Sepracor
Encyclopedia
Sepracor, Inc. is a pharmaceutical company
founded in 1984 by Tim Barberich. It was originally located in Princeton
, New Jersey and then re-located to Marlborough
, Massachusetts. On October 12, 2010, the company changed its name to Sunovion.
. All of the launch drugs were manufactured under the leadership of Walter Piskorski.
Sepracor has broad exposure to generic competition, as both Xopenex inhalation solution and Lunesta brands will face expiring patents at nearly the same time in March 2012, leaving Omnaris, Alvesco, Brovana and Stedesa to fill in the revenue gaps. Sepracor suffered five recent setbacks. The first was the announcement that it had completed the analysis and validation of the preliminary results of a Phase II study evaluating the efficacy and safety of SEP-225289 for the treatment of Major Depressive Disorder where Sepracor determined that SEP-225289 did not meet the primary efficacy endpoint (a reduction in symptoms of depression following eight weeks of treatment). However, the positive control in the study (venlafaxine extended-release)did achieve separation from placebo that was statistically significant on the primary endpoint. Dr Corrigan, responsible for the study, could not explain why clinical study of his design has failed. Secondly, Sepracor has announced patent interference between Sepracor and Wyeth. The interference seeks to determine the priority of invention claims directed to racemic O-desmethylvenlafaxine (ODMV) succinate. Wyeth markets racemic ODMV succinate (the active racemic metabolites of venlafaxine) in the US under the brand name PRISTIQ for the treatment of major depressive disorder in adults. Thirdly, the FDA has notified Sepracor that two clinical studies on eszopiclone in children have been put on clinical hold due the FDAs concerns regarding non-clinical data that could be relevant to the administration of eszopiclone in children. Fourthly, the European Medicines Agency, the European Union’s version of the U.S. Food and Drug Administration, has approved Lunesta for sale, but didn’t grant the request by Sepracor to designate it as a new active substance. Because of the EMA decision, Sepracor and GSK are terminating completely their plan to market the drug in the EU. Lastly, Sepracor recently announced it has reached a licensing agreement and settled litigation with a division of Teva Pharmaceuticals USA to make a generic version of Sepracor’s inhaled asthma drug Xopenex.
obtained exclusive worldwide rights to Sepracor's patents relating to desloratadine
, discovered and patented by Drs. Gunnar Aberg, John McCullough, Emil Smith and Dean A. Handley. In January 2002, Schering-Plough launched the product as Clarinex for the treatment of seasonal allergic rhinitis (SAR).
which is marketed as Allegra by Sanofi-Aventis
. Fexofenadine is a nonsedating antihistamine for the treatment of allergic rhinitis. In December 1993, Sepracor licensed the United States
patent for the use of fexofenadine to Hoechst Marion Roussel (HMRI). HMRI developed the drug and launched it in late 1996 as Allegra brand fexofenadine hydrochloride.
, Nova Scotia, Canada
. Sepracor Canada is a pilot and commercial plant operation and the commercial manufacturing site since launch for levalbuterol HCl, the active ingredient in XOPENEX; eszopiclone, the active ingredient in LUNESTA; and arformoterol tartrate, the active ingredient in Brovana.
for the rights to sell Eszopiclone (under the name Lunivia rather than Lunesta) in Europe
. Sepracor was expected to receive approximately 155 million dollars if the deal went through. In 2008 Sepracor submitted an application to the EMA
(the European Union's equivalent to the US FDA
) for authorization to market the drug in the EU, and initially received a favourable response. However Sepracore withdrew its authorization application in 2009 after the EMA stated it would not be granting eszopiclone 'new active substance' status, as it was essentially pharmacologically and therapeutically too similar to zopiclone
. Since zopiclone's patent
has expired, this ruling would have allowed rival companies to also legally produce cheaper generic
versions of eszopiclone for the European market. ,, Sepracor has not resubmitted its authorization application and Lunesta/Lunivia is not available in Europe.
announced an exclusive development, marketing and commercialization agreement for ciclesonide
in the United States.
agreed with Sepracor that its antiepileptic BIA 2.093 would be produced in Sepracor's facilities and supervised by Bial.
and stock options.
due to pending news of a takeover bid by Japanese drugmaker Dainippon Sumitomo
. According to the Associated Press
, Dainippon plans to offer $2.6 billion for Sepracor, a nearly 28% premium over the stock's closing price on September 1. Aside from acquiring drugs like Lunesta and Xopenex, analysts say the acquisition will give Dainippon access to "Sepracor's sales force of roughly 1,200", which would open an avenue for the Japanese company to market its drugs in the United States. And given that Sepracor is set to face stiff generic competition from expiring patents (Xopenex in 2012 and Lunesta in 2014), it has failed to discover any viable drugs in nearly 10 years, and thus, having the shareholders accept the takeover bid seems a desperate attempt by management to exit a troubled organization with as much money as possible.
Sepracor shareholders are planning to block the deal and feel the current offer is well-below Sepracor's true market value and that Adrian Adams and others have breached their fiduciary responsibilities and agreed to terms designed to prevent anyone from making a superior offer. Sepracor directors failed to conduct an appropriate sales process and implemented precluding deal protections that will inhibit an alternate transaction and Sepracor directors “did not undertake to canvas the market prior to entering into the proposed merger and thus failed to inform themselves of the inherent fair value of the company. Furthermore, Sepracor's growth is expected to be crimped in the future because of competition from generic drug producers, as well as a meager pipeline due to the failure of R&D to identify any developmental compounds of value.
Pharmaceutical company
The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices...
founded in 1984 by Tim Barberich. It was originally located in Princeton
Princeton, New Jersey
Princeton is a community located in Mercer County, New Jersey, United States. It is best known as the location of Princeton University, which has been sited in the community since 1756...
, New Jersey and then re-located to Marlborough
Marlborough, Massachusetts
Marlborough is a city in Middlesex County, Massachusetts, United States. The population was 38,499 at the 2010 census. Marlborough became a prosperous industrial town in the 19th century and made the transition to high technology industry in the late 20th century after the construction of the...
, Massachusetts. On October 12, 2010, the company changed its name to Sunovion.
Company history
The company's initial focus was on the development of single isomers and active metabolites. This concept allowed Barberich and Doug Reedich to generate a patent estate that served the company well for many years. Therapeutically, Sepracor's products were focused on the treatment of central nervous system and respiratory disorders, under the direction of Gunnar Aberg, and John McCullough. The primary source of its revenue is the approximately $600 million annually from its Xopenex franchise of drugs, launched under the marketing leadership of John Simon, with the direct involvement of Medical Communications, under Dean Handley. It is available as a multi-dose inhaler (MDI) or nebulized (UDV) form. However, the insomnia drug Lunesta (eszopiclone), which was discovered by Tom Jerussi, approved by the US Food and Drug Administration (FDA) in December 2004 and launched in April 2005 under the marketing leadership of Tim Healy, is on pace to exceed $1 billion in annual sales. On February 13, 2006, Sepracor filed a new drug application for Brovana, patented by Gunnar Aberg and John Morley, (also launched under John Simon) to treat chronic obstructive pulmonary diseaseChronic obstructive pulmonary disease
Chronic obstructive pulmonary disease , also known as chronic obstructive lung disease , chronic obstructive airway disease , chronic airflow limitation and chronic obstructive respiratory disease , is the co-occurrence of chronic bronchitis and emphysema, a pair of commonly co-existing diseases...
. All of the launch drugs were manufactured under the leadership of Walter Piskorski.
Sepracor has broad exposure to generic competition, as both Xopenex inhalation solution and Lunesta brands will face expiring patents at nearly the same time in March 2012, leaving Omnaris, Alvesco, Brovana and Stedesa to fill in the revenue gaps. Sepracor suffered five recent setbacks. The first was the announcement that it had completed the analysis and validation of the preliminary results of a Phase II study evaluating the efficacy and safety of SEP-225289 for the treatment of Major Depressive Disorder where Sepracor determined that SEP-225289 did not meet the primary efficacy endpoint (a reduction in symptoms of depression following eight weeks of treatment). However, the positive control in the study (venlafaxine extended-release)did achieve separation from placebo that was statistically significant on the primary endpoint. Dr Corrigan, responsible for the study, could not explain why clinical study of his design has failed. Secondly, Sepracor has announced patent interference between Sepracor and Wyeth. The interference seeks to determine the priority of invention claims directed to racemic O-desmethylvenlafaxine (ODMV) succinate. Wyeth markets racemic ODMV succinate (the active racemic metabolites of venlafaxine) in the US under the brand name PRISTIQ for the treatment of major depressive disorder in adults. Thirdly, the FDA has notified Sepracor that two clinical studies on eszopiclone in children have been put on clinical hold due the FDAs concerns regarding non-clinical data that could be relevant to the administration of eszopiclone in children. Fourthly, the European Medicines Agency, the European Union’s version of the U.S. Food and Drug Administration, has approved Lunesta for sale, but didn’t grant the request by Sepracor to designate it as a new active substance. Because of the EMA decision, Sepracor and GSK are terminating completely their plan to market the drug in the EU. Lastly, Sepracor recently announced it has reached a licensing agreement and settled litigation with a division of Teva Pharmaceuticals USA to make a generic version of Sepracor’s inhaled asthma drug Xopenex.
Acadia Pharmaceuticals
On January 11, 2005, Sepracor partnered to advance a joint muscarinic-1 receptor agonist program for neuropathic pain.Schering-Plough
In December 1997 Schering-PloughSchering-Plough
Schering-Plough Corporation was a United States-based pharmaceutical company. It was founded in 1851 by Ernst Christian Friedrich Schering as Schering AG in Germany. In 1971, the Schering Corporation merged with Plough to form Schering-Plough. On November 4, 2009 Merck & Co...
obtained exclusive worldwide rights to Sepracor's patents relating to desloratadine
Desloratadine
Desloratadine is a drug used to treat allergies. It is marketed under several trade names such as NeoClarityn, Claramax, Clarinex, Larinex, Aerius, Dazit, Azomyr and Delot...
, discovered and patented by Drs. Gunnar Aberg, John McCullough, Emil Smith and Dean A. Handley. In January 2002, Schering-Plough launched the product as Clarinex for the treatment of seasonal allergic rhinitis (SAR).
Sanofi-Aventis
Sepracor earns royalties from patents relating to fexofenadineFexofenadine
Fexofenadine is an antihistamine drug used in the treatment of hayfever and similar allergy symptoms...
which is marketed as Allegra by Sanofi-Aventis
Sanofi-Aventis
Sanofi S.A. is a multinational pharmaceutical company headquartered in Paris, France, the world's fourth-largest by prescription sales. Sanofi engages in the research and development, manufacturing and marketing of pharmaceutical products for sale principally in the prescription market, but the...
. Fexofenadine is a nonsedating antihistamine for the treatment of allergic rhinitis. In December 1993, Sepracor licensed the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
patent for the use of fexofenadine to Hoechst Marion Roussel (HMRI). HMRI developed the drug and launched it in late 1996 as Allegra brand fexofenadine hydrochloride.
Sepracor Canada (Nova Scotia) Ltd.
Sepracor Canada (Nova Scotia) Ltd. is a 50000 square feet (4,645.2 m²) facility located in WindsorWindsor, Nova Scotia
Windsor is a town located in Hants County, Mainland Nova Scotia at the junction of the Avon and St. Croix Rivers. It is the largest community in western Hants County with a 2001 population of 3,779 and was at one time the shire town of the county. The region encompassing present day Windsor was...
, Nova Scotia, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
. Sepracor Canada is a pilot and commercial plant operation and the commercial manufacturing site since launch for levalbuterol HCl, the active ingredient in XOPENEX; eszopiclone, the active ingredient in LUNESTA; and arformoterol tartrate, the active ingredient in Brovana.
GlaxoSmithKline
On September 11, 2007, Sepracor signed a marketing deal with British pharmaceutical company GlaxoSmithKlineGlaxoSmithKline
GlaxoSmithKline plc is a global pharmaceutical, biologics, vaccines and consumer healthcare company headquartered in London, United Kingdom...
for the rights to sell Eszopiclone (under the name Lunivia rather than Lunesta) in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
. Sepracor was expected to receive approximately 155 million dollars if the deal went through. In 2008 Sepracor submitted an application to the EMA
European Medicines Agency
The European Medicines Agency is a European agency for the evaluation of medicinal products. From 1995 to 2004, the European Medicines Agency was known as European Agency for the Evaluation of Medicinal Products.Roughly parallel to the U.S...
(the European Union's equivalent to the US FDA
Food and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
) for authorization to market the drug in the EU, and initially received a favourable response. However Sepracore withdrew its authorization application in 2009 after the EMA stated it would not be granting eszopiclone 'new active substance' status, as it was essentially pharmacologically and therapeutically too similar to zopiclone
Zopiclone
Zopiclone is a non-benzodiazepine hypnotic agent used in the treatment of insomnia. In the United States, zopiclone is not commercially available, although its active stereoisomer, eszopiclone, is sold under the name Lunesta...
. Since zopiclone's patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
has expired, this ruling would have allowed rival companies to also legally produce cheaper generic
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
versions of eszopiclone for the European market. ,, Sepracor has not resubmitted its authorization application and Lunesta/Lunivia is not available in Europe.
Nycomed
On January 28, 2008, Sepracor and NycomedNycomed
Nycomed is a European pharmaceutical company. Nycomed is privately owned primarily by the two private equity investors Nordic Capital and CSFB Alternative Capital. Production is located in Norway, Denmark, Poland, Austria, Belgium, Germany, Estonia India, Mexico, Brazil and Argentina. Head office...
announced an exclusive development, marketing and commercialization agreement for ciclesonide
Ciclesonide
Ciclesonide is a glucocorticoid used to treat obstructive airway diseases. It is marketed under the brand name Alvesco for asthma and Omnaris/Omniair for hayfever in the US & Canada...
in the United States.
BIA 2-093
In 2008, BialBial
Bial is a pharmaceutical company headquartered in S. Mamede do Coronado, in Trofa, Porto district, Portugal. It was founded in 1924, being among the largest companies of its kind in Portugal....
agreed with Sepracor that its antiepileptic BIA 2.093 would be produced in Sepracor's facilities and supervised by Bial.
Omnaris and Alvesco
The company recently acquired Omnaris and Alvesco for $150M upfront and an addition $280M in potential milestones. Alvesco revenues for Q4'08 were -$0.3 million because returns from the "stocking" in Q3'08 exceeded the demand in Q4'08. The company disclosed a 2009 forecast of $25–$40M for Omnaris and $10–15M for Alvesco; yielding a combined total of $35M-$55M in year 2 of a launch. However, revenues continue to be dismal, prompting criticisms and concerns over the purchase price relative to minuscule income.2009 layoffs and stock incentive plan
In January 2009, Sepracor announced a series of layoffs due to the challenging economic environment for both the country and the pharmaceutical industry. However, current CEO, Mr. Adrian Adams, accepted a pay increase to put him at around $6.5 million annually, and was the seventh highest paid CEO in Massachusetts in 2007. Furthermore, the management has awarded top executives with a new 2009 stock incentive plan that will allow executives to receive a maximum of 500,000 shares per year before any performance objectives are reached. The exact number of shares for each executive will be determined by the board compensation committee, but typical grants for a company this size are 50,000 to 125,000 for each executive and could be a mixture of stockStock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
and stock options.
Takeover bid by Dainippon Sumitomo
On September 2, 2009, shares of Sepracor were halted on the NasdaqNASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
due to pending news of a takeover bid by Japanese drugmaker Dainippon Sumitomo
Dainippon Sumitomo Pharma
is a pharmaceutical company based in Japan.The original Dainippon Pharmaceuticals was established in 1885 by Nagayo Sensai, a graduate of Tekijuku – the first private medical school in Japan established by Ogata Kōan. It was set up as a wholly private company invested by a number of people in...
. According to the Associated Press
Associated Press
The Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...
, Dainippon plans to offer $2.6 billion for Sepracor, a nearly 28% premium over the stock's closing price on September 1. Aside from acquiring drugs like Lunesta and Xopenex, analysts say the acquisition will give Dainippon access to "Sepracor's sales force of roughly 1,200", which would open an avenue for the Japanese company to market its drugs in the United States. And given that Sepracor is set to face stiff generic competition from expiring patents (Xopenex in 2012 and Lunesta in 2014), it has failed to discover any viable drugs in nearly 10 years, and thus, having the shareholders accept the takeover bid seems a desperate attempt by management to exit a troubled organization with as much money as possible.
Sepracor shareholders are planning to block the deal and feel the current offer is well-below Sepracor's true market value and that Adrian Adams and others have breached their fiduciary responsibilities and agreed to terms designed to prevent anyone from making a superior offer. Sepracor directors failed to conduct an appropriate sales process and implemented precluding deal protections that will inhibit an alternate transaction and Sepracor directors “did not undertake to canvas the market prior to entering into the proposed merger and thus failed to inform themselves of the inherent fair value of the company. Furthermore, Sepracor's growth is expected to be crimped in the future because of competition from generic drug producers, as well as a meager pipeline due to the failure of R&D to identify any developmental compounds of value.