Sepracor Inc.: PharmaVitae Profile

CHAPTER 1 ABOUT THIS PROFILE 2

Executive summary 2

Quarterly news update 2

Company introduction 2

Company sales 2

Company financials 2

Key products and competitors 3

Data sourcing 3

Sales data 3

Analyst consensus 3

CHAPTER 2 EXECUTIVE SUMMARY 4

Key findings 4

Prescription pharmaceutical sales performance, 2001-13 5

Financial performance, 2001-13 6

Sepracor: PharmaVitae forecasts at a glance 7

Strategic insight 8

Stereoisomer purification drives unique business model 8

Near-term growth potential squeezed by market pressures 10

Xopenex sales hit by new reimbursement rate 10

Ambien generics arrest further Lunesta uptake 11

Operating profit margin flat through 2008 11

SWOT analysis 12

Strengths 12

Weaknesses 14

Opportunities 15

Threats 16

CHAPTER 3 QUARTERLY NEWS UPDATE 20

Product developments 20

Deals and alliances 21

Product deals 21

Technology deals 21

M&A activity 22

Company announcements 22

Future product milestones 23

CHAPTER 4 COMPANY INTRODUCTION 24

Key findings 24

Background 25

Key corporate developments 25

M&A history 27

IBF Biotechnics acquired 27

Spin off of BioSepra and HemaSure 27

Merger of SepraChem with Sterling Organics 27

Divestment of Versicor Pharmaceuticals 27

Oryx Pharmaceuticals 28

CHAPTER 5 COMPANY SALES 29

Key findings 29

Prescription pharmaceutical sales and growth rate analysis, 2001-13 30

Historical analysis 31

Forecast analysis 31

Product analysis 33

Product analysis, 2001-07 34

Growth drivers 35

Product analysis, 2007-13 36

Growth drivers 37

Growth resistors 39

Therapy area analysis 40

Therapy area analysis, 2001-07 41

Therapy area analysis, 2007-13 42

Therapy area focus, 2001-13 43

Geographic analysis 44

Geographic analysis, 2001-07 45

Geographic analysis, 2007-13 46

Launch/core/expiry analysis 48

Explanation of launch/core/expiry analysis 48

Launch analysis, 2007-13 49

Core analysis, 2007-13 50

Expiry analysis, 2007-13 51

Launch/core/expiry configuration, 2007-13 52

Molecule type analysis 53

Molecule type analysis, 2001-07 54

Molecule type analysis, 2007-13 54

Externalization analysis 55

Externalization analysis, 2001-07 56

Externalization analysis, 2007-13 56

CHAPTER 6 COMPANY FINANCIALS 58

Key findings 58

Reconciliation between PharmaVitae-formatted prescription pharma sales and company-reported total sales, 2001-07 59

Financial statements, 2001-07 60

Profit and loss account, 2001-07 60

Balance sheet, 2001-07 61

Operating costs and profit analysis 62

Operating costs and profit analysis, 2001-07 63

Operating cost ratio and profit margin analysis, 2001-07 64

Operating cost ratio and profit margin analysis, 2007-13 65

Operating costs and profit analysis, 2007-13 67

Return on capital employed analysis 69

Capital employed analysis, 2001-07 70

Return on capital employed analysis, 2001-07 72

Market capitalization analysis 74

Market capitalization analysis, 2001-07 74

Total shareholder returns analysis, 2001-07 76

CHAPTER 7 KEY PRODUCTS AND COMPETITORS 77

Key findings 77

Overview 78

Respiratory 79

Brovana 79

Overview 80

Sales forecast 81

Xopenex franchise (Xopenex Inhalation Solution/Xopenex HFA) 83

Overview 84

Sales forecast 86

Ciclesonide franchise (Alvesco/Omnaris) 89

Overview 90

Sales forecast 92

Central nervous system 96

Lunesta 96

Overview 97

Sales forecast 98

Ambien generics arrest further Lunesta prescriptions 99

CHAPTER 8 APPENDIX 102

R&D pipeline 102

References 103

Abbreviations 104

Exchange rates 105

List of Tables

Table 1: Sepracor - PharmaVitae forecasts at a glance 7

Table 2: Sepracor key product developments, Q1-Q3 2008 20

Table 3: Sepracor product deals and alliances, Q1 2008 21

Table 4: Sepracor technology deals and alliances, Q1 2008 21

Table 5: Sepracor M&A activity, Q1-Q3 2008 22

Table 6: Sepracor company announcements, Q1 2008 22

Table 7: Sepracor future product milestones, 2008-10 23

Table 8: Sepracor product portfolio overview ($m), 2001-07 34

Table 9: Sepracor product portfolio overview ($m), 2007-13 36

Table 10: Sepracor product portfolio overview ($m), 2001-07 41

Table 11: Sepracor product portfolio overview ($m), 2007-13 42

Table 12: Sepracor portfolio overview by geographic region ($m), 2001-07 45

Table 13: Sepracor portfolio overview by geographic region ($m), 2007-13 46

Table 14: Sepracor launch portfolio overview ($m), 2007-13 49

Table 15: Sepracor core portfolio overview ($m), 2007-13 50

Table 16: Sepracor expiry portfolio overview ($m), 2007-13 51

Table 17: Sepracor portfolio overview by molecule type ($m), 2001-07 54

Table 18: Sepracor product portfolio overview by molecule type ($m), 2007-13 54

Table 19: Sepracor product portfolio overview by source ($m), 2001-07 56

Table 20: Sepracor product portfolio overview by source ($m), 2007-13 56

Table 21: Total Sepracor sales by business unit ($m), 2001-07 59

Table 22: Sepracor profit and loss account ($m), 2001-07 60

Table 23: Sepracor balance sheet ($m), 2001-07 61

Table 24: Sepracor operating revenue/cost analysis ($m), 2001-07 63

Table 25: Sepracor operating cost ratio analysis (% of total revenues), 2001-07 64

Table 26: Sepracor operating cost ratio analysis (% of total revenues), 2007-13 65

Table 27: Sepracor operating revenue/cost analysis ($m), 2007-13 67

Table 28: Sepracor capital employed ($m), 2001-07 70

Table 29: Sepracor EBIT return on capital employed ($m), 2001-07 72

Table 30: Sepracor EBIT pre-tax return/capital employed driver analysis (%), 2001-07 73

Table 31: Sepracor market capitalization ($ billion), 2001-07 74

Table 32: Sepracor total shareholder returns (annual %), 2001-07 76

Table 33: Key products overview 78

Table 34: Brovana: overview 80

Table 35: Brovana: sales forecast ($m), 2007-13 81

Table 36: Xopenex Inhalation Solution: overview 84

Table 37: Xopenex HFA: overview 85

Table 38: Xopenex Inhalation Solution: sales forecast ($m), 2007-13 86

Table 39: Xopenex HFA: sales forecast ($m), 2007-13 86

Table 40: Alvesco: overview 90

Table 41: Omnaris: overview 91

Table 42: Alvesco: sales forecast ($m), 2007-13 92

Table 43: Omnaris: sales forecast ($m), 2007-13 92

Table 44: Lunesta: overview 97

Table 45: Lunesta: sales forecast ($m), 2007-13 98

Table 46: Sepracor's R&D pipeline (Phase I-registration) 102

Table 47: Exchange rates, 2007 105

List of Figures

Figure 1: Sepracor prescription pharmaceutical performance, sales ($m) and growth rate (%), 2001-13 5

Figure 2: Sepracor's financial performance ($m), 2001-13 6

Figure 3: Sepracor's marketed stereoisomer preparations 8

Figure 4: Sepracor SWOT analysis 12

Figure 5: Sepracor prescription pharmaceutical performance, sales ($m) and growth rate (%), 2001-13 30

Figure 6: Sepracor key sales growth driver & resistors ($m), 2001-07 34

Figure 7: Sepracor key sales growth drivers & resistors ($m), 2007-13 37

Figure 8: Sepracor prescription pharmaceutical sales by therapy area ($m), 2001-13 40

Figure 9: Sepracor prescription pharma sales by therapy area (% of total), 2001-13 43

Figure 10: Sepracor prescription pharmaceutical sales by geographic region ($m), 2001-13 44

Figure 11: Sepracor drivers and resistors by geographic region ($m), 2007-13 47

Figure 12: Sepracor launch/core/expiry configuration ($m), 2007-13 52

Figure 13: Sepracor prescription pharmaceutical sales by molecule type ($m), 2001-13 53

Figure 14: Sepracor prescription pharmaceutical sales by source ($m), 2001-13 55

Figure 15: Sepracor growth drivers and resistors by source ($m), 2007-13 57

Figure 16: Sepracor operating revenue/cost analysis ($m), 2001-13 62

Figure 17: Sepracor operating cost ratio analysis (% of total revenues), 2001-13 66

Figure 18: Sepracor's return on capital employed, EBIT margin and capital turnover, 2001-07 69

Figure 19: Return on capital employed formula 73

Figure 20: Sepracor market capitalization ($ billion), 2001-07 75

Figure 21: Sepracor total shareholder returns vs. S&P 500 ($m), 2001-07 76

Figure 22: Share of US nonbenzodiazepine prescriptions (%), Q107-Q208 100