Cephalon Inc. has entered into an agreement with Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals USA, Inc. to settle its pending patent infringement disputes in the United States and the United Kingdom related to Provigil (modafinil) tablets [C-IV].

In connection with the settlement, Cephalon will grant Teva a non- exclusive royalty-bearing right to market and sell a generic version of Provigil. Teva's license in the United States will become effective in October 2011 absent a paediatric extension for Provigil, which would delay the entry date by six months (to April 2012). Outside the United States, the parties agreed to comparable terms for the license effective date, which generally allow for entry in October 2012. An earlier entry by Teva in any of the territories may occur based upon the entry of another generic version of Provigil, claims a company release.

The companies also agreed to a series of business arrangements related to modafinil. Teva has agreed to grant to Cephalon a non-exclusive license, effective immediately, to its worldwide intellectual property rights related to the manufacture, development and formulation of modafinil in exchange for royalty payments. Cephalon has also agreed to enter into certain arrangements with Teva related to Teva's manufacture and supply of the active pharmaceutical ingredient modafinil.

The terms of the agreement are confidential and are subject to review by the US Federal Trade Commission.

The parties will promptly file dismissals with prejudice with the United States District Court for the District of New Jersey and United Kingdom High Court of Justice, Chancery Division, which will conclude all pending litigations between the parties regarding Provigil.

This settlement does not affect the status of the ongoing Provigil patent litigations between Cephalon and certain other generic companies that are pending in the US District Court in New Jersey.

Cephalon Inc. is an international biopharmaceutical company that discovers, develops and markets innovative products to treat sleep and neurological disorders, cancer and pain.