Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: Rocky9 who wrote (10090)	5/21/2007 11:46:20 AM
From: Robohogs	of 10280

Lunesta new and total shares flat on the week - i.e., decreases were with the market move. More on HFA later. On Xop, apparently Medicare used a loophole to lower pricing. More research: AGE Grandfathering Provision Allows CMS to Circumvent LCA: Broader Implications Lowers target to 65 from 72. Initial pricing set at .45-1.29 but should drift down to generic pricing over time if Sepracor keeps selling. Generic and Xopenex both to be sold under same code as existed back in 2003. Section 1947a of the Medicare Modernization Act. 15-25% chance of an overturn - little legal options to SEPR. Checkmate US Government. Drop EPS by 20+% vs. 10+% for overall sales. Their 2009 has 1 billion for L, 378 for Xop, 210 for HFA, 286 for Brovana and 35 for royalties with EPS of 3.85 at a 30% tax. Note makes reference to reference pricing model from Europe and says other drugs could come into play. Citi Surprise Decision by CMS Takes Down Xopenex Citi also lowers Lunesta estimates. 2 o'clock call at a number I do not want to post here. 2007 and 2008 down by about 50 cents and 2009 down by 26 cents. Target to 60 from 66 with 3.60 in 2009 EPS. Leerink CMS preempts Xopenex NCA Basically says their consultants think this is done deal. Use 24% of sales. First to note that this could also happen to Brovana (which I began pondering over weekend) - but Dey is only expected to be 10% lower and Dey not likely to get code until next year. Fair value to 58 from 74. Off of focus list. 2008 to 3.01 from 3.90. Fair value goes to $28 if private payors implement same coding. With same coding and expense cuts, $59 us target. They have 2008 Xop at 478 with MDI at 304 and Brovana at 124. Lunesta is 762. Cowen - within 5% of fair value. 2009 nums: L at 750, Xop at 495 (have generics in 2011), Mdi at 270, Brovana at 180, royalties at 60. Assumes settlement allowing the first 2 generics in 2 years in front of last method patent. Also notes Brovana issues with CMS to come. Expect price decreases through the year for L. No takeover to come. SEPR cutting pricing aggressively for HFA. Dey to pressure Brovana. Pipeline early and of little interest. Jon

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