Right on cue last week, the FDA tentatively approved Sepracor's
Investors must be banking that Sepracor's head start will allow the drug maker to establish prescribing habits among the nation's physicians and shut out the competition. And the competition is guaranteed to get fierce.
The competition, as I described last November, includes Neurocrine
Along with indiplon, Sanofi-Synthelabo's
I have to admit that I was surprised at investors' reaction to the news. Adding about $1.5 billion in market capitalization to Sepracor, which was already valued near $3 billion seems optimistic to me. While I think that Estorra has the potential to move Sepracor into the black after losing about $135 million last year, given the strength of the competition likely to come, I'm still of the opinion that Sepracor is fully valued.
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Fool contributor David Nierengarten, Ph.D., works with a biotechnology venture capital fund. He is an active member of the TMF community as DavidMN, and enjoys the Biotechnology discussion board. He doesn't own shares of companies listed, but does enjoy a full night's sleep when he can get it.