Last year proved to be a wild one for shareholders of pharmaceutical company Sepracor (NASDAQ:SEPR). Shares fluctuated wildly over concern and then relief that more competition was not imminently coming -- namely from Neurocrine Biosciences (NASDAQ:NBIX) -- against Lunesta in its key insomnia market.

Today Sepracor released its fourth-quarter financial results. Sales gained 15% versus the fourth quarter last year. While this is still strong growth, it's not nearly as heady as the year-over-year sales expansion that Sepracor experienced earlier in the year. The main cause of the sales slowdown was the complete lack of growth in Lunesta sales, which came in at $148 million for the quarter. The lack of growth was most likely due to a 15% scaling down of sales and marketing expenses. The future Lunesta sales trend as we start 2007 is something investors should pay attention to.

Total Product Sales*

Y-O-Y Growth

Q4 2006



Q3 2006



Q2 2006



Q1 2006



*In millions

Sepracor will try to combat this slowing growth starting in the second quarter, when it launches the recently approved Brovana to treat chronic obstructive pulmonary disease. Now that Brovana is on the market, Sepracor's pipeline is pretty threadbare, although it does plan on moving both of its depression treatments into phase 2 studies later this year.

It's nice to see Sepracor get its share count under control after diluting shareholders 28% in 2005. It also plans to get rid of over a third of that $1.2 billion convertible debt liability hanging over its head this quarter.

While the Brovana launch will reignite sales growth in the second quarter, it's a little disconcerting to see Lunesta sales stop expanding on the small cutback in marketing and sales expenses. All last year, some investors were clamoring for Sepracor to sell itself to a larger pharma that could better market Lunesta. If the sales growth doesn't return to this key product, maybe it's time for Sepracor to start shopping itself around -- if it can find a bidder for the right price.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.