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Biotech / Medical : Sepracor-Looks very promising
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To: Robohogs who wrote (10158)7/27/2007 8:04:56 AM
From: quidditch  Read Replies (1) of 10280
 
Pre-opening indications showing bid/asked in the $33-$34 range. Here is GS's early take (no advanced degrees required for these analysts): [EDIT: Clearly TB knew when to get out--he always did have exquisite timing. He made a boatload. Plus ca change....]

News
Sepracor reported adjusted 2Q2007 EPS of $0.05, below consensus EPS
and our estimate of $0.37. Revenues of $278 million were below our
estimate of $329 million and consensus expectations of $327 million.
Separately, Sepracor announced the European filing of Lunesta and
Japanese partnership of Lunesta with Eisai.
Analysis
The downside was primarily driven by revenues. Revenues for key
products were below our view: Lunesta $143 million versus our estimate of
$145 million, Xopenex UDV $105 million versus our estimate of $131
million (pharmacies de-stocked ahead of the July 1 Medicare
reimbursement change; the company is attempting to retain access in
Medicare part B, but we will be interested to see if this will spill over to the
commercial market), Xopenex HFA $12 million versus our estimate of $25
million (weekly TRx’s pointed to a 17% sequential rise, so destocking or
discounting may be a factor), Brovana $6 million versus our estimate of
$20 million (prescriptions had been slow, but we had assumed stocking).
Gross margins of 90.8% compared with our 90.5% estimate. R&D expenses
of $45 million compared to our view of $52 million. SG&A expenses of
$192 million compare to our estimate of $192 million. Our estimates and
price target are under review.
Implications
We would expect the shares to trade lower, dependent upon
management’s guidance comments on the conference call. We believe
management is implementing the right strategy to extend its franchise
overseas, but the US business is clearly under siege. We will provide an
update after management’s conference call at 8:30 a.m. ET.

quid
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