Sepracor Falls on Analyst Downgrade
Monday October 22, 5:27 pm ET
Sepracor Drops to 3-Year Low After Analyst Downgrades on Sales and 3rd-Quarter Earnings
NEW YORK (AP) -- Shares of Sepracor Inc. fell to a three-year low Monday after a UBS analyst downgraded the stock, saying the drug developer will report "poor" third-quarter earnings and does not have a strategy to deal with weakening sales of its products.
Annabel Samimy downgraded the stock to "Sell" from "Neutral," and cut her price target to $20 per share from $29. She said none of the company's drugs, including sleep aid Lunesta and respiratory drug Xopenex, are selling as well as she expected, and prices will continue to decline.
"All product lines appear weak and any cost-cutting efforts will not mask deteriorating fundamentals," she said.
Shares fell 70 cents, or 3 percent, to end at $23.01 Monday after hitting a low of $22.25. The stock has surrendered almost two-thirds of its value since January, as Sepracor's profit forecasts have missed Wall Street estimates and Medicare policies reduced the selling price of Xopenex.
Generic sleep aids are hurting Lunesta sales, Samimy wrote, lowering the price and keeping prescriptions low. Xopenex UDV is losing market share, and prescriptions for Brovana, a treatment for chronic obstructive pulmonary disease, are also disappointing.
Samimy said the company has made some progress in cutting costs. But Sepracor's plan to restructure its sales force may weaken sales further, she said.
She now expects the company to report a profit of 13 cents per share in the quarter, on $273.6 million in revenue.
On average, analysts polled by Thomson Financial forecast a profit of 26 cents per share on $289.4 million in revenue. |
