Big-pharma potential acquisition Sepracor
Sepracor is reducing its sales force by about 300 positions because of the Centers for Medicare and Medicaid Services' decision last spring to pay for its asthma drug, XOPENEX, at the generic drug level. The price cuts, which started this quarter, resulted in a nearly 25% drop in year-over-year sales for the third quarter. Fortunately, the government's decision doesn't seem to be affecting the retail market, which has historically been between 70% and 75% of XOPENEX sales.
Sales of Sepracor's sleep aid Lunesta headed in the opposite direction, increasing 13.6% year over year. Lunesta sales had been relatively flat over the past few years, so the jump is a little surprising, especially given the introduction of generic versions of Sanofi-Aventis'
Sales of its two smaller products and royalties from partners like Schering-Plough
With no drugs in phase 3 trials, the near-term outlook for Sepracor lies in its ability to increase sales of Lunesta. We'll have to wait another quarter or two to see if sales in the U.S. continue to increase, or if this quarter was a fluke.
The real growth will likely come from global sales. Sepracor recently joined GlaxoSmithKline
Sepracor gave guidance of a 74% increase in EPS for next year, excluding the charge for litigation settlement this year. That seems like a pretty tall order, and I'm not sure that the decreased costs and increased sales of Lunesta will be enough to turn things around that significantly.