Sepracor Posts Loss on License Payment, Cuts Forecast
Sepracor Inc., the maker of Lunesta
sleeping pills, reported a loss on a drug licensing payment and
lower reimbursement rates for its asthma drug Xopenex. The
company will restate earnings since 2005, and cut its forecast.
The fourth-quarter net loss of $5 million, or 5 cents a
share, followed a restated net profit of $95.2 million, or 82
cents, a year earlier, the Marlborough, Massachusetts-based
company said today in a statement.
Sepracor plans to cut jobs this year to trim $100 million
in expenses. It also said it hopes to boost revenue by acquiring
inhaled asthma and allergy products from Nycomed ASA of Norway
and by helping develop Portuguese drugmaker Bials experimental
epilepsy treatment.
“This past year was a challenging but transitional year
for Sepracor, Chief Executive Officer Adrian Adams said in the
statement. “We are well-positioned for a period of potential
product launches and continued revenue and earnings
opportunities.
Sepracor today cut its 2008 net earnings forecast to $1.40
to $1.80 a share, from an October range of $2.35 to $2.45. The
company today also forecast revenue of $1.35 billion to $1.45
billion this year on new licensed products.
Revenue in the quarter fell 3.8 percent to $340 million
from a restated $353.3 million. The average estimate was $341.2
million in an 18-analyst Bloomberg survey. Sales of the sleep
drug Lunesta rose 1.5 percent to $149.8 million. Xopenex sales
fell 19 percent to $142.4 million.
$75 Million Payment
Medicare, the U.S. health program for the elderly and
disabled, cut Xopenex reimbursement rates in July, which
“resulted in a significantly lower per-unit payment for the
dose most commonly used by beneficiaries, the company said
today.
Sepracor fell $1.37, or 6 percent, to $21.47 at 4:30 p.m.
New York time, its biggest one-day slide since July 27. The
stock has lost 59 percent of its value in 12 months in Nasdaq
Stock Market composite trading.
The company booked a $75 million payment to Bial in the
quarter, as part of an agreement announced in January to help
develop an experimental epilepsy medicine.
Sepracor will pay as much as $100 million more if the
medicine meets development and marketing targets, it said last
month. It will seek U.S. approval of the drug, called BIA 2-093,
late this year or early 2009, the company reiterated today.
Restating Earnings
The company will restate earnings for the past three years
over excess reimbursements from a government health-insurance
program, reducing revenue by about $60.2 million, Sepracor said
today.
The planned restatements follow a January announcement it
will repay Medicaid, the federal and state program for the poor,
after a review of prices used to set drug rates. The company
found discrepancies that artificially boosted its reimbursement.
U.S. law requires that government programs get the best price
available for medicines.
Sepracor notified the Centers for Medicare and Medicaid
Services, the agency in charge, of potential errors in the
information it provided to Medicaid during the past six years.
The company said it wasnt clear if prices given to a state
pharmacy assistance program should have been included when it
calculated the best price for Medicaid. It also may have
provided discount prices to ineligible parties.
