After Cephalon, Inc. disclosed it received a subpoena by the U.S. Postal Service Office of Inspector General in connection with its pain drug Fentora an investigation on behalf of current long term investors over possible breaches of fiduciary duties by certain officers and directors at Cephalon, Inc. was announced.

The investigation by a law firm concerns whether certain officers and directors of Cephalon, Inc. (Public, NASDAQ:CEPH) breached their fiduciary duties in connection with Cephalons pain drug Fentora and the relating the subpoena and investigation by the U.S. Postal Service Office of Inspector General in conjunction with the Civil Division of the U.Ss Attorney's Office in Philadelphia.
The investigation by a law firm focuses also on whether certain officers and directors of Cephalon, Inc. (Public, NASDAQ:CEPH) can be held liable for past off-label marketing particles allegations regarding its drugs Actiq, Provigil from January 1, 2001 through December 31, 2006 and its drug Gabitril from January 2, 2001 through February 18, 2005 that resulted in a 2008 settlement with a payment of $425million by Cephalon, Inc

Cephalons 12months Total Revenue went from $1.764billion in 2006 to $2.192billion in 2009. Its Net Income went from $146.51million in 2006 to $342.63milion in 2009. For the first three quarters in 2010 Cephalon, Inc. reported a combined nine months that succeeds its 12month Total Revenue from 2009 and a combined nine months Net Income for the first three quarters in 2010 that also succeeds its 12month Net Income for 2009. Cephalon, Inc. reported combined nine months Total Revenue of $2.637billion with a combined nine months Net Income of $442.69million for the first three quarters in 2010.

Even though shares of Cephalon, Inc. traded in 2005 as low as $38.65 and increased in the beginning of 2006 to over $82 per share, shares of CEPH fell in mid June 06 to $51.63 per share before increasing in 2007 again to over $82 to $83.86 in June. Then CEPH shares traded in February 08 again under $60 and as low as $59.38 per share before again increasing until September to as high as $79.88 per share. During 2009 CEPH shares traded again as high as $78.86 per share in February and then fell to as low as $53.29 in July. In March 2010 CEPH shares traded again as high as $70.18 per share but fell during 2010 to as low as $55.95 in July. In January 2011 CEPH shares fell again below $60 and traded at $58.33 on Jan 28.
Then CEPH shares increased and traded at $61.25 on February 8. Then onFriday Feb 11 CEPH shares dropped more than $4 to as low as $56.45 per share after Cephalon, Inc. disclosed that it received in January 2011 a subpoena from the U.S. Postal Service Office of Inspector General. The subpoena requests information about its cancer-pain drug Fentora.
Cephalon, Inc. said that this investigation related to Postal Service employees' workers' compensation claims is being conducted by the U.S. Postal Service Office of Inspector General in conjunction with the Civil Division of the U.Ss Attorney's Office in Philadelphia.

U.S. Postal Service Office of Inspector General has previously been involved in government investigations of allegations of illegal marketing practices by drug companies including Cephalon.
In September 2008, Cephalon, Inc. entered into a settlement agreement with the U.S. Department of Justice, the U.S. Attorney's Office, the Office of the Inspector General of the Department of Health and Human Services, TRICARE Management Activity, the U.S. Office of Personnel Management and the relators to settle the outstanding False Claims Act claims alleging off-label promotion, thus promotion of durgs for uses that weren't approved by the Food and Drug Administration, of its drug Actiq and Provigil from January 1, 2001 through December 31, 2006 and its drug Gabitril from January 2, 2001 through February 18, 2005. As part of the Settlement Agreement Cephalon, Inc agreed to pay a total of $375 million plus interest of $11.3 million. The allegations against Cephalon resulted from whistle-blower lawsuits filed by four former employees As part of the settlement the four whistleblowers, three of those were filed by former Cephalon sales representatives who were disturbed by Cephalons marketing practices, received more than $46million from the federal share of the settlement amount.

The U.S. Postal Service Office of Inspector General special agent in charges stated that these types of investigations are an important part of the Postal Service Office of Inspector Generals mission to prevent and detect fraud, waste and misconduct [] and to promote the integrity and efficiency of postal programs [..] such as the federal workers compensation program, under which these drugs were paid for by the postal services [and those] drugs promoted off-label can lead to potential safety issues and unnecessary, inflated program costs..