FDA has a long memory, and the next time Provigil came knocking in 2006, seeking approval for ADHD in children, the agency
slammed the door in its face. Two Phase III clinical trials showed the drug to be a kinder, gentler alternative to Ritalin.
But Cephalon's insistence on rebranding the higher-dose ADHD version of modafinil as Sparlon—and touting it as an "important
new drug" to investors—may have provoked the agency.
The advisory panel gave Sparlon, whose active ingredient had by then been in use for six years by more than three million
patients, a thumbs-down because of a single report linking use of modafinil to a skin rash diagnosed as the exceedingly rare
but life-threatening Stevens-Johnson Syndrome. That the panel's sole dermatologist not only doubted that the rash, if it was
in fact SJS, was dose related, but also provided the sole "approval" vote didn't exactly inspire confidence in the agency's
When Cephalon got word that FDA wanted an additional trial, it was déjà vu all over again for Baldino, who once again dropped
the drug. Harry Tracy, who blasted FDA in Neuroinvestment for refusing to approve Sparlon with a black-box warning, said, "It was another case of Cephalon being a little less diplomatic
than was wise. The FDA responded by putting up the SJS roadblock, Frank basically called them on it, the FDA did not bend,
and Frank"—here he laughs fondly—"reverted to his old style."
Taking Care of Business
A product like Provigil is likely to come around only once in any CEO's lifetime. "We keep chasing Provigil's use. But the
truth is, we go to major meetings with one abstract only to find 10. Last year, I found a guy in Colombia using it to wake
people up out of comas," Baldino says, adding with a laugh, "But when I write my book, it'll all have been my idea." And except for the Sparlon misstep and other foot-in-mouth errors, Baldino has showered his prize brand with TLC—and
In December 2002, Teva, Ranbaxy, Mylan, and Barr flooded FDA with ANDAs for generic versions of modafinil, threatening to
shred Provigil's patent, set to expire in 2015. Cephalon filed suit the following March. The case, which turned on esoteric
issues like particle size, cast a sudden cloud over the pill's brilliant career, and Cephalon's stock dropped 25 percent.
As a fallback, the company invested millions in a race to develop a new version of Provigil by reformulating it as a single
isomer. While this tweak resulted in a longer-acting—and, Cephalon claims, cleaner, more potent—compound, its true value
was less in extending the drug's release than in extending its franchise. By producing Nuvigil, with its once-daily dosing
and 12-hour effect, Cephalon hoped to do an end run around the generic offensive, grabbing as many Provigil users before they
hit. And it's worth noting that the company's big plans for Nuvigil include seeking approval as a cognitive enhancer for patients
suffering from Alzheimer's, Parkinson's, MS, and other conditions.
In the event, Cephalon settled all four patent challenges, expertly defusing the generics with deals allowing them to market
their knockoffs in 2012, plus agreements involving licensing, co-developments, and other enticements, totaling payments of
$138 million. Cephalon stock jumped 50 percent, and Baldino boasted that "we were able to get six more years of patent protection—that's
$4 billion in sales that no one expected."