By Crispin Littlehales

The World Economic Forum this week inducted Frazer, Pennsylvania-based biopharma Cephalon into its new “Community of Global Growth Companies.”

The cross-industry community, which formally convenes for the first time in Dalian in China’s northeast Dongbei region in September, groups together up and coming companies the WEF sees as the next generation of global multinationals.

The WEF aims to see membership grow to 330 by mid-summer and 600 by next year. To join this charmed circle, companies have to be working beyond their homemarkets, have annual revenues of $10 million to $2 billion and annual growth in excess of 15 percent.

Cephalon, which markets products for sleep disorders, pain, seizure, alcohol dependence, and cancer, appears well within the WEF’s criteria. In 2006, revenue increased 44 percent, to $1.67 billion, and expansion into Europe and Asia is in the cards.

“I would like 40 percent of our revenue coming from markets outside the United States within a decade,” says Frank Baldino, Cephalon’s founder and CEO. “That means doubling our sales in Europe in the near future.”

Company plans call for growing through both acquisition and product licensing.Cephalon markets several products in Europe right now—Provigil to improve wakefulness and Actiq for pain being two—and will seek European regulatory approval for its cancer pain drug, Fentora, just cleared by the U.S. Food and Drug Administration in September.

China is also in its sights. “China will emerge as an important player in pharmaceuticals,” Mr. Baldino says.“If they position healthcare as a major focus for their economy, and a major priority for their government, then we will have a growth market that should be very strong.”

The biopharma, in fact, is seeking Beijing’s approval for several products now. “We need to be well positioned to take advantage of this growth in the decade to come,” Mr. Baldino adds, hinting of plans to sign Chinese distributors.

Aiming to bring an innovative approach to developing and marketing drugs, Cephalon started up 20 years ago and has since grown to 3,100 employees.Looking for ways to reduce financial risk, it secured a patent for Provigil, an antidote for excessive sleep, through 2012, and now seeks FDA approval for its Nuvigil product, another sleep disorder drug—locking up the “wakefulness” franchise as it’s known in the trade.

By protecting its intellectual property, for the next decade or so Cephalon will enjoy market exclusivity for its two products in what is expected to become a billion dollar marketplace.

To counter the impact of cancer pain drug Actiq “going generic” in 2006, it moved quickly to secure Fentora’s approval to keep revenues strong in that franchise.

“We have to change the model by which drugs are developed,” Mr. Baldino says. He reckons that within 15 years a blood test will determine the mix of drugs likely to work best with individuals. “We’ve got to be ready to treat patients technologically and that’s going to affect how we price drugs, how we sell drugs, and how we distribute drugs.”

Meanwhile, in the here and now, Cephalon is gathering more strength in oncology.On January 24, its arsenic compound, Trisenox, was shown to improve survival rates of adults with acute proyelocytic leukemia (AML), a rare form of leukemia, in a U.S. National Cancer Institute-sponsored clinical trial.

Mr. Baldino says one of the bigger challenges Cephalon faces is figuring out how to maintain an entrepreneurial culture and move up to a global scale. “People come here for impact—you can make a big difference here—and for independence,” he says. “But what we do today isn’t going to have an impact until 2010 so we’ve got to see the future and anticipate.”