinical data generated by such study in
support of FDA approval of our pending NDA. Even if an additional study is
undertaken, the results will not be available for several years and may not be
sufficient to obtain regulatory approval to market the product. If MYOTROPHIN is
not approved for the treatment of ALS, then it is unlikely that we would pursue
approval for the use of MYOTROPHIN to treat other indications. Additionally, if
we do not obtain approval of MYOTROPHIN for ALS or pursue approval for other
indications, rights to the product may revert back to CCP.


                                       9


OUR DEPENDENCE ON KEY EXECUTIVES AND SCIENTISTS COULD IMPACT THE DEVELOPMENT AND
MANAGEMENT OF OUR BUSINESS.

      We are highly dependent upon our ability to attract and retain qualified
scientific, technical and managerial personnel. There is intense competition for
qualified personnel in the pharmaceutical and biotechnology industries, and we
cannot be sure that we will be able to continue to attract and retain the
qualified personnel necessary for the development and management of our
business. Our research and development programs and our business might be harmed
by the loss of the services of existing personnel, as well as the failure to
recruit additional key scientific, technical and managerial personnel in a
timely manner. Much of the know-how we have developed resides in our scientific
and technical personnel and is not readily transferable to other personnel. We
do not maintain "key man" life insurance on any of our employees.

WE MAY BE REQUIRED TO INCUR SIGNIFICANT COSTS TO COMPLY WITH ENVIRONMENTAL LAWS
AND REGULATIONS AND OUR COMPLIANCE MAY LIMIT ANY FUTURE PROFITABILITY.

      Our research and development activities involve the controlled use of
hazardous, infectious and radioactive materials that could be hazardous to human
health and safety or the environment. We store these materials and various
wastes resulting from their use at our facility pending ultimate use and
disposal. We are subject to a variety of federal, state and local laws and
regulations governing the use, generation, manufacture, storage, handling and
disposal of these materials and wastes, and we may be required to incur
significant costs to comply with both existing and future environmental laws and
regulations.

      We believe that our safety procedures for handling and disposing of these
materials comply with federal, state and local laws and regulations, but the
risk of accidental injury or contamination from these materials cannot be
eliminated. In the event of an accident, we could be held liable for any
resulting damages, which could adversely affect our financial condition or
results of operations.

ANTI-TAKEOVER PROVISIONS MAY DETER A THIRD PARTY FROM ACQUIRING US, LIMITING OUR
STOCKHOLDERS' ABILITY TO PROFIT FROM SUCH A TRANSACTION.

      Our Board of Directors has the authority to issue up to 5,000,000 shares
of preferred stock, $0.01 par value, of which 1,000,000 have been reserved for
issuance in connection with our stockholder rights plan, and to determine the
price, rights, preferences and privileges of those shares without any further
vote or action by our stockholders. Our stockholder rights plan could have the
effect of making it more difficult for a third party to acquire a majority of
our outstanding voting stock.

      We are subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law, which prohibits us from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person becomes an
interested stockholder, unless the business combination is approved in a
prescribed manner. The application of Section 203 could have the effect of
delaying or preventing a change of control of Cephalon. We also have adopted a
"poison pill" rights plan that will dilute the stock ownership of an acquirer of
our stock upon the occurrence of certain events. Section 203, the rights plan,
and the provisions of our certificate of incorporation, our bylaws and Delaware
corporate law, may have the effect of deterring hostile takeovers or delaying or
preventing changes in control of our management, including transactions in which
stockholders might otherwise receive a premium for their shares over then
current market prices.


                                       10


                           FORWARD-LOOKING STATEMENTS

      In addition to historical facts or statements of current condition, this
prospectus contains forward-looking statements. Forward-looking statements
provide our current expectations or forecasts of future events. These may
include statements regarding anticipated scientific progress in our research
programs, development of potential pharmaceutical products, prospects for
regulatory approval, manufacturing capabilities, market prospects for our
products, sales and earnings projections, and other statements regarding matters
that are not historical facts. Some of these forward-looking statements may be
identified by the use of words in the statements such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe" or other words and
terms of similar meaning. Our performance and results could differ materially
from those reflected in these forward-looking statements due to general
financial, economic, regulatory and political conditions affecting the
biotechnology and pharmaceutical industries as well as more specific risks and
uncertainties such as those set forth above and in this report. Given these
risks and uncertainties, any or all of these forward-looking statements may
prove to be incorrect. Therefore, you should not rely on any such
forward-looking statements. Furthermore, we do not intend (and we are not
obligated) to update publicly any forward-looking statements. You are advised,
however, to consult any further disclosures we make on related subjects in our
reports to the Securities and Exchange Commission. Risks that we anticipate are
discussed in more detail in the section entitled "Risk Factors." Other
unanticipated occurrences besides those listed in this prospectus could also
adversely affect us. This discussion is permitted by the Private Securities
Litigation Reform Act of 1995.

                                 USE OF PROCEEDS

      We will not receive any proceeds from the resale of common stock held by
Chiron and covered by this prospectus. See the "Selling Stockholder" section of
this prospectus, which follows, for more information.

                               SELLING STOCKHOLDER

      In connection with a collaboration arrangement related to the development
of MYOTROPHIN, one of our product candidates, we entered into a securities
purchase agreement with Chiron on January 7, 1994. Pursuant to this agreement,
we issued to Chiron a warrant to purchase up to 750,000 shares of our common
stock. On December 29, 2000, Chiron exercised its rights under this warrant and
purchased 750,000 shares of our common stock at an exercise price of $18.50 per
share. The shares issued upon exercise of the warrants are referred to as the
warrant shares. Pursuant to this prospectus, Chiron is offering all of the
750,000 warrant shares.

      Pursuant to the securities purchase agreement, we are obligated to file a
registration statement under the Securities Act of 1933 registering the warrant
shares upon Chiron's written request. We have filed a registration statement on
Form S-3, of which this prospectus forms a part, to register the warrant shares
for resale by Chiron and meet this obligation. We are further obligated to use
our best efforts to maintain the effectiveness of this registration statement
for at least 120 days.

      Chiron has informed us that, prior to this offering, Chiron owned
1,550,000 shares of common stock representing approximately 3.6% of our common
stock outstanding as of April 20, 2001. Upon completion of this offering
(assuming Chiron does not purchase or sell other of our securities), Chiron will
own 800,000 shares of common stock representing approximately 1.9% of our common
stock outstanding as of the same date.


                                       11


                              PLAN OF DISTRIBUTION

      Chiron may from time to time, in one or more transactions, sell all or a
portion of the shares on the Nasdaq National Market, in negotiated transactions,
in underwritten transactions or otherwise, at prices then prevailing or related
to the then current market price or at negotiated prices. The offering price of
the shares from time to time will be determined by Chiron, and, at the time of
such determination, may be higher or lower than the market price of our common
stock on the Nasdaq National Market. The shares may be sold directly or though
broker-dealers acting as principal or agent. The methods by which the shares may
be sold include:

  o   a block trade in which the broker-dealer so engaged will attempt to sell
      the shares as agent but may position and resell a portion of the block as
      principal to facilitate the transaction;

  o   purchases by a broker-dealer as principal and resale by such broker-dealer
      for its account pursuant to this prospectus;

  o   ordinary brokerage transactions and transactions in which the broker
      solicits purchases; and

  o   privately negotiated transactions.

      In effecting sales, brokers or dealers engaged by Chiron may arrange for
other brokers or dealers to participate. These brokers or dealers may receive
commissions or discounts from Chiron in amounts to be negotiated immediately
prior to the sale. Chiron and any underwriters, dealers or agents participating
in the distribution of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the shares by
Chiron and any commissions received by any broker-dealers may be deemed to be
underwriting commissions under the Securities Act. In addition, any shares
covered by this prospectus that qualify for sale pursuant to Rule 144 might be
sold under Rule 144 rather than pursuant to this prospectus.

      Additionally, in connection with the sale of the shares, Chiron may enter
into hedging transactions with broker-dealers and the broker-dealers may engage
in short sales of the shares in the course of hedging the positions they assume
with Chiron. Chiron may also enter into option or other transactions with
broker-dealers that involve the delivery of the shares to the broker-dealers,
who may then resell or otherwise transfer the shares. Chiron may also loan or
pledge the shares to a broker-dealer and the broker-dealer may sell the shares
so loaned or upon a default may sell or otherwise transfer the pledged shares.

      When Chiron elects to make a particular offer of shares, a prospectus
supplement, if required, will be distributed that will identify any
underwriters, dealers or agents and any discounts, commissions and other terms
constituting compensation from Chiron and any other required information.

      In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.

      We also have agreed to indemnify Chiron in certain circumstances, against
certain liabilities arising under the Securities Act. Chiron has agreed to
indemnify us against certain liabilities, including liabilities arising under
the Securities Act with respect to written information furnished to us by
Chiron.


                                       12


      We have agreed to pay all costs and expenses relating to the registration
of the shares. Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the shares will be borne by
Chiron.

                                  LEGAL OPINION

      Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on the
validity of the shares of common stock offered hereby.

                                     EXPERTS

      The consolidated balance sheets of Cephalon, Inc. as of December 31,
2000 and 1999 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 2000, incorporated by reference in this Registration
Statement from the Form 10-K, together will all amendments thereto, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto and are incorporated herein in reliance
upon the authority of said firm as experts in accounting and auditing in
giving said reports. Arthur Andersen LLP did not audit the financial
statements of Anesta Corp., a company acquired by Cephalon during 2000 in a
transaction accounted for as pooling-of-interests, as of December 31, 1999
and for the year then ended and for the year ended December 31, 1998. Such
statements are included in the consolidated financial statements of Cephalon,
Inc. and reflect total assets and total revenues of 25 percent and 13 percent
in 1999, respectively, and total revenues of 4 percent in 1998 of the related
consolidated totals. Those statements were audited by PricewaterhouseCoopers
LLP whose report has been furnished to us, and Arthur Andersen's opinion,
insofar as it relates to amounts included for Anesta Corp., is based solely
upon the report of PricewaterhouseCoopers LLP.

      The balance sheet of Anesta Corp. as of December 31, 1999 and the related
statements of operations and comprehensive loss, of stockholders' equity and of
cash flows for each of the two years in the period ended December 31, 1999 have
been audited by PricewaterhouseCoopers LLP, independent public accountants, as
indicated in their report with respect thereto. Such financial statements are
incorporated by reference herein in reliance upon the report of
PricewaterhouseCoopers LLP to the extent to the extent they have been included
in the financial statements of Cephalon, Inc. given on the authority of such
firm as experts in auditing and accounting.


                       WHERE YOU CAN FIND MORE INFORMATION

      We are subject to the information requirements of the Exchange Act, which
means we are required to file annual, quarterly and current reports, proxy
statements and other information with the SEC. Copies of the registration
statement and any other materials that we file with the SEC and may be read and
copied at the SEC's Public Reference Room. You may obtain information on the
operation of the Public Reference Room by calling the SEC at (800) SEC-0330. The
SEC maintains a Website that contains all information filed electronically by
us, including reports, proxy and information statements. The address of the
SEC's Website is http://www.sec.gov.

      We have filed a registration statement on Form S-3, of which this
prospectus forms a part, to register with the SEC the shares of common stock
being offered by this prospectus. As allowed by SEC rules, this prospectus does
not contain all the information you can find in the registration statement or
the exhibits to the registration statement. The SEC allows us to "incorporate by
reference" information into


                                       13


this prospectus, which means that we can disclose important information to you
by referring you to another document filed separately with the SEC. The
historical and future information incorporated by reference is deemed to be part
of this prospectus, except for any information superseded by information in this
prospectus. The documents incorporated by reference contain important
information about us, our business and our finances.

The documents that we are incorporating by reference are:

  o   Our Annual Report on Form 10-K for the year ended December 31, 2000;

  o   Our Registration Statement on Form 8-A filed with the Commission on March
      15, 1991, setting forth the description of the Cephalon common stock,
      including all material incorporated by reference therein; and

  o   Our Registration Statements on Form 8-A, as amended, filed with the
      Commission on January 20, 1999 and August 2, 2000, containing the
      description of the Cephalon stockholder rights plan, including all
      material incorporated by reference therein.

      Any documents that we file pursuant to Sections 13(a), 13(c), 14 or 15 of
the Exchange Act after the date of this prospectus but before the end of
Chiron's resale of the securities covered by this prospectus will also be
considered to be incorporated by reference.

      If you request, either orally or in writing, we will provide you with a
copy of any or all documents which are incorporated by reference into the
document. You should address written requests to John E. Osborn, Senior Vice
President, General Counsel and Secretary, Cephalon, Inc., 145 Brandywine
Parkway, West Chester, PA 19380, (610) 344-0200.


                                       14





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                                 750,000 SHARES


                                 CEPHALON, INC.


                                  COMMON STOCK


                            -------------------------

                                   PROSPECTUS

                                  MAY 17, 2001
                            -------------------------



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