Cephalon (West Chester, PA) has agreed to purchase Anesta (Salt Lake City, UT) in an all-share deal worth $444 million, providing the company with additional sales and marketing muscle, a high-growth oncology pain product, and access to a novel drug-delivery system. The acquisition fits well with Cephalon's strategy to become a specialist in niche markets for sleep and other neurological disorders and in cancer. Although Cephalon paid a 40% premium for Anesta's shares, Frank Baldino, Cepahlon's chair and CEO, said that the deal would “shorten Cephalon's time to profitability”. In addition to Provigil, its treatment for sleepiness associated with narcolepsy, Cephalon will derive revenue from Actiq—Anesta's treatment for breakthrough cancer pain based on its patented oral transmucosal system.

Unfortunately for Anesta shareholders, shortly after the deal was announced, a 113-patient double-blind, placebo-controlled trial showed that Provigil did not help treat attention deficit hyperactivity disorder. At the end of July, when Cephalon agreed to buy Annesta, Cephalon's shares were around $66, or around $31.5 per Anesta share. After the Provigil announcement, Anesta stockholders would be getting under $23.5 worth of Cephalon shares per share.