Sepracor Announces First Quarter 2001 Financial Results

Apr 23, 2001, 01:00 ET from Sepracor Inc.

    MARLBOROUGH, Mass., April 23 /PRNewswire Interactive News Release/ --
 Sepracor Inc. (Nasdaq: SEPR) today announced its consolidated financial
 results for the first quarter of 2001. For the three months ended March 31,
 2001, Sepracor's consolidated revenues were $33.9 million, of which revenues
 from pharmaceutical product sales were approximately $27.1 million.  The net
 loss applicable to common shares was $48.0 million, or $0.63 per share.  These
 consolidated results compare with consolidated revenues of $15.1 million, of
 which revenues from pharmaceutical product sales were approximately
 $13.6 million, and a net loss applicable to common shares of $54.0 million, or
 $0.76 per share for the three months ended March 31, 2000.   As of
 March 31, 2001, Sepracor had approximately $567 million in consolidated cash,
 cash equivalents and marketable securities.
 
     Sepracor Self-Marketed Products
     During the quarter, Sepracor announced the submission of a Supplemental
 New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA)
 seeking clearance to market XOPENEX(R) (levalbuterol HCl) inhalation solution
 at lower dosage strengths for the treatment or prevention of bronchospasm in
 patients 4 to 11 years old. Results of a large-scale (n=340), randomized,
 double-blind, placebo-controlled, parallel-group, pediatric study have been
 included in the supplemental filing to the FDA.
     Launched in May 1999, XOPENEX is sold in the U.S. through Sepracor's sales
 force and co-promoted with the Ross Products Division of Abbott Laboratories.
 Sepracor now markets XOPENEX inhalation solution in dosage strengths of 1.25
 mg and 0.63 mg for nebulizer use.  We are currently developing levalbuterol
 for use in additional delivery formulations, including a metered dose inhaler.
     Sepracor currently has approximately 200 sales representatives that call
 on pediatricians, pulmonologists, allergists and primary care physicians for
 XOPENEX inhalation solution, which is indicated for the treatment or
 prevention of bronchospasm in patients 12 years of age and older with
 reversible obstructive airway disease, such as asthma.  Sepracor plans to
 build its sales force to approximately 900 sales representatives in
 anticipation of the SOLTARA launch.
     During the quarter, Sepracor submitted a New Drug Application (NDA) to the
 FDA seeking clearance to market SOLTARA(TM) brand norastemizole 30 mg capsules
 for the treatment of allergic rhinitis.  The NDA contains data from seven
 large-scale allergic rhinitis studies, more than 30 smaller clinical trials
 and 200 preclinical studies. Sepracor's clinical studies included patients
 with seasonal and perennial allergic rhinitis.  In these studies, over 3,700
 subjects were treated with SOLTARA at doses ranging from 2 mg to 300 mg.  In
 addition to SOLTARA capsules, Sepracor is developing a SOLTARA pseudoephedrine
 combination product for the treatment of allergic rhinitis, as well as a syrup
 and rapidly dissolving tablet.
     Allergies affect an estimated 45 million Americans and can have a
 significant impact on everyday activities at work, school and leisure.
 Indirect costs from absenteeism associated with allergies include an estimated
 6 million missed workdays and 2 million lost school days each year.  In
 addition, there is a growing body of evidence that points to an association
 between allergies and even more serious conditions, such as asthma.
 Prescription antihistamine product sales in the U.S. in 2000 were approaching
 $5 billion, which represents a growth rate of more than 20 percent over the
 previous year, according to IMS Health information.
     In addition to XOPENEX and SOLTARA, Sepracor has several compounds in
 clinical development.  A Phase III development program, including two pivotal
 trials, is underway for (S)-zopiclone, for the treatment of insomnia.  Sleep
 disorders affect approximately 85 million people in the U.S.  The U.S. market
 for prescription sleep products is approaching $1 billion and growing at a
 rate of 30 percent per year.
     Sepracor plans to advance (S)-oxybutynin for the treatment of urge urinary
 incontinence and (R,R)-formoterol, a long-acting bronchodilator, into Phase
 III clinical studies in 2001.  The (R)-sibutramine metabolite for depression
 is in large-scale studies.  Additional candidates will soon advance into
 Phase II efficacy trials and Phase I safety studies.  Sepracor also plans to
 file Investigational New Drug applications for new clinical candidates in
 2001.
     Pursuant to the Prescription Drug User Fee Act, the FDA has 60 days to
 review an NDA or sNDA submission prior to officially accepting it for filing.
 
     Partnered Program Update
     During the quarter, Sepracor began receiving royalties on sales of
 ALLEGRA(R) brand fexofenadine HCl, a nonsedating antihistamine for the
 treatment of allergies, in the U.S., Canada, and Australia. Royalties on sales
 in Japan were initiated in December of 2000 and in Europe in 1999. Going
 forward, Sepracor will receive royalties on sales of ALLEGRA in all major
 markets.
     On January 19, 2001, Schering-Plough Corporation received an approval
 letter from the FDA for CLARINEX (TM) Tablets (desloratadine), an active
 metabolite of CLARITIN(R), for the treatment of seasonal allergic rhinitis.
 Schering-Plough also reported that the FDA has advised the company that Good
 Manufacturing Practices deficiencies cited in facility inspection reports must
 be resolved prior to granting approval of the company's pending NDA for
 CLARINEX Tablets. Schering-Plough has stated that there are no outstanding
 scientific or clinical issues that would affect approval of the product and
 that they are ready to launch CLARINEX into the U.S. market upon approval.
 Sepracor is entitled to receive royalties on sales of CLARINEX upon launch of
 the product in the U.S.
     Also during the quarter, UCB Pharma announced that it had received
 marketing approval from the German Health Authorities and launched XUSAL(TM)
 (levocetirizine), a single isomer of ZYRTEC(R), for the treatment of allergic
 rhinitis and urticaria. The product is expected to be launched in other
 European countries upon approval. Sepracor expects to receive royalties on
 sales of XUSAL beginning in the second quarter of 2001.
     Sepracor has been notified by Janssen Pharmaceutica, N.V., that during the
 week of April 23, 2001, clinical investigators will be informed that two Phase
 II trials to evaluate the efficacy and safety of ticalopride
 ((+)-norcisapride) in subjects with symptoms of gastroesophageal reflux
 disease (GERD) or gastroparesis are being suspended pending further analysis
 of a small number of adverse events reported in GERD and diabetic patients.
 Although it is unknown if these events are related to the drug, Janssen has
 decided that it is prudent to suspend the trials to better understand the
 observations made.  Janssen has stated that it has taken steps to preserve the
 scientific integrity in order to reinitiate the trials and facilitate
 regulatory acceptance of the results. Extensive preclinical and Phase I data
 provided evidence that the drug is safe at doses used in this study.
 
     Sepracor is a pharmaceutical company that develops and commercializes
 proprietary pharmaceutical products for the primary care and specialty
 markets.
 
     This news release contains forward-looking statements that involve risks
 and uncertainties, including statements with respect to the safety, efficacy,
 potential benefits, and successful development of the company's
 pharmaceuticals under development. Among the factors that could cause actual
 results to differ materially from those indicated by such forward-looking
 statements are: the submission of NDAs and sNDAs, acceptance of submitted NDAs
 and sNDAs for filing, and approval of NDAs and sNDAs; the results of the
 company's clinical trials with respect to its products under development; the
 commercial success of Sepracor's products; the ability of the company to
 attract and retain qualified personnel; the scope of the company's patent
 protection with respect to such product candidates; the availability of
 sufficient funds to continue research and development efforts; and certain
 other factors that may affect future operating results and are detailed in the
 company's periodic reports filed with the Securities and Exchange Commission.
 
     Soltara is a trademark and Xopenex is a registered trademark of Sepracor
 Inc.  Allegra is a registered trademark of Merrell Pharmaceuticals. Xusal is a
 trademark and Zyrtec is a registered trademark of UCB, Societe Anonyme.
 Clarinex is a trademark and Claritin is a registered trademark of Schering
 Corporation.
     Condensed consolidated statements of operations and consolidated balance
 sheets follow.
 
    In conjunction with this press release, Sepracor will host a conference
 call and live webcast beginning at 8:30 a.m. EST.  To participate via
 telephone, dial either (612) 332-0107, (612) 288-0329, (612) 332-0806 or (612)
 332-0530. For live webcasting, go to the Sepracor website at www.sepracor.com
 and access the Investor Information section.  Click on either the live webcast
 link or microphone icon to listen.
 
 
                                   Sepracor Inc.
                  Condensed Consolidated Statements of Operations
                                    (Unaudited)
      (in thousands, except per share amounts)
                                                         Three months ended
                                                              March 31,
                                                       2001               2000
 
     Revenues:
 
        Product  sales                              $28,449            $13,866
        R&D, license fees, royalties and other        5,491              1,267
          Total revenues                             33,940             15,133
 
        Cost of revenue                               5,271              4,970
 
          Gross margin                               28,669             10,163
 
     Operating expenses:
        Research and development                     49,507             32,005
        Sales and marketing                          20,349             17,884
        General and administrative and
         patent costs                                 5,604              4,718
          Total operating expenses                   75,460             54,607
 
          Loss from operations                      (46,791)           (44,444)
 
     Other income (expense):
        Interest income                               9,124              7,593
        Interest expense                            (11,723)            (9,981)
        Other income (expenses), net(A)                 235             (7,442)
        Equity in investee gain (loss)(B)               -                 (330)
          Total other income (expense)               (2,364)           (10,160)
 
     Net loss before minority interests             (49,155)           (54,604)
 
     Minority interests in subsidiaries               1,125                567
 
     Net loss                                      $(48,030)          $(54,037)
 
 
     Basic and diluted net loss per
      common share                                   $(0.63)            $(0.76)
 
     Shares used in computing basic and
      diluted
        net loss per common share:                   76,473             71,001
 
 
         (A) Includes $7,497 in expenses relating to prepaid interest and fees
             for the conversion of
             6 1/4% convertible debentures for the three months ended March 31,
             2000.
         (B) Represents Sepracor's portion of HemaSure Inc. losses for the
             three months ended 2000.
 
 
                                 Sepracor Inc.
                     Condensed Consolidated Balance Sheets
                                  (Unaudited)
 
 
 
      (in thousands)                              March 31,      December 31,
                                                    2001               2000
      ASSETS
 
        Cash, short and long-term
         investments                              $567,401           $634,479
        Accounts receivable, net                    14,989             14,756
        Inventory, net                               4,639              5,998
        Property, plant and equipment,
         net                                        22,154             22,676
        Investment in Versicor                      14,586             13,746
        Other assets (A)                             61,304             59,303
 
           Total assets                           $685,073           $750,958
 
 
 
      LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIT)
 
        Accounts payable and accrued
         expenses                                  $76,665            $96,225
        Other liabilities                           11,502              8,288
        Debt payable                                 1,173              1,242
        Convertible subordinated
         debentures(B)                             759,960            852,818
        Minority interests in
         subsidiaries                                5,921              7,059
        Total stockholders' equity
         (deficit)                                (170,148)          (214,674)
 
           Total liabilities and
            stockholders' equity
            (deficit)                             $685,073           $750,958
 
 
 
 
        (A) Includes $18,237 and $20,734 of net unamortized deferred financing
            costs relating to the convertible debenture
            offerings and $31,330 and $31,789 of net unamortized
            intangible assets in 2001 and 2000, respectively.
 
        (B) Balance in 2001 consists of $299,960 of 7% convertible debentures
            due 2005, and $460,000 of 5% convertible debentures due 2007.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X81665866
 
 

SOURCE Sepracor Inc.
    MARLBOROUGH, Mass., April 23 /PRNewswire Interactive News Release/ --
 Sepracor Inc. (Nasdaq: SEPR) today announced its consolidated financial
 results for the first quarter of 2001. For the three months ended March 31,
 2001, Sepracor's consolidated revenues were $33.9 million, of which revenues
 from pharmaceutical product sales were approximately $27.1 million.  The net
 loss applicable to common shares was $48.0 million, or $0.63 per share.  These
 consolidated results compare with consolidated revenues of $15.1 million, of
 which revenues from pharmaceutical product sales were approximately
 $13.6 million, and a net loss applicable to common shares of $54.0 million, or
 $0.76 per share for the three months ended March 31, 2000.   As of
 March 31, 2001, Sepracor had approximately $567 million in consolidated cash,
 cash equivalents and marketable securities.
 
     Sepracor Self-Marketed Products
     During the quarter, Sepracor announced the submission of a Supplemental
 New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA)
 seeking clearance to market XOPENEX(R) (levalbuterol HCl) inhalation solution
 at lower dosage strengths for the treatment or prevention of bronchospasm in
 patients 4 to 11 years old. Results of a large-scale (n=340), randomized,
 double-blind, placebo-controlled, parallel-group, pediatric study have been
 included in the supplemental filing to the FDA.
     Launched in May 1999, XOPENEX is sold in the U.S. through Sepracor's sales
 force and co-promoted with the Ross Products Division of Abbott Laboratories.
 Sepracor now markets XOPENEX inhalation solution in dosage strengths of 1.25
 mg and 0.63 mg for nebulizer use.  We are currently developing levalbuterol
 for use in additional delivery formulations, including a metered dose inhaler.
     Sepracor currently has approximately 200 sales representatives that call
 on pediatricians, pulmonologists, allergists and primary care physicians for
 XOPENEX inhalation solution, which is indicated for the treatment or
 prevention of bronchospasm in patients 12 years of age and older with
 reversible obstructive airway disease, such as asthma.  Sepracor plans to
 build its sales force to approximately 900 sales representatives in
 anticipation of the SOLTARA launch.
     During the quarter, Sepracor submitted a New Drug Application (NDA) to the
 FDA seeking clearance to market SOLTARA(TM) brand norastemizole 30 mg capsules
 for the treatment of allergic rhinitis.  The NDA contains data from seven
 large-scale allergic rhinitis studies, more than 30 smaller clinical trials
 and 200 preclinical studies. Sepracor's clinical studies included patients
 with seasonal and perennial allergic rhinitis.  In these studies, over 3,700
 subjects were treated with SOLTARA at doses ranging from 2 mg to 300 mg.  In
 addition to SOLTARA capsules, Sepracor is developing a SOLTARA pseudoephedrine
 combination product for the treatment of allergic rhinitis, as well as a syrup
 and rapidly dissolving tablet.
     Allergies affect an estimated 45 million Americans and can have a
 significant impact on everyday activities at work, school and leisure.
 Indirect costs from absenteeism associated with allergies include an estimated
 6 million missed workdays and 2 million lost school days each year.  In
 addition, there is a growing body of evidence that points to an association
 between allergies and even more serious conditions, such as asthma.
 Prescription antihistamine product sales in the U.S. in 2000 were approaching
 $5 billion, which represents a growth rate of more than 20 percent over the
 previous year, according to IMS Health information.
     In addition to XOPENEX and SOLTARA, Sepracor has several compounds in
 clinical development.  A Phase III development program, including two pivotal
 trials, is underway for (S)-zopiclone, for the treatment of insomnia.  Sleep
 disorders affect approximately 85 million people in the U.S.  The U.S. market
 for prescription sleep products is approaching $1 billion and growing at a
 rate of 30 percent per year.
     Sepracor plans to advance (S)-oxybutynin for the treatment of urge urinary
 incontinence and (R,R)-formoterol, a long-acting bronchodilator, into Phase
 III clinical studies in 2001.  The (R)-sibutramine metabolite for depression
 is in large-scale studies.  Additional candidates will soon advance into
 Phase II efficacy trials and Phase I safety studies.  Sepracor also plans to
 file Investigational New Drug applications for new clinical candidates in
 2001.
     Pursuant to the Prescription Drug User Fee Act, the FDA has 60 days to
 review an NDA or sNDA submission prior to officially accepting it for filing.
 
     Partnered Program Update
     During the quarter, Sepracor began receiving royalties on sales of
 ALLEGRA(R) brand fexofenadine HCl, a nonsedating antihistamine for the
 treatment of allergies, in the U.S., Canada, and Australia. Royalties on sales
 in Japan were initiated in December of 2000 and in Europe in 1999. Going
 forward, Sepracor will receive royalties on sales of ALLEGRA in all major
 markets.
     On January 19, 2001, Schering-Plough Corporation received an approval
 letter from the FDA for CLARINEX (TM) Tablets (desloratadine), an active
 metabolite of CLARITIN(R), for the treatment of seasonal allergic rhinitis.
 Schering-Plough also reported that the FDA has advised the company that Good
 Manufacturing Practices deficiencies cited in facility inspection reports must
 be resolved prior to granting approval of the company's pending NDA for
 CLARINEX Tablets. Schering-Plough has stated that there are no outstanding
 scientific or clinical issues that would affect approval of the product and
 that they are ready to launch CLARINEX into the U.S. market upon approval.
 Sepracor is entitled to receive royalties on sales of CLARINEX upon launch of
 the product in the U.S.
     Also during the quarter, UCB Pharma announced that it had received
 marketing approval from the German Health Authorities and launched XUSAL(TM)
 (levocetirizine), a single isomer of ZYRTEC(R), for the treatment of allergic
 rhinitis and urticaria. The product is expected to be launched in other
 European countries upon approval. Sepracor expects to receive royalties on
 sales of XUSAL beginning in the second quarter of 2001.
     Sepracor has been notified by Janssen Pharmaceutica, N.V., that during the
 week of April 23, 2001, clinical investigators will be informed that two Phase
 II trials to evaluate the efficacy and safety of ticalopride
 ((+)-norcisapride) in subjects with symptoms of gastroesophageal reflux
 disease (GERD) or gastroparesis are being suspended pending further analysis
 of a small number of adverse events reported in GERD and diabetic patients.
 Although it is unknown if these events are related to the drug, Janssen has
 decided that it is prudent to suspend the trials to better understand the
 observations made.  Janssen has stated that it has taken steps to preserve the
 scientific integrity in order to reinitiate the trials and facilitate
 regulatory acceptance of the results. Extensive preclinical and Phase I data
 provided evidence that the drug is safe at doses used in this study.
 
     Sepracor is a pharmaceutical company that develops and commercializes
 proprietary pharmaceutical products for the primary care and specialty
 markets.
 
     This news release contains forward-looking statements that involve risks
 and uncertainties, including statements with respect to the safety, efficacy,
 potential benefits, and successful development of the company's
 pharmaceuticals under development. Among the factors that could cause actual
 results to differ materially from those indicated by such forward-looking
 statements are: the submission of NDAs and sNDAs, acceptance of submitted NDAs
 and sNDAs for filing, and approval of NDAs and sNDAs; the results of the
 company's clinical trials with respect to its products under development; the
 commercial success of Sepracor's products; the ability of the company to
 attract and retain qualified personnel; the scope of the company's patent
 protection with respect to such product candidates; the availability of
 sufficient funds to continue research and development efforts; and certain
 other factors that may affect future operating results and are detailed in the
 company's periodic reports filed with the Securities and Exchange Commission.
 
     Soltara is a trademark and Xopenex is a registered trademark of Sepracor
 Inc.  Allegra is a registered trademark of Merrell Pharmaceuticals. Xusal is a
 trademark and Zyrtec is a registered trademark of UCB, Societe Anonyme.
 Clarinex is a trademark and Claritin is a registered trademark of Schering
 Corporation.
     Condensed consolidated statements of operations and consolidated balance
 sheets follow.
 
    In conjunction with this press release, Sepracor will host a conference
 call and live webcast beginning at 8:30 a.m. EST.  To participate via
 telephone, dial either (612) 332-0107, (612) 288-0329, (612) 332-0806 or (612)
 332-0530. For live webcasting, go to the Sepracor website at www.sepracor.com
 and access the Investor Information section.  Click on either the live webcast
 link or microphone icon to listen.
 
 
                                   Sepracor Inc.
                  Condensed Consolidated Statements of Operations
                                    (Unaudited)
      (in thousands, except per share amounts)
                                                         Three months ended
                                                              March 31,
                                                       2001               2000
 
     Revenues:
 
        Product  sales                              $28,449            $13,866
        R&D, license fees, royalties and other        5,491              1,267
          Total revenues                             33,940             15,133
 
        Cost of revenue                               5,271              4,970
 
          Gross margin                               28,669             10,163
 
     Operating expenses:
        Research and development                     49,507             32,005
        Sales and marketing                          20,349             17,884
        General and administrative and
         patent costs                                 5,604              4,718
          Total operating expenses                   75,460             54,607
 
          Loss from operations                      (46,791)           (44,444)
 
     Other income (expense):
        Interest income                               9,124              7,593
        Interest expense                            (11,723)            (9,981)
        Other income (expenses), net(A)                 235             (7,442)
        Equity in investee gain (loss)(B)               -                 (330)
          Total other income (expense)               (2,364)           (10,160)
 
     Net loss before minority interests             (49,155)           (54,604)
 
     Minority interests in subsidiaries               1,125                567
 
     Net loss                                      $(48,030)          $(54,037)
 
 
     Basic and diluted net loss per
      common share                                   $(0.63)            $(0.76)
 
     Shares used in computing basic and
      diluted
        net loss per common share:                   76,473             71,001
 
 
         (A) Includes $7,497 in expenses relating to prepaid interest and fees
             for the conversion of
             6 1/4% convertible debentures for the three months ended March 31,
             2000.
         (B) Represents Sepracor's portion of HemaSure Inc. losses for the
             three months ended 2000.
 
 
                                 Sepracor Inc.
                     Condensed Consolidated Balance Sheets
                                  (Unaudited)
 
 
 
      (in thousands)                              March 31,      December 31,
                                                    2001               2000
      ASSETS
 
        Cash, short and long-term
         investments                              $567,401           $634,479
        Accounts receivable, net                    14,989             14,756
        Inventory, net                               4,639              5,998
        Property, plant and equipment,
         net                                        22,154             22,676
        Investment in Versicor                      14,586             13,746
        Other assets (A)                             61,304             59,303
 
           Total assets                           $685,073           $750,958
 
 
 
      LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIT)
 
        Accounts payable and accrued
         expenses                                  $76,665            $96,225
        Other liabilities                           11,502              8,288
        Debt payable                                 1,173              1,242
        Convertible subordinated
         debentures(B)                             759,960            852,818
        Minority interests in
         subsidiaries                                5,921              7,059
        Total stockholders' equity
         (deficit)                                (170,148)          (214,674)
 
           Total liabilities and
            stockholders' equity
            (deficit)                             $685,073           $750,958
 
 
 
 
        (A) Includes $18,237 and $20,734 of net unamortized deferred financing
            costs relating to the convertible debenture
            offerings and $31,330 and $31,789 of net unamortized
            intangible assets in 2001 and 2000, respectively.
 
        (B) Balance in 2001 consists of $299,960 of 7% convertible debentures
            due 2005, and $460,000 of 5% convertible debentures due 2007.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X81665866
 
 SOURCE  Sepracor Inc.