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Sunovion Pharmaceuticals, Inc.
Industry Pharmaceuticals
Founded 1984
Headquarters Marlborough, Massachusetts, United States
Key people
Hiroshi Nomura, Vice Chair and Janet Surovcik, Sr. Corporate accounts
Products Lunesta, Xopenex, Brovana, Omnaris, Alvesco, Latuda, Zetonna, Aptiom
Revenue 1.3 Billion (2015)
Number of employees
3,400 (2014)[1]
Parent Dainippon Sumitomo Pharma

Sunovion Pharmaceuticals, Inc. (former NASDAQ: SEPR), known until October 12, 2010 as Sepracor, Inc. prior to its acquisition by Dainippon Sumitomo Pharma of Japan,[2] is a pharmaceutical company founded in 1984 by Timothy J. Barberich, Steve Matson, and Bob Bratzler. It was originally located in Princeton, New Jersey and then re-located to Marlborough, Massachusetts.[3]

Company history[edit]

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.[citation needed] 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 disease. All of the launch drugs were manufactured under the leadership of Walter Piskorski.[citation needed]

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.[citation needed] Sepracor suffered five recent[when?] 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.[4] 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.[5] 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.[6] 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.[7]

Acquisition by Dainippon Sumitomo[edit]

On September 2, 2009, shares of Sepracor were halted on the Nasdaq due to pending news of a takeover bid by Japanese drugmaker Dainippon Sumitomo. According to the Associated Press, Dainippon planned to offer $2.6 billion for Sepracor, a nearly 28% premium over the stock's closing price on September 1.[8] Aside from acquiring such drugs as Lunesta and Xopenex, analysts said the acquisition would 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.[9] Sepracor was set to face stiff generic competition from its expiring patents (Xopenex in 2012 and Lunesta in 2014), and had failed to discover any viable drugs in nearly 10 years.[10][11]

Sepracor shareholders planned to block the deal, arguing the initial offer was below Sepracor's true market value and that the management team at Sepracor had breached their fiduciary responsibilities and agreed to terms designed to prevent anyone from making a superior offer.[12][13] They claimed Sepracor directors had failed to conduct an appropriate sales process and implemented precluding deal protections that inhibit an alternate transaction and further that 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."[14]

Despite the opposition, a formal announcement of the acquisition was made on October 12, 2010, which stated that Sunovion would be an indirect, wholly owned subsidiary of Dainippon Sumitomo Pharma Co. Ltd.[2]

Beneficiaries, partners, and subsidiaries[edit]

Acadia Pharmaceuticals[edit]

On January 11, 2005, Sepracor partnered to advance a joint muscarinic-1 receptor agonist program for neuropathic pain.


In December 1997 Schering-Plough 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).


Sepracor earns royalties from patents relating to fexofenadine which is marketed as Allegra by Sanofi. 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.

Sepracor Canada (Nova Scotia) Ltd.[edit]

Sepracor Canada (Nova Scotia) Ltd. was a 50,000-square-foot (4,600 m2) facility located in Windsor, Nova Scotia, Canada since 1994. Sepracor Canada was 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. In December 2012, Sunovion announced it would be closing the plant in mid-2013 and laying off all employees, with operations being outsourced to other companies.[15] The plant officially closed on July 1, 2013 with all manufacturing being contracted out to a third-world territory in the name of cost savings and minimal quality oversight.


On September 11, 2007, Sepracor signed a marketing deal with British pharmaceutical company GlaxoSmithKline for the rights to sell Eszopiclone (under the name Lunivia rather than Lunesta) in Europe.[16] Sepracor was expected to receive approximately 155 million dollars if the deal went through.[16] 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.[17] 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.[18] 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.[19] As of January 2011, Sepracor has not resubmitted its authorization application and Lunesta/Lunivia is not available in Europe.


On January 28, 2008, Sepracor and Nycomed announced an exclusive development, marketing and commercialization agreement for ciclesonide in the United States.[20]

BIA 2-093[edit]

In 2008, Bial agreed with Sepracor that its antiepileptic BIA 2.093 would be produced in Sepracor's facilities and supervised by Bial.[21]

Omnaris and Alvesco[edit]

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[edit]

In January 2009, Sepracor announced a series of layoffs due to the challenging economic environment for both the country and the pharmaceutical industry.[22] 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.[23] 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 stock and stock options.


External links[edit]