Specialty pharmaceutical company

Sepracor

(SEPR)

plunged Thursday morning on news that partner

Eli Lilly

(LLY) - Get Report

ended a development deal for Sepracor's new form of the antidepressant Prozac.

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Sepracor dropped $41.81, or 35%, to $79. Lilly was off $4.38, or 5%, at $84.88.

Sepracor, whose business is based on helping drug companies fend off generic competitors when their drugs go off patent, ended the R-flouxetine program, citing results based on the review of clinical data. Development of a lower-dose version would delay marketing application for the drug for at least two years, the company said.

R-fluoxetine is a single-isomer form of Prozac that works faster and reduces side effects such as sexual dysfunction. Eli Lilly licensed the patent for this "Prozac Jr." from Sepracor in late 1998 as it hoped to make up for the loss in sales to generic competition when its Prozac franchise expires in late 2001.

Sepracor, based in Marlborough, Mass., saw its share price skyrocket in the past two years after licensing its version of Prozac to Lilly and Claritin to

Schering-Plough

(SGP)

.