Sepracor Inc. Reports First Quarter 2008 Results, Certain Strategic Initiatives and Settlement of XOPENEX® Patent Litigation with Breath Limited

Business Wire, May 1, 2008

Financial Highlights*

* First quarter 2008 revenues were $320.8 million vs. $327.7 million for the same quarter in 2007

* Reported earnings per share (EPS) for the first quarter 2008 were $0.11 per diluted share vs. $0.16 per diluted share for the first quarter 2007

* Excluding special items and recurring non-GAAP adjustment, non-GAAP EPS for the first quarter 2008 was $0.53 per diluted share vs. $0.44 per diluted share for the same quarter in 2007

* Cash and short- and long-term investments were $833.6 million as of March 31, 2008

Other Recent Operational Highlights

* OMNARIS([TM]) brand ciclesonide Nasal Spray launched on April 17, 2008

* Settlement of XOPENEX([R]) patent litigation with Breath Limited

* Strategic acquisition of Oryx for commercial expansion into Canadian market

* In-licensing of XOPENEX([R])/ipratropium combination and further enhancement of ciclesonide and BROVANA([R]) franchises through collaborations with Arrow

* See below under the heading "Use of non-GAAP Financial Measures" for a discussion of Sepracor's use of non-GAAP financial measures. Attached is a reconciliation of GAAP (U.S. generally accepted accounting principles) to non-GAAP calculations.

MARLBOROUGH, Mass. -- Sepracor Inc. (Nasdaq: SEPR) today announced its consolidated financial results for the first quarter 2008.

For the three months ended March 31, 2008, total revenues were approximately $320.8 million compared to revenues of $327.7 million during the same quarter in 2007. Excluding a $39.8 million, or $0.34 per diluted share, after-tax in-process research and development charge made related to the Nycomed distribution agreement and the associated amortization of related intangible assets, as well as a $9.5 million, or $0.08 per diluted share, after-tax milestone payment due to Bial, non-GAAP net income for the quarter was $61.5 million, or $0.53 per diluted share, in the first quarter 2008. These results compare with non-GAAP net income of $51.7 million, or $0.44 per diluted share, in the first quarter of 2007, excluding an after-tax charge of $32.9 million, or $0.28 per diluted share, that related to the settlement of two class action lawsuits related to tecastemizole. Net income as reported under GAAP for the first quarter 2008 was approximately $12.2 million, or $0.11 per diluted share, compared to net income of $18.8 million, or $0.16 per diluted share, for the first quarter of 2007.

As of March 31, 2008, Sepracor had approximately $833.6 million in cash and short- and long-term investments.

"Over the last several months, we believe significant progress has been made in enhancing our research and development pipeline, and we are very pleased to have successfully in-licensed two new products from Nycomed, OMNARIS Nasal Spray and ALVESCO([R]) Inhalation Aerosol, and four additional product candidates to add to our growing pipeline of products, one of which - Bial's eslicarbazepine acetate - represents another potential near-term launch opportunity," said Adrian Adams, President and Chief Executive Officer of Sepracor. "We expect 2008 to be an exciting year for the company, and we believe we are well-positioned for a period of potential product launches and continued revenue and earnings momentum opportunities."

Sepracor reiterates its 2008 full-year total revenue guidance of $1,350-$1,450 million (midpoint of revenue guidance is an increase of 14.3% over 2007). GAAP fully diluted EPS guidance for 2008 is $1.05-$1.45, which includes the impact of an after-tax in-process research and development charge of $37.6 million and the associated full-year after-tax amortization of the intangible assets of $8.6 million related to the Nycomed agreement.

LUNESTA([R]) brand eszopiclone, for the treatment of insomnia, generated revenues of $135.6 million in the first quarter of 2008 compared to $147.4 million for the same quarter in 2007.

XOPENEX brand levalbuterol HCl Inhalation Solution, which is a short-acting beta-agonist indicated for the treatment or prevention of bronchospasm in patients with asthma and chronic obstructive pulmonary disease (COPD), accounted for $140 million of revenues for the first quarter 2008, compared to $149.6 million for the same quarter in 2007.

XOPENEX HFA([R]) brand levalbuterol tartrate Inhalation Aerosol, a hydrofluoroalkane (HFA) metered-dose inhaler (MDI) formulation of levalbuterol, accounted for $20.0 million of revenues during the first quarter 2008 compared to $20.5 million for the same period in 2007.

BROVANA brand arformoterol tartrate Inhalation Solution, a long-acting, twice-daily maintenance treatment of bronchoconstriction in patients with COPD, was commercially introduced in April 2007. For the first quarter of 2008, BROVANA revenues were $9.9 million. A significant portion of patients with COPD are Medicare beneficiaries, and the majority of future BROVANA revenues are expected to come from non-retail channels such as home health care. During the fourth quarter of 2007, CMS established a permanent, product-specific billing code, or J code, for BROVANA under the Medicare Part B benefit. The permanent J code became effective on January 1, 2008.