Watch CBSN Live

Sepracor Asthma Drug OK'd

Shares of Sepracor Inc. advanced Friday afternoon after the company said the U.S. Food and Drug Administration gave its Xopenex asthma drug market approval.

Sepracor (SEPR) develops and markets improved forms of existing pharmaceuticals. Their products can offer reduced side effects, new uses and improved dosage forms over traditional compounds.

"The approval is important from a psychological standpoint, since it shows the company is capable of (the full process of ) drug development to final sales," said Erick Lucera, an analyst at Independence Investment Associates, which owns about 300,000 shares of Sepracor stock.

Sepracor shares rose 3 to 121 1/4 in trading Friday.

Xopenex is to be used in an electric air compressor, called a nebulizer, which has a mouthpiece through which a patient breathes vaporized asthma medication.

Marlborough, Mass-based Sepracor is setting its marketing sights on children and elderly patients with severe asthma, as well as people who have difficulty using other drug-delivery systems.

The approval marks a milestone for the company as it moves ahead in its strategy to become a fully integrated pharmaceutical company, David Southwell, Sepracor's chief financial officer, told

Sepracor will continue to benefit from licensing improved products back to their innovators and to major pharmaceuticals companies, and from its own sales income, which it expects to generate from nine drugs in the next five years, Southwell said.

Several characteristics of the drug should allow Sepracor to command a premium price for Xopenex, Southwell said.

"There are three key attributes," he said.

First, Xopenex is both for treatment and prevention of asthma. Existing drugs are used for treatment only. Second, it has fewer side effects, such as muscular tremor and hyperactivity. Finally, Xopenex lasts for 8 hours, compared to 6 hours for existing medications, which means children (and others) can be asthma-free overnight, Southwell said.

Sepracor expects Xopenex to sell for about $1.75 a unit, comparable to brand-name products such as Glaxo-Wellcome's (GLX) Ventolin and Schering-Plough's (SGP) Proventil. The price will be a premium to that of generic versions, which sell for about $1.21 each.

Sepracor expects to begin selling the product, estimated to generate sales of up to $30 million this year, before April 30, Southwell said.

According to the American Lung Association, the number of deaths attributed to asthma has increased 117 percent since 1979.

More than 14 million Americans suffer from asthma, the sixth-ranking chronic condition in America, the Lung Association says.

Written By Stephanie O'Brien, CBS MarketWatch

View CBS News In