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)   January 31, 2006

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 Rd.
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 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

(a)           On February 1, 2006, Cephalon, Inc. (the “Company”) entered into agreements with Barr Laboratories, Inc. (“Barr”) to settle its pending patent infringement disputes in the United States (the “Agreements”) related to PROVIGIL® (modafinil) Tablets [C-IV] (“PROVIGIL”) and ACTIQ® (oral transmucosal fentanyl citrate) [C-II] (“ACTIQ”). 

In connection with the Agreements, the Company will grant Barr a non-exclusive royalty-bearing right to market and sell a generic version of PROVIGIL in the United States.  Barr’s license will become effective in October 2011 unless the Company obtains a pediatric extension for PROVIGIL, which would permit entry by Barr in April 2012.  An earlier entry by Barr may occur based upon the entry of another generic version of PROVIGIL.

With respect to ACTIQ, the Company will grant Barr an exclusive royalty-bearing right to market and sell a generic version of ACTIQ in the United States, effective on December 6, 2006.  Barr will pay specified royalties on net profits of its generic ACTIQ product for the period December 6, 2006 through February 3, 2007, subject to certain limitations.  Under an agreement entered into with Barr in mid-2004 in connection with the Company’s acquisition of CIMA LABS and pursuant to a Federal Trade Commission order, the Company granted Barr a non-exclusive, royalty-free license to sell a generic version of ACTIQ effective on the earlier of final approval of the Company’s fentanyl effervescent buccal tablet (“FEBT”) or February 3, 2007, if the Company receives a pediatric extension for ACTIQ (or September 5, 2006, if the Company does not receive the extension).

The Company and Barr also agreed to a series of business arrangements related to modafinil.  Specifically, Barr has agreed to grant to the Company a non-exclusive license, effective immediately, to certain of its worldwide intellectual property rights related to modafinil in exchange for an upfront payment.  The Company also has agreed to purchase certain existing and in-process inventory of the active pharmaceutical ingredient modafinil.

The Company and Barr will promptly file a dismissal with the United States District Courts for the Districts of New Jersey and Delaware that will conclude pending litigation between the parties regarding PROVIGIL and ACTIQ, respectively.  The Agreement and the previously announced settlements with Teva Pharmaceutical Industries Ltd. and its affiliate (“Teva”), Ranbaxy Laboratories Limited (“Ranbaxy”), and Mylan Pharmaceuticals Inc. (“Mylan”) resolve the PROVIGIL litigation with all four firms that the Company understands were the first to submit abbreviated new drug applications (ANDAs) with Paragraph IV certifications to the Food and Drug Administration.  As such, Teva, Ranbaxy, Mylan and Barr would be granted the 180-day exclusivity provided by the provisions of the Federal Food, Drug, and Cosmetic Act.  The separate, ongoing PROVIGIL patent litigation between the Company and Carlsbad Technology, Inc. (“Carlsbad”), pending in the U.S. District Court in New Jersey, is unaffected by these settlements.  The lawsuit against Carlsbad claims infringement of the Company's U.S. Patent No. RE37,516 (“the ‘516 Patent”), which covers pharmaceutical compositions and methods of treatment with the form of modafinil contained in PROVIGIL. The ‘516 Patent expires in October 6, 2014 and may be extended by six months (to April 6, 2015) upon acceptance by the FDA of the pediatric study data submitted by the company on December 21, 2005.

The above description of the terms between the Company and Barr is not intended to be a complete summary of all of the terms and conditions of the Agreements.  Many of the terms and conditions of the Agreements remain confidential.  There can be no assurance that the Federal Trade Commission will not raise objections to, or request modifications to, the Agreements; that any such modifications will be acceptable to the Company and Barr; or that the Agreements will become effective on the terms currently proposed or at all.

The Company hereby incorporates by reference the press release dated February 1, 2006, attached hereto as Exhibit 99.1, and made a part of this Item 1.01.

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(b)           On January 31, 2006, the Board of Directors (the “Board”) of the Company upon the recommendation of the Stock Option and Compensation Committee of the Board (the “Compensation Committee”), adopted the 2006 Management Incentive Compensation Program (the “Plan”) for the Company’s executive officers appointed by the Board and key employees.  Under the Plan, the Company’s executive officers shall be entitled to earn cash bonus compensation (an “Award”) based upon the achievement of certain pre-established performance goals for 2006 outlined in the Plan (the “Performance Goals”) for each officer.

Chairman and Chief Executive Officer

For the Company’s Chairman and Chief Executive Officer (the “CEO”), the Performance Goals consist of a financial component (60% of total) and operational component (40% of total).  The financial component includes two, equally-weighted, performance targets for fiscal 2006: total product sales and diluted adjusted earnings per share. The operational component includes certain pre-established performance goals for the year in the following areas of the Company’s business:  clinical; manufacturing; and research and development.   At the end of the fiscal year, the Compensation Committee will be responsible for assessing the performance of the CEO and providing its recommendation as to any Award under the Plan.  These recommended Awards will then be presented to the Board for final approval.

Awards under the Plan will be determined based on the achievement of Performance Goals.  For the CEO, if he achieves 100% of his Performance Goals, he will receive the “target” Award, which is equal to 100% of his 2006 base salary.  The achievement of a higher or lower percentage of his Performance Goals will impact any Awards under the Plan, which can range from 15% to 300% of the “target” Award.  However, in no event shall the CEO be eligible to receive an Award if he achieves less than 85% of his Performance Goals.

Executive Officers (Other than CEO)

For the Company’s Executive Officers other than the CEO (the “Officers”), the Performance Goals consist of certain individual performance objectives (70% of total) and the same fiscal 2006 financial components described above (30% of total).  At the end of the fiscal year, the CEO will be responsible for assessing the actual performance of each Officer against his respective Performance Goals and recommending any Award under the Plan. The Compensation Committee will review these recommendations, which then will be presented to the Board for final approval.

For the Officers, if a participant achieves 100% of his Performance Goals, he will receive the “target” Award, which is equal to 50% of his 2006 base salary.  The achievement of a higher or lower percentage of the Performance Goals will impact any Award under the Plan, which can range from 15% to 220% of the “target” Award.  However, in no event shall an Officer be eligible to receive an Award if he achieves less than 90% of his Performance Goals.

Item 5.02Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

(b)On January 31, 2006, Horst Witzel, Dr. – Ing., provided the Company with notice of his intention to retire from the Board effective May 17, 2006 and, therefore, to not stand for reelection at the May 17, 2006 Annual Meeting of Stockholders.

Dr. Witzel indicated in a letter to the Company that his decision to retire is based solely on personal reasons and is not due to any disagreement with the Company or concerns relating to the Company’s operations, policies or practices.

The Company hereby incorporates by reference the press release dated January 31, 2006 attached hereto as Exhibit 99.2, and made a part of this Item 5.02.

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Item 8.01Other Events.

On February 1, 2006, the Company issued a press release regarding an update on the regulatory status of NUVIGIL® (modafinil).  The Company hereby incorporates by reference the press release dated February 1, 2006, attached hereto as Exhibit 99.3, and made a part of this Item 8.01.

Item 9.01Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired:  Not applicable
(b)	Pro Forma Financial Information:  Not applicable
(c)	Exhibits

Number	Description
10.1	Cephalon, Inc. 2006 Management Incentive Compensation Plan
99.1	Press Release dated February 1, 2006 – Cephalon, Inc. Announces Agreements with Barr Laboratories, Inc. Regarding Settlement of PROVIGIL® and ACTIQ® Patent Litigations
99.2	Press Release dated January 31, 2006 – Horst Witzel, Dr.-Ing., to Retire from Cephalon Board of Directors
99.3	Press Release dated February 1, 2006 – Cephalon, Inc. Provides Update on Regulatory Status of NUVIGIL®

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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: February 2, 2006	By:	/s/ John E. Osborn
		John E. Osborn
		Sr. Vice President, General Counsel & Secretary

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Cephalon, Inc. 2006 Management Incentive Compensation Plan
99.1	Press Release dated February 1, 2006 – Cephalon, Inc. Announces Agreements with Barr Laboratories, Inc. Regarding Settlement of PROVIGIL® and ACTIQ® Patent Litigations
99.2	Press Release dated January 31, 2006 – Horst Witzel, Dr.-Ing., to Retire from Cephalon Board of Directors
99.3	Press Release dated February 1, 2006 – Cephalon, Inc. Provides Update on Regulatory Status of NUVIGIL®

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EX-10.1

EXHIBIT 10.1

CEPHALON, INC.

2006 MANAGEMENT INCENTIVE COMPENSATION PLAN

SECTION 1. PURPOSE. The purpose of the Cephalon, Inc. Management Incentive Compensation Plan (the “Plan”) is to provide Participants (as defined) employed by Cephalon, Inc. (the “Company”) and its affiliates with incentive compensation based upon the level of achievement of financial and other performance criteria. The Plan will enhance the ability of the Company and its affiliates to attract and retain individuals of exceptional managerial talent upon whom, in large measure, the sustained progress, growth and profitability of the Company depends.

SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall have the meanings set forth below:

(a) “AWARD” means a cash payment.

(b) “BOARD” means the Board of Directors of the Company.

(c) “COMMITTEE” means the Stock Option and Compensation Committee of the Board (or any successor committee).

(d) “EXECUTIVE OFFICER” means an executive officer of the Company as appointed by the Board of Directors or other key employee.

(e) “MEASUREMENT PERIOD” means a period of time selected by the Committee for which performance will be measured for purposes of Section 4.

(f) “MAXIMUM AWARD” means the limitation on awards payable under this Plan in any year, which for the Chairman/Chief Executive Officer is 300% of his annual base salary and for any other Participant is 110% of the Participant’s annual base salary.

(g) “PARTICIPANT” means any Executive Officer selected by the Committee to participate in the Plan.

(h) “PERFORMANCE PERIOD” means a period of time selected by the Committee to which an Award relates.

(i) “TARGET AWARD” means an Award level that may be paid if certain performance criteria are achieved.

(j) “THRESHOLD PERFORMANCE” means a level of achievement of 85% of target performance for the Chairman/Chief Executive Officer and 90% of target performance for other Participants.

SECTION 3. ELIGIBILITY. Persons employed by the Company or any of its affiliates during a Performance Period in active service in a managerial or professional role for all or any part of the Performance Period are eligible to be Participants under the Plan for such Performance Period (whether or not so employed or living at the date an Award is made) and may be considered by the Committee for an Award. An employee is not rendered ineligible to be a Participant by reason of being a member of the Board.

SECTION 4. AWARDS-GENERAL.

(a) Target Awards.  The Committee will establish the Target Awards for Participants at the beginning of each Performance Period. For the Chairman/Chief Executive Officer, the Target Award shall be 100% of annual base salary; for Participants other than the Chairman/Chief Executive Officer, the Target Award shall be 50% of annual base salary.

(b) Performance Criteria; Award Levels.  The performance criteria utilized by the Committee for the Chairman/Chief Executive Officer may be based on individual performance, revenue, earnings per share, other Company and business unit financial objectives, operational efficiency measures, and other measurable objectives tied to the Company’s success or such other criteria as the Committee shall determine in its discretion. The Committee shall each year also determine specific levels of achievement of the established performance criteria that correspond to Threshold Performance, Target Award and Maximum Award.  Performance criteria for Participants (other than Chairman/Chief Executive Officer) will be established by management.  For the Performance Period fiscal year 2006, the performance criteria for the Chairman/Chief Executive Officer and the other Participants, and the relationship between achievement of such performance criteria and respective Award levels, are set out in the Schedules 1 and 2, respectively, to the Plan.

(c) Awards.  Awards will be made by the Committee following the end of each Performance Period. Awards shall be paid after the end of the Performance Period, except to the extent that a Participant has made an election to defer the receipt of such Award pursuant to the Company’s deferred compensation plan. The Award amount determined in accordance with Schedule 2 may be increased or decreased by the Committee, provided, however, than any Award may not exceed the applicable Maximum Award amount.

SECTION 5. OTHER CONDITIONS.

(a) No person shall have any claim to an Award under the Plan and there is no obligation for uniformity of treatment of Participants under the Plan. Awards under the Plan may not be assigned or alienated.

(b) Neither the Plan nor any action taken hereunder shall be construed as giving to any Participant the right to be retained in the employ of the Company or any affiliate.

(c) The Company or any affiliate shall have the right to deduct from any Award to be paid under the Plan any federal, state or local taxes required by law to be withheld with respect to such payment.

(d) Awards under the Plan will not be included in base compensation or covered compensation under the retirement programs of the company for purposes of determining pensions, retirement and death related benefits.

SECTION 6. DESIGNATION OF BENEFICIARIES. A Participant may, if the Committee permits, designate a beneficiary or beneficiaries to receive all or part of the Award which may be made to the Participant, or may be payable, after such Participant’s death. A designation of beneficiary shall be made in accordance with procedures specified by the Company and may be replaced by a new designation or may be revoked by the Participant at any time. In case of the Participant’s death, an Award with respect to which a designation of beneficiary has been made (to the extent it is valid and enforceable under applicable law) shall be paid to the designated beneficiary or beneficiaries. Any Award granted or payable to a Participant who is deceased and not subject to such a designation shall be distributed to the Participant’s estate. If there shall be any question as to the legal right of any beneficiary to receive an Award under the Plan, the amount in question may be paid to the estate of the Participant, in which event the Company or its affiliates shall have no further liability to anyone with respect to such amount.

SECTION 7. PLAN ADMINISTRATION.

(a) The Committee shall have full discretionary power to administer and interpret the Plan and to establish rules for its administration (including the power to delegate authority to others to act for and on behalf of the Committee) subject to such resolutions, not inconsistent with the Plan, as may be adopted by the Board. In making any determinations under or referred to in the Plan, the Committee (and its delegates, if any) shall be entitled to rely on opinions, reports, analysis or statements of employees of the Company and its affiliates and of counsel, public accountants and other professional or expert persons.

(b) The Plan shall be governed by the laws of the State of Delaware and applicable Federal law.

SECTION 8. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or terminate the Plan at any time, effective at such date as the Board may determine.

EX-99.1

Exhibit 99.1

News

Cephalon Contacts

Media: Robert Grupp

610-738-6402

rgrupp@cephalon.com

Investors: Chip Merritt

610-738-6376

cmerritt@cephalon.com

For Immediate Release

Cephalon, Inc. Announces Agreements with Barr Laboratories, Inc. Regarding Settlement of PROVIGIL® and ACTIQ® Patent Litigations

Frazer, Pa. — February 1, 2006 — Cephalon, Inc. (Nasdaq: CEPH) announced today that it has entered into agreements with Barr Laboratories, Inc. to settle its pending patent infringement disputes in the United States related to PROVIGIL® (modafinil) Tablets [C-IV] and ACTIQ® (oral transmucosal fentanyl citrate) [C-II].

“This is a transformational event for Cephalon,” said Frank Baldino, Jr., Chairman and Chief Executive Officer.  “Continued PROVIGIL sales provide a new foundation for further accelerating Cephalon’s growth over the next several years.”

In connection with the settlements, Cephalon will grant Barr a non-exclusive royalty-bearing right to market and sell a generic version of PROVIGIL in the United States.  Barr’s license will become effective in October 2011, unless Cephalon obtains a pediatric extension for PROVIGIL which would permit entry by Barr in April 2012.  An earlier entry by Barr may occur based upon the entry of another generic version of PROVIGIL.

“While we remain confident in the strength of the PROVIGIL patent, we believe that with these settlements we have struck an appropriate balance between protecting our intellectual property rights and providing more certainty to our business through at least 2011,” said John E. Osborn, Senior Vice President and General Counsel.

Cephalon and Barr also agreed to a series of business arrangements related to modafinil. Specifically, Barr has agreed to grant to Cephalon a non-exclusive license, effective immediately, to certain of its worldwide intellectual property rights related to modafinil in exchange for an upfront payment. Cephalon also has agreed to purchase certain existing and in-process inventory of the active pharmaceutical ingredient modafinil.

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

With respect to ACTIQ, Cephalon will grant Barr an exclusive royalty-bearing right to market and sell a generic version of ACTIQ in the United States, effective on December 6, 2006.  Barr will pay specified royalties on net profits of its generic ACTIQ product for the period December 6, 2006 through February 3, 2007, subject to certain limitations.  Under an agreement entered into with Barr in mid-2004 in connection with the company’s acquisition of CIMA LABS and pursuant to a Federal Trade Commission order, Cephalon granted Barr a non-exclusive, royalty-free license to sell a generic version of ACTIQ effective on the earlier of final approval of Cephalon’s fentanyl effervescent buccal tablet (FEBT) or February 3, 2007, if Cephalon receives a pediatric extension for ACTIQ (or September 5, 2006, if Cephalon does not receive the extension).

The terms of the agreements are confidential, and are subject to review by the Federal Trade Commission. Financial terms were not disclosed.

The parties will promptly file a dismissal with the United States District Courts for the Districts of New Jersey and Delaware that will conclude pending litigation between the parties regarding PROVIGIL and ACTIQ, respectively.  This settlement and the previously announced settlements with Teva Pharmaceutical Industries Ltd. and its affiliate, Ranbaxy Laboratories Limited, and Mylan Pharmaceuticals Inc. resolve the PROVIGIL litigation with all four firms that Cephalon understands were the first to submit abbreviated new drug applications (ANDAs) with Paragraph IV certifications to the Food and Drug Administration.  As such, Teva, Ranbaxy, Mylan and Barr would be granted the 180-day exclusivity provided by the provisions of the Federal Food, Drug, and Cosmetic Act.  The separate, ongoing PROVIGIL patent litigation between Cephalon and Carlsbad Technology, Inc., pending in the U.S. District Court in New Jersey, is unaffected by these settlements.  The lawsuit against Carlsbad claims infringement of Cephalon’s U.S. Patent No. RE37,516, which covers pharmaceutical compositions and methods of treatment with the form of modafinil contained in PROVIGIL. This patent expires in October 6, 2014 and may be extended by six months (to April 6, 2015) upon acceptance by the FDA of the pediatric study data submitted by the company on December 21, 2005.

As previously announced, Cephalon will reissue 2006 guidance when it releases its fourth quarter and full year 2005 financial results on February 14, 2006 to reflect the recent settlements of the PROVIGIL and ACTIQ patent infringement suits, the closing of the Zeneus acquisition, the current timeline for commercial launch of SPARLON, and the impact of the recent rise in the company’s stock price on the number of shares included in the income per share calculation.  The company expects to report a modest increase in 2006 guidance when issued.

Cephalon, Inc.

Founded in 1987, 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. Cephalon currently employs approximately 2,600 people in the United States and Europe. U.S. sites include the company’s headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota.

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The company currently markets four proprietary products in the United States: PROVIGIL, GABITRIL^® (tiagabine hydrochloride), ACTIQ and TRISENOX^® (arsenic trioxide) injection, and more than 20 products internationally. Full prescribing information for all 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 settlement of this litigation, including whether the Federal Trade Commission will approve the terms of such settlement,  anticipated scientific progress on its research 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 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.

# # #

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EX-99.2

Exhibit 99.2

News

Contacts:

Media:

Steve Holzman

610.738.6126

sholzman@cephalon.com

Investors:

Robert (Chip) Merritt

610.738.6376

cmerritt@cephalon.com

For Immediate Release

Horst Witzel, Dr.-Ing., to Retire from Cephalon Board of Directors

Frazer, Pa. – January 31, 2006 – Cephalon, Inc. (Nasdaq: CEPH) announced today that Horst Witzel, Dr.-Ing., has decided to retire from the Cephalon Board of Directors, to be effective immediately prior to the Company’s Annual Meeting of Stockholders scheduled to be held on May 17, 2006.  Dr. Witzel has been a Director of Cephalon since January 1991.

 Dr. Witzel served as a member of the Board of Executive Directors at Schering A.G., an international pharmaceutical company, beginning in 1962.  From 1986 until his retirement in 1989, he was Chairman of the Board of Executive Directors at Schering A.G.  He currently serves as Chairman of the Supervisory Board of Revotar Biopharmaceuticals, A.G.

“Horst Witzel’s depth of management experience and sound strategic insight have been indispensable assets to Cephalon and were vital to our success in reaching industry-leading financial and scientific achievements,” said Frank Baldino Jr., Ph.D., Cephalon Chairman and CEO.  “During the fifteen years in which he served as director, the company grew to a fully integrated, global biopharmaceutical enterprise, and his wise guidance will always be valued as a key influence in shaping our success.”

Cephalon, Inc.

Founded in 1987, 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. Cephalon currently employs more than 2,600 people in the United States and Europe. U.S. sites include the company’s headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota. Cephalon’s

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

European headquarters are located in Maisons-Alfort, France and other European offices are located in Guildford, England, and Martinsried, Germany.

The company currently markets four proprietary products in the United States: PROVIGIL^® (modafinil) [C-IV], GABITRIL^® (tiagabine hydrochloride), ACTIQ^® (oral transmucosal fentanyl citrate) [C-II] and TRISENOX^® (arsenic trioxide) injection, and more than 20 products internationally. 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 anticipated scientific progress on its research 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 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-99.3

Exhibit 99.3

	News
	Contacts:
	Media:
	Sheryl Williams
	610-738-6493
	swilliam@cephalon.com
	Investors:
	Robert (Chip) Merritt
	610-738-6376
	cmerritt@cephalon.com

For Immediate Release

Cephalon, Inc. Provides Update on Regulatory Status of NUVIGIL™

Company Anticipates Launch of Product in Mid-2006

Frazer, PA, February 1, 2006 — Cephalon, Inc. (Nasdaq: CEPH) announced today that the United States Food and Drug Administration (FDA) has extended the action date for its review of the New Drug Application (NDA) for NUVIGIL™ (armodafinil) Tablets [C-IV] to improve wakefulness in patients suffering from excessive sleepiness associated with narcolepsy, shift work sleep disorder (SWSD) and obstructive sleep apnea/hypopnea syndrome (OSA/HS) to April 30, 2006.

“We will continue to work closely with the FDA to assist them in completing their review of our application in a timely manner and do not anticipate any further delays beyond the April 30 action date,” said Dr. Paul Blake, Executive Vice President, Worldwide Medical and Regulatory Operations. “As pioneers in the development of wake promoting agents, we are excited about the opportunity to bring NUVIGIL to market in the middle of this year.”

A NDA for NUVIGIL was filed with the FDA on March 31, 2005.  The original action date under the Prescription Drug User Fee Act (PDUFA) for the NUVIGIL NDA was January 31, 2006.  At the FDA’s request, the company submitted additional information to FDA in October 2005.  The FDA has informed the company that this submission has been classified as a major amendment to the NDA, which enables the FDA to extend the action date by 90 days to provide the agency time for a full review of the submission.

About NUVIGIL

NUVIGIL is a single-isomer formulation of modafinil, the active pharmaceutical ingredient contained in PROVIGIL^® (modafinil) Tablets [C-IV].  The NDA is based on positive results of four double-blind, randomized, placebo-controlled studies in patients with excessive sleepiness associated with either narcolepsy, SWSD or OSA/HS.  In these studies, NUVIGIL was generally well tolerated, with a safety profile consistent with that observed in studies of PROVIGIL. The most common adverse effects observed included headache, nausea, dizziness, insomnia and anxiety.

— more —

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

Cephalon, Inc. Provides Update on Regulatory Status of NUVIGIL™

About Cephalon, Inc.

Founded in 1987, 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. Cephalon currently employs approximately 2,600 people in the United States and Europe. U.S. sites include the company’s headquarters in Frazer, Pennsylvania, and offices, laboratories or manufacturing facilities in West Chester, Pennsylvania, Salt Lake City, Utah, and suburban Minneapolis, Minnesota.

The company currently markets four proprietary products in the United States: PROVIGIL, GABITRIL^® (tiagabine hydrochloride), ACTIQ^® (oral transmucosal fentanyl citrate) [C-II] and TRISENOX^® (arsenic trioxide) injection and more than 20 products internationally. Full prescribing information for all 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 anticipated scientific progress on its research programs; development of potential pharmaceutical products; interpretation of clinical results, particularly with respect to the NUVIGIL Phase 3 trials; prospects for and timing of regulatory approval of NUVIGIL; anticipated product launch date and potential benefits of NUVIGIL; manufacturing development and capabilities; 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.

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

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