The cost of converting subordinated notes into common stock accelerated the third-quarter loss of



, the Marlborough, Mass.-based drug company said Tuesday.

Although the quarterly financial performance was worse than analysts had predicted, Sepracor's stock gained $1.18, or 2.8%, to $43.63.

The company lost $130.4 million, or $1.40 a share, on revenue of $80.1 million for the three months ended Sept. 30. The consensus of analysts polled by Thomson First Call projected a loss of $91.2 million, or $1.07 a share, on revenue of $79.7 million.

For the same period last year, Sepracor lost $38.5 million, or 45 cents s share, on sales of $70.8 million.

The latest results were affected by a charge of $69.8 million, or 75 cents a share, related to the conversion of notes into common shares. Between Aug. 30 and Sept. 8, Sepracor negotiated agreements with holders of certain convertible senior subordinated notes to exchange $529.2 million in notes for 17.4 million shares of common stock plus $69.8 million in cash.

In a separate transaction, the company issued $500 million in convertible senior subordinated notes and repurchased $99.9 million of its common stock.

Sepracor said its third-quarter was paced by the asthma drug Xopenex, which accounted for $60.1 million of the $80.1 million in corporate revenue.

The company added that it expected to hear by Dec. 15 from the Food and Drug Administration on its application for the insomnia drug Estorra. The FDA granted conditional approval on Feb. 27, subject to Sepracor meeting certain requirements. The company said the FDA "has not requested additional clinical or preclinical trials for approval."