Sepracor Accepts $2.6 Billion Dainippon Bid

123jump.com Staff
03 Sep, 2009
New York City

Sepracor agrees to a merger offer from Japan based Dainippon Sumitomo Pharma that values the company at $2.6 billion. DPS will benefit from the sales force of 1,200 at Sepracor and plans to sell its schizophrenia and epilepsy and other nasal aerosols.

[R]9:30 AM New York – Sepracor agrees to a merger offer from Japan based Dainippon Sumitomo Pharma that values the company at $2.6 billion. DPS will benefit from the sales force of 1,200 at Sepracor and plans to sell its schizophrenia and epilepsy and other nasal aerosols.[/R]

Dainippon Sumitomo Pharma Company agreed to acquire Sepracor Inc for $2.6 billion in all cash deal. Dainippon has offered $23 a share and plans to raise $200 million in bank loans and fund the rest through its reserves.

Stronger yen has helped Japanese companies to acquire American rivals at a cheaper price. Yen has jumped 26% in the last two years.

The offer price represents a 48.0% premium to Sepracor’s average stock price over the last six month period ending on September 1, and a 27.6% premium over the closing price of Sepracor’s common stock on September 1, 2009.

Sepracor pharmaceutical product portfolio includes treatments for respiratory disorders and central nervous system.

Sepracor’s currently marketed products in the U.S. include LUNESTA for the treatment of insomnia in adults, XOPENEX inhalation solution for the treatment of bronchospasm and for the treatment of bronchoconstriction in patients with chronic obstructive pulmonary disease, Nasal spray for the treatment of allergic rhinitis.

Sepracor has a sales force of 1,200 and sells drugs for asthma, insomnia and allergic rhinitis. Dainippon plans to sell its schizophrenia treatment Lurasidone in the U.S. after the approval in 2010.

Sepracor also markets several additional products in Canada that are focused in the cardiovascular, pain and infectious disease therapeutic areas.

After the merger the company will become wholly owned subsidiary of Dainippon Sumitomo Pharma America and will retain its name and operations in Marlborough, Massachusetts and Canada.

Sepracor sales in 2008 were $1.3 billion and earnings per share of $4.47, though the company has struggled with earnings between 1996 and 2004. The company has been profitable since 2005.

Sepracor ((SEPR)) has traded as low as $10.53 in late 2008 and as high as $65.70 in early 2006.