Cephalon, Inc has signed an agreement to acquire Mepha AG and its subsidiaries, a profitable, privately-held, Swiss-based pharmaceutical company. Mepha has specific expertise in innovative dosage formulations and markets both generic and branded generic products. The acquisition diversifies the company's business mix, doubles the size of its international business, and provides an attractive platform to launch current and future products in new, developed and emerging markets.

Mepha manufactures and markets over 120 products in 50 countries and recognized sales of approximately CHF 400 million in 2009. With its exposure to high-growth international markets, and a track record of innovation, Mepha has achieved compound annual growth rates (CAGR) in sales of more than 13 per cent over the last five years. In addition to its existing products, Mepha has a broad pipeline of approximately 50 chemical entities planned for launch over the next five years.

Under the terms of the agreement, Cephalon will purchase Mepha AG for CHF 622.5 million, or an estimated US$ 590 million, from the Merckle family-owned Mepha Holding AG, subject to adjustments upon closing. The transaction is expected to close in the next 10-12 weeks upon completion of certain closing conditions, including receipt of applicable antitrust approvals. Cephalon expects that the acquisition will be accretive to adjusted earnings per share in 2010 and will update its 2010 guidance when it reports full year 2009 financial results on February 11, 2010. In the interim, the company withdraws its full year 2010 guidance issued on October 27, 2009.

"The addition of Mepha will transform our international business overnight, expanding our ability to serve global markets and reach patients in new territories for the first time," said Frank Baldino, chairman and CEO of Cephalon. "With this deal, we now serve all three types of pharmaceutical markets, proprietary branded, generic and branded generic. We believe this balance will increase the growth and stability of our business," added Baldino.

Alain Aragues, executive vice president and president of Cephalon Europe, said, "The acquisition of Mepha will help us to significantly grow our current business and positions us as a more attractive partner for further business development opportunities in the European, Middle East and African regions."

Dr Thomas Villiger, CEO of Mepha Group, added, "Mepha and Cephalon complement each other as far as markets and products are concerned. Mepha's leading position on the Swiss market will be immediately enhanced by the addition of innovative therapies from Cephalon."

Deutsche Bank Securities Inc. served as exclusive financial advisor to Cephalon.

Founded in 1949, Mepha is a Swiss-based pharmaceutical company marketing branded and non-branded generics as well as specialty products in more than 50 countries.

Cephalon is an international biopharmaceutical company dedicated to discovering, developing and bringing to market medications for difficult to treat and rare conditions.