Cephalon, Inc. 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. The merger is expected to close in the second quarter of 2005, after which Salmedix will become a wholly-owned subsidiary of Cephalon.

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.

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 US market for therapeutics to treat NHL is projected to grow 11 per cent annually through 2010.

"We are excited about Treanda and its addition to our oncology portfolio," Frank Baldino, Jr., chairman and CEO of Cephalon said adding, "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."

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).