Sepracor issues earning, settles patent dispute

It was a busy morning for Sepracor Inc. as the Marlborough drug maker announced earnings, disclosed plans to buy a Canadian firm, and added that it has settled a patent disput involving an asthma drug.

Sepracor, which is known for such products as the insomnia drug Lunests, said today that its first-quarter profit fell 35 percent on buyout charges, but adjusted earnings topped Wall Street expectations.

The company earned $12.2 million, compared with profit of $18.8 million a year ago.

Revenue fell 2 percent to $320.8 million from $327.7 million.

In addition, Sepracor said today that it will buy Oryx Pharmaceuticals Inc., a Canadian marketer of branded prescription drugs to doctors and hospitals, in a move to expand into the Canadian market.

Sepracor said the company's portfolio includes 14 products, such as cholesterol drug Niaspan and skin infection treatment Cubicin, and is projected to record 2008 revenue of about $20 million Canadian dollars ($19.7 million).

Oryx shareholders will receive $50 million and potential payments of up to $20 million upon reaching various regulatory milestones. The deal is expected to close June 1.

"Given the growth in our research and development pipeline and the planned submissions of products such as Lunesta, Brovana and eslicarbazepine for marketing approval in Canada, this acquisition should enable us to fully leverage Sepracor's current and future product opportunities in this market in addition to the Oryx portfolio," said Adrian Adams, Sepracor president and chief executive.

Separately, Sepracor said today that it settled a patent dispute with Arrow Group's Breath Ltd. unit, involving Sepracor's Xopenex inhalation treatment for asthma.

The agreement allows Breath to launch generic versions of certain Xopenex dosages under an exclusive license beginning on Aug. 20, 2012. Upon launch, Breath will pay Sepracor a double-digit royalty on gross profits generated from the sales of these generic versions.

Both Sepracor and Breath are filing to dismiss their litigation without prejudice in the District Court for the District of Massachusetts.

Sepracor also agreed to exclusively supply Breath with the Xopenex products for 180 days and on a non-exclusive basis thereafter. In addition to royalties, Breath will pay Sepracor for these supplies. Breath may launch a generic version earlier than 2012 if a third party launches a generic version or if the companies otherwise mutually agree.

Sepracor said disputes with Dey LP and Barr Laboratories Inc. related to generic Xopenex inhalers remain pending.

In morning trading on the Nasdaq Stock Exchange, Sepracor shares were up $2.40, or 11 percent, to $23.95. (AP)