Enter multiple symbols separated by commas

Sepracor Shares Fall as Profit Falls Short, 2007 Forecast Cut

Sepracor posted lower-than-expected results Friday and cut its 2007 outlook amid competition for its insomnia drug and reduced reimbursement for its asthma drug, sending its shares down 20 percent.

The Marlborough, Massachusetts-based drug company said net profit fell to $6.1 million, or 5 cents a share, from $11 million, or 10 cents a share, a year ago.

Revenue rose 5 percent to $278.1 million. Analysts, on average, expected revenue of $327.2 million.

Revenue from Lunesta, the company's insomnia drug, grew 3 percent to $143.0 million, falling short of expectations on competition from a generic version of rival Ambien.

"The numbers are a disaster," said Ian Sanderson, an analyst at Cowen & Co.

Last month Medicare, the U.S. government health plan for the elderly, cut reimbursement levels on Sepracor's asthma drug Xopenex, with the cut going into effect July 1.

Under the plan, the Centers for Medicare & Medicaid Services is applying the same reimbursement code to Xopenex, which is an altered form of albuterol, as cheaper, generic albuterol.

Sales from Xopenex inhaled solution fell to $104.9 million from $115.7 million a year ago, also short of expectations.

"The outlook for Lunesta is difficult, the outlook for Xopenex is difficult, and they don't have much in their pipeline," Sanderson said.

Sepracor's shares had already fallen nearly 40 percent this year before their decline on Friday, compared to a 2 percent gain in the Nasdaq Biotechnology Index, as the company faces multiple competitive and regulatory challenges.

The company said it now expects 2007 earnings per share of $1.00 to $1.30 including a 28-cent-per-share charge for settlement of litigation.

In April, the company said it expected 2007 earnings per share of $2.11, excluding one-time items.

The company said it now expects 2007 revenue of $1.23 billion to $1.3 billion. Previously it forecast revenue of $1.43 billion to $1.49 billion.

Analysts on average had expected 2007 earnings excluding one-time items of $1.99 a share and revenue of $1.36 billion.

The company's shares fell 20 percent to $30.41 in early trading on Nasdaq.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Dani Mathers, the 2015 Playmate of the Year, poses during a luncheon on the garden grounds of the Playboy Mansion in Los Angeles, May 14, 2015.

    Playboy on Thursday launched its completely safe-for-work mobile app Playboy NOW, part of a strategy to make more mainstream content.

  • Li Hejun, Hanergy Holding Group

    In the history of sudden wealth loss, Li Hejun may have set a new record.

  • Marc Cuban

    Ask Mark Cuban what the next big thing in technology is, you'll get an answer straight out of a science fiction film.

U.S. Video

  • Restoring relations with Cuba

    I never expected to get this far, says Carlos Gutierrez, Albright Stonebridge Group, discussing the road ahead in establishing an embassy in Cuba and possible stumbling blocks, including banking issues.

  • Central bank 'coddling' markets: Pro

    Mike Ryan, UBS chief investment strategist, and Anthony Chan, Chase chief economist, share their outlook on markets ahead of Janet Yellen's speech later today.

  • Summer stock moves

    CNBC's Dominic Chu takes a look at the old adage: "Sell in May and go away," to see if there are some stocks investors may want to put on summer retreat this year.