UPDATE: Sepracor Would Give Dainippon Sumitomo US Sales Force
September 02 2009 - 5:52PM
Dow Jones News
Dainippon Sumitomo Pharma Co. Ltd.'s (4506.TO) reported interest
in buying Sepracor Inc. (SEPR) for about $2.7 billion could allow
the Japanese company to prepare for the U.S. launch of its
schizophrenia drug, Lurasidone, which it plans to file with the
Food and Drug Administration in early 2010.
Shares of Sepracor were halted for pending news Wednesday
afternoon in the U.S. after they surged 26% to $22.80 on the report
in the Nikkei, a Japanese newspaper. With the gain, the company has
a market capitalization of about $2.5 billion.
Sepracor officials weren't immediately available for comment. A
U.S.-based spokesperson for Dainippon declined to comment, while
officials in Japan weren't available.
Although Sepracor traded close to $30 early last year, Piper
Jaffray analyst David Amsellem said that the company was unlikely
to fetch much more than the Dainippon deal from another bidder,
because the company is facing generic exposure in coming years and
has a thin product pipeline.
Last week, Dainippon reported the success of its second
late-stage trial of Lurasidone and confirmed it is on track to file
for marketing approval. If it is approved, it will be the company's
first drug in the U.S.
To make such a move, Dainippon is likely to need a sales force
with experience in selling such drugs in the competitive U.S.
market.
Sepracor could be a good fit for a company looking for that type
of infrastructure, said RBC Capital analyst Adam Greene.
Sepracor, which had $1.3 billion in 2008 revenue, gets most of
its sales from insomnia treatment Lunesta and the asthma treatment
Xopenex, and filed for U.S. marketing approval of Stedesa, an
epilepsy treatment, in June.
But both of those top sellers could lose U.S. patent protection
in coming years. Lunesta's growth has already been hurt since the
Sanofi-Aventis's (SNY) Ambien insomnia drug became available in
cheaper generic versions.
"I think this is probably the best possible outcome for Sepracor
shareholders," Amsellem said.
If confirmed, the deal would be another example of Japanese drug
makers extending their reach into the U.S.
Last year, Takeda Pharmaceutical Co. Ltd. (4502.TO) acquired
U.S. biotech firm Millennium Pharmaceuticals for $8.8 billion,
while Eisai Co. Ltd. (4523.TO) bought MGI Pharma Inc. for $3.9
billion.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
(Shara Tibken contributed to this story.)