beat per-share earnings expectations but reported a decline in profit and revenue Tuesday, in addition to announcing plans to slash 300 jobs.
The Marlborough, Mass.-based drug company earned $42.9 million, or 37 cents a share, in the third quarter, compared to $64.4 million, or 56 cents a share, a year ago. It reported revenue of $283.9 million, a 1.9% decrease from $289.3 million in the year-ago quarter. Analysts surveyed by Thomson Financial had expected 26 cents a share on revenue of $289 million.
Revenue from insomnia treatment Lunesta increased 14% to $160.9 million from $141.6 million in the 2006 quarter. Sales of Xopenex, an inhaler for brochospasm, fell to $94.4 million from $125.4 million in 2006, due to a new reimbursement rate from the Centers for Medicare and Medicaid Services.
Launched in April, Brovana, a twice-daily maintenance treatment of bronchoconstruction, generated revenue of $2.4 million. During the second quarter, CMS announced its preliminary determination that Brovana should be awarded a unique reimbursement, or J Code (it's currently under miscellaneous J Code), for billing purposes under the Medicare Part B benefit. Sepracor expects the final decision in the fourth quarter.
Looking ahead, the company reaffirmed its previous revenue guidance for 2007 of $1.23 billion to $1.3 billion. Sepracor narrowed full-year earnings estimates to a range of $1.05 to $1.15 a share from $1 to $1.30, including an after-tax litigation charge of 28 cents and expected restructuring charges.
Sepracor also said it would cut its sales force by 300, resulting in a reduction in sales and marketing expenses of $90 million to $100 million in 2008, when it expects to earn $2.35 to $2.45 a share.
Shares climbed $2.63, or 11.4%, to $25.65 in recent trading.