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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (7348)	2/7/2004 3:04:00 AM
From: Icebrg	Read Replies (1) \| Respond to of 10280

Sepracor plans to hire 940, pending FDA approval By Mark Hollmer The Business Journals Updated: 7:00 p.m. ET Feb. 08, 2004 MARLBOROUGH -- Sepracor Inc. plans to nearly double its work force and hire more than 900 people this year to handle the launch of its highly anticipated anti-insomnia drug -- assuming the FDA approves it at the end of this month. The approximately 940 new jobs would either focus on supervising or handling direct sales of Estorra, with about 140 positions based in Massachusetts at the drug development company's Marlborough headquarters. Sepracor chief financial officer David Southwell says the remaining 800 would handle Estorra sales and promotion throughout the country. "It's ... the drug that is going to drive a lot of our near-term growth in Massachusetts jobs. We think we're going to grow very rapidly," Southwell said. Sepracor nearly got its FDA ruling on Dec. 1, but the U.S. Food and Drug Administration delayed action until the end of February with no explanation. The move briefly rattled investors and nudged down Sepracor's stock price despite company assurances that the delay didn't appear to relate to drug safety or effectiveness. The FDA's ruling on Estorra, whatever the outcome, will arguably be one of the biggest milestones in Sepracor's 20-year history. Sepracor launched in 1984 as a drug developer that has, to date, out-licensed three drugs from which it collects royalties, including allergy pill Allegra, produced by Aventis Pharmaceuticals Inc. in Kansas City, Mo. But Sepracor is now aggressively focused on developing and marketing its own drugs, having spent more than $200 million in research and development in 2003 alone. And an FDA go-ahead would give Sepracor a crucial second federally-approved drug, envisioned to help the company reach profitability and also achieve its plan of becoming a full-scale independent drug developer. Sepracor's asthma drug Xopenex, launched commercially in 1999, brought in $286 million in U.S. sales for 2003 and is expected to sell in the $340 million range in 2004. The Wall Street Journal last year reported that Estorra could reach $750 million in annual sales if it debuts in 2004. An FDA rejection would harm Sepracor, in part because it's carrying more than $1 billion in debt to help finance its transformation into an independent drug company from its old role as drug discoverer. Sepracor is carrying $430 million in debt due in 2007 and $750 million in recently refinanced subordinated notes due in Dec. 2008 and 2010, Southwell said. Some of the debt, however, is convertible into stock, and the company had $840 million in cash on hand as of the end of 2003. Sepracor lost $135.9 million in its 2003 fiscal year that ended Dec. 31, versus a $276.5 million net loss in 2002. Revenue, based in large part on Xopenex sales, soared in 2003, reaching $344 million for the year, a big jump from $239 million in consolidated revenue for 2002. FDA refusal or delay, says Deutsche Bank analyst David Steinberg, would force Sepracor's stock to plummet and put the company's ability to generate future profits in question. That being said, the San Francisco-based analyst added that Estorra's approval is considered likely. "If it gets approved, it could become a very large drug," Steinberg said. "This product could be the beginning of a long run of approved products, which ultimately could create a very large company. It's a real seminal event." Arthur Wong, a debt analyst with Standard & Poor's in New York, said Estorra's approval is extremely important for Sepracor's long-term future but said Xopenex's success is a positive sign that Estorra's will likely follow. "They have a very successful product on the market and have shown that they are able to develop a product ... get FDA approval and are able to market it," he said. Southwell agrees that Estorra is important to Sepracor's long-term plans but insists the company will move on, should Estorra be rejected or delayed again. Several other drugs are in Sepracor's long-term development pipeline, he said. In addition, the company is hoping to launch an inhaler version of Xopenex beyond the mist version it sells for use in nebulizer machines. "It is by no means the most important drug in our pipeline," Southwell said. msnbc.msn.com