Sepracor has loss in fourth quarter; Drug company to restate results.

Byline: Lisa Eckelbecker

MARLBORO - Shares of Sepracor Inc. dropped to their lowest point in more than four years after the drug developer reported a fourth-quarter loss and said it would restate financial results back to 2005.

Chief Executive Adrian Adams described Sepracor's past year as "challenging" during a conference call with analysts but said, "I believe that we are well positioned to take Sepracor into a new phase of momentum."

The company yesterday reported a loss of $5 million, or 5 cents per diluted share, during the fourth quarter ended Dec. 31, 2007, as it absorbed a $75 million payment to Portuguese drug maker Bial for the rights to develop an experimental epilepsy treatment. The company also posted lower revenue of nearly $340 million because Medicare, the nation's health program for disabled and older people, reduced its reimbursements for the asthma treatment Xopenex.

At the same time a year earlier, Sepracor reported net income of $95.2 million, or 82 cents per diluted share, on revenue of $353 million.

Sepracor stock closed yesterday at $21.47 on the Nasdaq Stock Market on volume of nearly 4.9 million shares. It was the lowest price for Sepracor shares since August 2003.

Sepracor is seeking to trim certain expenses while growing revenue through development of its own treatments and licensing products from others. In the fall, Sepracor reported plans to cut 300 sales jobs and reduce 2008 sales and marketing expenses by $90 million to $100 million.

Yet the company also struck the deal with Bial and acquired U.S. rights to Norway-based Nycomed ASA's Alvesco for asthma and Omnaris for allergies.

Sepracor said Xopenex, an inhaled solution, contributed $142.4 million in sales during the fourth quarter, down from $176.3 million at the same time a year earlier. A version of Xopenex used in hand-held inhalers posted $24.9 million in sales during the fourth quarter, up from $20.9 million a year earlier.

Sepracor rang up $149.8 million in sales of the sleep drug Lunesta, compared to $147.6 million a year earlier. Brovana, an inhaled drug launched last April for people with chronic obstructive pulmonary disease, brought in $6.3 million.

Mr. Adams said Sepracor will boost its sales force, which numbered about 1,600 workers at the end of 2007, with 200 additional contract sales workers to promote Omnaris and Alvesco. The company reported plans to launch U.S. sales of both drugs this year.

Sepracor said it posted net income of $58.3 million, or 50 cents per diluted share, on revenue of $1.23 billion in 2007, compared to higher net income of $171.2 million, or $1.48 per diluted share, on revenue of $1.18 billion in 2006. The company, which previously reported that it would repay Medicaid for overpayments from the nation's health plan for the poor, said it will restate results for the full years 2005 and 2006 and for the first three quarters of 2007 to reduce its revenues by about $60.2 million.