8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported)              May 11, 2005

Cephalon, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-19119	23-2484489
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
41 Moores Road
Frazer, Pennsylvania		19355
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code             (610) 344-0200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

On May 12, 2005, Cephalon, Inc. (the “Registrant”), Cepsal Acquisition Corp., a wholly-owned subsidiary of the Registrant, and Salmedix, Inc. (“Salmedix”) (together with certain individuals representing the stockholders of Salmedix) entered into an Agreement and Plan of Merger (the “Merger Agreement”).  Under the terms of the Merger Agreement, Cepsal Acquisition Corp. will be merged (“the “Merger”) with and into Salmedix, with Salmedix continuing as the surviving corporation and a wholly-owned subsidiary of the Registrant.  At the effective time of the Merger, the holders of the outstanding capital stock, on a fully-diluted basis, of Salmedix will be entitled to receive approximately $160 milion cash and payments totaling up to $40 million upon achievement of certain regulatory milestones.  The completion of the transaction is subject to several conditions, including the approval of the Merger by the stockholders of Salmedix and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Act.  The Merger is expected to close in the second quarter of 2005. There are no material relationships between the Registrant and Salmedix or any affiliates of the Registrant and Salmedix, other than by virtue of the Merger Agreement.  The Registrant hereby incorporates by reference the press release dated May 12, 2005, attached hereto as Exhibit 99.1, and made a part of this Item 1.01.

Item 8.01Other Events.

On May 11, 2005, the Registrant and H. Lundbeck A/S announced the discontinuation of their Phase 2/3 clinical trial of CEP-1347 in Parkinson’s disease.  An independent data monitoring committee completed a planned review of interim results and concluded that the data are unlikely to provide evidence of significant effect. There were no safety concerns in the trial.  The Registrant hereby incorporates by reference the press release dated May 11, 2005, attached hereto as Exhibit 99.2, and made a part of this Item 8.01.

Item 9.01Financial Statements and Exhibits.

(a)Financial Statements of Business Acquired.

None

(b)Pro forma Financial Information.

None

(c)Exhibits.

Exhibit No.	Description of Document
99.1	Press Release dated May 12, 2005 – Cephalon Announces Acquisition of Salmedix
99.2	Press Release dated May 11, 2005 – Cephalon and H. Lundbeck Announce Discontinuation of CEP-1347 Clinical Trial in Parkinson’s Disease

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CEPHALON, INC.
Date: May 13, 2005	By:	/s/ J. Kevin Buchi
		J. Kevin Buchi
		Senior Vice President & Chief Financial Officer

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated May 12, 2005 – Cephalon Announces Acquisition of Salmedix
99.2	Press Release dated May 11, 2005 – Cephalon and H. Lundbeck Announce Discontinuation of CEP-1347 Clinical Trial in Parkinson’s Disease

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EX-99.1

EXHIBIT 99.1

News

Investor Contact: Chip Merritt

610-738-6376

 cmerritt@cephalon.com

Media Contact: Robert W. Grupp

610-738-6402

rgrupp@cephalon.com

For Immediate Release

Cephalon Announces Acquisition of Salmedix

Transaction Provides Cephalon with Oncology Products

in Late-Stage Clinical Development

Frazer, PA –May 12, 2005 – Cephalon, Inc. (Nasdaq: CEPH) announced today that it has signed a definitive merger agreement under which it will acquire all of the outstanding capital stock of Salmedix, Inc. for approximately $160 million cash; the company is required to pay an additional $40 million of cash payments upon the achievement of certain regulatory milestones.  At the close of the transaction, Salmedix is expected to have approximately $25 million in cash on hand, net of transaction-related expenses. The agreement is subject to customary closing conditions including the receipt of necessary regulatory approvals.

Salmedix’s most advanced product, Treanda™ (bendamustine hydrochloride), is currently in Phase II clinical trials in the United States and Canada for the treatment of indolent (slowly progressing) non-Hodgkin’s lymphoma (NHL), a type of hematologic malignancy.  One ongoing Phase II study is evaluating the use of Treanda as a single agent in patients with NHL who are refractory to Rituxan® (rituximab).(1)  A second on-going study is evaluating Treanda in combination with rituximab in patients who are potentially sensitive to rituximab.  Data presented at the 2004 Annual Meeting of the American Society of Hematology indicate that Treanda has an acceptable safety profile and demonstrates high response rates as a single agent in patients with relapsed indolent NHL that is refractory to rituximab.  Interim data on the two on-going Phase II studies will be presented at the upcoming American Society of Clinical Oncology meeting in Orlando on May 14.  A Phase III trial of Treanda will be initiated later this year.  In addition to Treanda, Salmedix has two other product candidates in Phase II clinical development.

Bendamustine hydrochloride is currently marketed in Germany by a third party for the treatment of non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, multiple myeloma, metastatic breast cancer and other solid tumors. Extensive data have been published by third parties on hematological and solid tumor studies with bendamustine hydrochloride.

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(1) Rituxan is a registered trademark of Biogen IDEC, Inc.

SOURCE:  Cephalon, Inc. • 41 Moores Road • Frazer, PA 19355 • (610) 344-0200 • Fax (610) 344-0981

“We are excited about Treanda and its addition to our oncology portfolio,” said Frank Baldino, Jr., Ph.D., Chairman and CEO of Cephalon.  “This acquisition, along with encouraging data from our on-going studies of CEP-701 in acute myelogenous leukemia, gives us the opportunity to advance our entry into the oncology marketplace with multiple product candidates.”

David Kabakoff, Ph.D., Chairman, President and CEO of Salmedix, said, “We are proud that Cephalon has recognized the value of our oncology product candidates.  We look forward to the integration of our programs into the Cephalon oncology franchise and the successful commercialization of Treanda, assuming regulatory approval.  Cephalon’s vision, development capabilities and record of success in maximizing the potential of acquired products were key contributing factors to our transaction.”

Under the terms of this transaction, Cephalon obtains all rights to market Treanda in the United States and Canada.  In the United States alone, approximately 347,000 individuals are currently living with NHL and 53,400 new cases are diagnosed each year, according to the National Cancer Institute.  According to Decision Resources, a market research firm, the U.S. market for therapeutics to treat NHL is projected to grow 11% annually through 2010.

The merger is expected to close in the second quarter of 2005, after which Salmedix will become a wholly-owned subsidiary of Cephalon.  Cephalon expects the transaction to be $0.10-0.15 per share dilutive to its 2005 earnings and will reissue 2005 earnings guidance when the transaction closes.

Deutsche Bank Securities Inc. acted as financial advisor to Cephalon in this transaction.  SG Cowen & Co., LLC acted as financial advisor to Salmedix.

Founded in 2000, Salmedix, Inc. is a privately-held oncology drug development company based in San Diego, California.  Salmedix is primarily focused on developing compounds for the treatment of hematologic malignancies, such as lymphomas, myeloma and leukemias.

Cephalon, Inc.

Cephalon currently employs more than 2,200 people in the United States and Europe.  U.S. sites include corporate headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota.  Cephalon’s major European offices are located in Guildford, England, Martinsried, Germany, and in Maisons-Alfort, France.

The company currently markets three proprietary products in the United States:  PROVIGIL® (modafinil) Tablets [C-IV], GABITRIL® (tiagabine hydrochloride) and ACTIQ® (oral transmucosal fentanyl citrate) [C-II], and more than 20 products internationally.  Further information about Cephalon and full prescribing information on its U.S. products is available at www.cephalon.com or by calling 1-800-896-5855.

* * *

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Cephalon’s current expectations or

forecasts of future events. These may include statements regarding the Salmedix acquisition including the timing of the closing of the transaction, the development of Salmedix’s product candidates and the timing of Phase III clinical trials with Treanda, anticipated scientific progress on its research programs, development of potential pharmaceutical products, including Treanda or CEP-701, interpretation of clinical results of Treanda, prospects for regulatory approval for Treanda or CEP-701, manufacturing development and capabilities, market prospects for its products, yearly and quarterly sales and earnings guidance for 2005, including the expected dilution in 2005 on a per share basis as a result of this transaction, and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements 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. Cephalon’s performance and financial 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 facing Cephalon such as those set forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. 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 factors or forward-looking statements. Furthermore, Cephalon does not intend to update publicly any forward-looking statement, except as required by law. The Private Securities Litigation Reform Act of 1995 permits this discussion.

# # #

EX-99.2

EXHIBIT 99.2

News

For Immediate Release

Cephalon and H. Lundbeck Announce Discontinuation

of CEP-1347 Clinical Trial in Parkinson’s Disease

Frazer, PA – May 11, 2005 – Cephalon, Inc. (Nasdaq: CEPH) and H. Lundbeck A/S (CSE: LUN) announced today the discontinuation of their Phase 2/3 clinical trial of CEP-1347 in Parkinson’s disease.  An independent data monitoring committee just completed a planned review of interim results and concluded that the data are unlikely to provide evidence of significant effect. There were no safety concerns.

The study was being conducted by the Parkinson Study Group, a non-profit, cooperative group of Parkinson’s disease experts from medical centers in the United States and Canada who are dedicated to improving treatment for persons affected by Parkinson’s disease. 

“While we are disappointed with results of the trial, our collaboration with Lundbeck will continue as a valuable part of our ongoing research program in neurodegenerative disorders,” said Dr. Jeffry L. Vaught, Senior Vice President and President, Research and Development at Cephalon.  “We will continue to actively evaluate compounds for further clinical development with Lundbeck.”

Cephalon, Inc.

Cephalon, Inc. is an international biopharmaceutical company dedicated to the discovery, development and marketing of innovative products to treat sleep and neurological disorders, cancer and pain. The company currently markets three proprietary products in the United States: PROVIGIL (modafinil) Tablets [C-IV], GABITRIL^® (tiagabine hydrochloride) Tablets and ACTIQ^® (oral transmucosal fentanyl citrate) [C-II] and more than 20 products internationally. Further information about Cephalon and full prescribing information on its U.S. products is available at www.cephalon.com or by calling 1-800-896-5855.

H. Lundbeck A/S

H. Lundbeck A/S is an international pharmaceutical company engaged in the research and development, production, marketing and sale of drugs for the treatment of psychiatric and neurological disorders. The company currently employs approximately 5,000 people, and in 2004 its revenue was DKK 9.7 billion.

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SOURCE:  Cephalon, Inc. • 41 Moores Road • Frazer, PA 19355 • (610) 344-0200 • Fax (610) 344-0065

* * *

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Cephalon’s current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, development of potential pharmaceutical products, interpretation of clinical results, market prospects for its products, sales and earnings guidance, and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements 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. Cephalon’s performance and financial 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 facing Cephalon such as those set forth in its reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. 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 factors or forward-looking statements. Furthermore, Cephalon does not intend to update publicly any forward-looking statement, except as required by law. The Private Securities Litigation Reform Act of 1995 permits this discussion.

# # #

Cephalon Contacts:

Media:

Robert W. Grupp

610-738-6402

rgrupp@cephalon.com

Investors:

Chip Merritt

610-738-6376

cmerritt@cephalon.com

Lundbeck Contacts:

Steen Juul Jensen

Vice President

+45 36 43 30 06

Jacob Tolstrup, Investor Relations

+45 36 43 30 79

Helle Hedegaard Juhl

Media Relations

+45 36 43 41 68.

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