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Treatment for ADHD in Children and Adolescents

Cephalon Receives Non-Approvable Letter on Sparlon

Company Will Not Pursue Further Development of the Product

FRAZER, Pa., August 9, 2006 -- Cephalon, Inc. announced today that it has received a letter from the U.S. Food and Drug Administration (FDA) stating that the company's supplemental new drug application (sNDA) for Sparlon (modafinil) Tablets [C-IV], a proprietary dosage form of modafinil for the treatment of attention- deficit/hyperactivity disorder (ADHD) in children and adolescents, is not approvable. In consideration of the FDA's decision, the company has determined that it will not pursue further development of Sparlon.

"Obviously, we are extremely disappointed and surprised that the agency disagreed with the opinions of our experts, which were based on photographic and other evidence concerning a single suspected case of Stevens Johnson syndrome," said Frank Baldino, Jr., Ph.D., Chairman and CEO.

This decision by the FDA has no impact on the company's previously issued sales and earnings guidance or on its expectations for strong earnings in 2007.

Second Quarter 2006 Financial Results

The company's August 3, 2006 press release announcing its unaudited financial results for the three- and six-month periods ended June 30, 2006 did not reflect the impact of FDA's decision today on the Sparlon sNDA. The company has now determined to fully reserve the $8.6 million of net Sparlon inventory on its balance sheet as of June 30, 2006. The Company's previously reported adjusted income per common share for the three and six months ended June 30, 2006 does not change.

The company expects to file its Form 10-Q for the quarterly period ended June 30, 2006 no later than August 14, 2006, which will reflect the impact of this event on the financial statements and related disclosures.

Conference Call Scheduled

Cephalon's management will discuss Sparlon in a conference call with investors beginning at 5:30 p.m. EDT today, Wednesday, August 09, 2006, 2006. To participate in the conference call, dial +1-888-856-9426 and refer to conference code 4413648.

Source: Cephalon, Inc.

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Posted: August 2006

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