BOSTON, May 18 (Reuters) - Medicare plans to cut reimbursement levels for Sepracor Inc.'s (SEPR.O: Quote, Profile , Research) asthma drug Xopenex to the level of a generic rival, according to Jon LeCroy, an analyst at Natexis Bleichroeder Inc.
LeCroy said the plan, released on the Web site for the Centers for Medicare & Medicaid Services, was responsible for a drop of nearly 15 percent in Sepracor's shares in mid-day trading on Friday.
"It was expected that a ruling was coming, but I didn't expect them to cut it to the price of a generic," said LeCroy.
While Medicare did not specify the size of the price cut, only placing it in the same code as a generic drug called albuterol, LeCroy said he expected the drop to be as much as 70 to 80 percent and affect about 15 percent of Xopenex sales.
Officials at Sepracor, which also makes the insomnia drug Lunesta, were not immediately available for comment.
Last year, sales of Xopenex approached $600 million or roughly half the company's total sales.
Xopenex inhalation solution, which accounts for the bulk of the drug's sales, is administered via a nebulizer which converts liquid medication into a fine, inhaleable mist.
The company also sells Xopenex HFA, metered-dose inhalers which are hand-held, pressurized canisters that deliver medications directly to the lungs.
Sepracor's shares fell $7.62, or 14.6 percent, to $44.66 in late morning trade on Nasda |
