Sepracor (SEPR) Sinks After Another Pipeline Drug Fails
Sepracor, Inc. (Nasdaq: SEPR) is trading down 16% following news after the close that SEP-225289 did meet the primary efficacy endpoint and separately the company announced that the FDA put two Lunesta pediatric studies on hold.
A few firms have commented on SEPR following the news:
Deutsche Bank: Downgrades from Buy to Hold - "While the announcement of disappointing clinical data for ‘289 is not impactful to near-term earnings, the risk of Sepracor facing a substantial earnings “cliff” in the 2012-2014 timeframe has increased. Moreover, with the shares having increased 63% YTD (vs +2% for the NBI – NASDAQ Biotech index), the positive impact from the company’s restructured operations has largely been priced in – particularly with Rxs still mixed and only Stedesa remaining as a significant pipeline product."
Piper Jaffray: Maintains Underweight, $11 tgt - "This is the second mid-stage clinical failure of a SEPR pipeline product this year (the first being anxiety agent SEP-441)... We continue to have significant doubts about the quality of the pipeline, making it difficult for us to envision SEPR being able to avoid a significant decline in earnings as a result of the erosion of Xopenex UDV (2012) and Lunesta (2014) due to generics. As such, we would continue to stay away from the shares."
Goldman Sachs: Maintains Sell - "Given the disappointing data, we believe it is highly unlikely that SEP-225289 moves forward... for Lunesta, while this does not impact the use of the drug in adults, it does make the likelihood of a pediatric extension for the patent questionable, which is a clear negative.
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