Focused on the Next Generation
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SEPRACOR focused on the next generation 1999 Annual Report Sepracor Sepracor is a leading specialty pharmaceutical company focused on developing safer, purer and more effective drugs, which are improved versions of widely-prescribed pharmaceutical compounds. These focused on the next generation improved chemical entities, Sepracor ICE™ Pharmaceuticals, are proprietary, single-isomer or active-metabolite versions that may offer therapeutic advantages over existing drugs. The Company selects for development compounds with the potential to offer improvements over existing of icetm pharmaceuticals therapies with respect to efficacy, side effect profile, or both. Sepracor’s drug development program has yielded an extensive portfolio of ICE Pharmaceutical candidates that are concentrated in three major therapeutic categories: allergy and asthma, urological and gastroenterological disorders, and central nervous system disorders. Earliest Potential Compound Parent Drug Preclinical Phase I Phase II Phase III NDA Filed Launch Launched Levalbuterol (XOPENEX™) VENTOLIN®/ PROVENTIL® of patients Launched Fexofenadine (ALLEGRA®)* SELDANE® 2000 Desloratadine CLARITIN® 2001 Norastemizole HISMANAL® 2001 Levocetirizine ZYRTEC® Europe 2002 (R,R)-formoterol FORADIL®/ ® Respiratory Care–Allergy/Asthma ATOCK 2002 (R)-fluoxetine PROZAC® (depression) 2002 (+)-zopiclone IMOVANE® of sepracor 2003 (+)-desmethylzopiclone, (+)-DMZ IMOVANE® Many of Sepracor’s ICE Pharmaceutical candidates are (anxiety) being developed at lower cost and in less time than new chemical entities (NCEs). 2003 (S)-fluoxetine PROZAC® (migraine) Central Nervous System In its ICE Pharmaceutical development program, Sepracor identifies existing drugs that 2004 (+)-didesmethylsibutramine, (+)-DDMS MERIDIA® (CNS indications) potentially, in single-isomer or active-metabolite forms, provide significant therapeutic 2002 (+)-norcisapride PROPULSID® advances over existing therapies. ICE Pharmaceuticals are designed to offer benefits such as 2003 (S)-oxybutynin DITROPAN® 2003 (S)-doxazosin CARDURA® reduced side effects, improved therapeutic efficacy, improved dosage, or the opportunity for ® 2004 (–)-didesmethylsibutramine, (–)-DDMS MERIDIA new indications. Worldwide 1999 sales for the parent drugs of ICE Pharmaceuticals under (urology indications) 2005 (–)-pantoprazole PANTOZOL™ development by Sepracor and its partners totaled almost $20 billion. Urology/Gastroenterology 2007 (S)-lansoprazole PREVACID® *Fexofenadine product developed and marketed by Hoechst Marion Roussel, Inc. (“HMRI”) as ALLEGRA® brand fexofenadine hydrochloride. Sepracor has licensed or assigned its related patents worldwide to HMRI. 1 To Our Shareholders: Nineteen Hundred and Ninety- Sepracor and Abbott’s Ross Products Division heartburn due to gastroesophageal reflux disease. Sepracor Marketed Products ™ Nine was a momentous year for Co-Promote XOPENEX (+)-Norcisapride is currently in Phase II clinical trials. Ten Potential Launches Over Four Years Sepracor. With the launch of Sepracor will receive royalties on (+)-norcisapride sales Rep Details Percent of Physicians Covered Earliest Potential Year of Launch XOPENEX™ (levalbuterol HCl) upon launch in countries where patents have been issued. 188,000 Pediatricians 100% ’01 ’02 ’03 ’04 inhalation solution sold through Ross Norastemizole Sepracor’s specialty sales force, 165,000 Primary Care 49% • Schering-Plough has licensed desloratadine, an active- (+)-zopiclone metabolite form of loratadine marketed as CLARITIN®, (R,R)-formoterol we began the transition to a Sepracor 45,000 Pulmonologists 97% (S)-doxazosin the world’s leading nonsedating antihistamine. In (S)-oxybutynin fully-integrated pharmaceutical 16,000 Allergists 86% October 1999, Schering‘s New Drug Application (NDA) (+)-DMZ (Anxiety) company. The success of (+)-DDMS (ADHD) ™ Total = 414,000 Details for desloratadine was filed with the U.S. Food and Drug (+)-DDMS (Depression) XOPENEX demonstrates our (—)-DDMS (Stress Incontinence) capability as an organization to Administration (FDA) and it is currently under review. (—)-DDMS (Erectile Dysfunction) co-promotion approach to sales and marketing makes it execute in the areas of preclinical Sepracor will receive royalties on sales upon launch of Respiratory CNS Urology possible for us to achieve the required detailing levels need- and clinical development, desloratadine. ed to successfully market and sell pharmaceutical products. process development, manufacturing, regulatory, as well as • Sepracor has licensed to UCB Farchim SA all of Sepracor’s Drug Discovery at Sepracor direct marketing and sale of a proprietary drug. As additional ICE Pharmaceuticals reach the market, issued patents and pending patent applications covering We believe that our near-term growth will come from Sepracor hopes to: (1) expand the focus of its primary care Direct Sales and Marketing of ICE™ Pharmaceuticals levocetirizine in Europe and other countries, except the commercialization of the ICE Pharmaceuticals currently sales organization; (2) add additional sales representatives; ® Last May, Sepracor launched its first directly-marketed U.S. and Japan. Levocetirizine is an isomer of ZYRTEC , under development. However, in the future, Sepracor and (3) attract new co-promotion partners. drug, XOPENEX™ (levalbuterol HCl) inhalation solution, Europe’s leading antihistamine. UCB intends to file a will need new drug opportunities to complement its ICE in two dosage strengths for nebulizer use. XOPENEX™ is The earliest potential product launch dates for Sepracor ICE Marketing Authorization Application (MAA), the European Pharmaceutical portfolio. The Company has been broaden- currently indicated for the treatment or prevention of Pharmaceutical direct sale candidates are as follows: 2001 equivalent of a New Drug Application (NDA), in the first ing its focus to include discovery and development of new bronchospasm in patients 12 years of age and older with for norastemizole; 2002 for (+)-zopiclone and (R,R)-for- half of 2000. UCB will pay Sepracor royalties upon first chemical entities. The focus of this discovery effort is to reversible obstructive airway disease, such as asthma. moterol; 2003 for (S)-doxazosin, (+)-desmethylzopiclone, product sale. identify new drug candidates directed toward serving unmet ™ medical needs. The Company is pursuing compounds in XOPENEX is a proprietary, single-isomer version of the and (S)-oxybutynin; and 2004 for (+)-didesmethyl- • ALLEGRA® brand fexofenadine hydrochloride is Hoechst the area of central nervous system disorders, including best-selling bronchodilator, racemic albuterol. sibutramine for depression, (+)-didesmethylsibutramine Marion Roussel’s nonsedating antihistamine ALLEGRA®. for attention deficit hyperactivity disorder (ADHD), behavioral disorders and pain management. XOPENEX™ is commercialized through a co-promotion Sepracor and Hoechst Marion Roussel (now Aventis) have (-)-didesmethylsibutramine for erectile dysfunction, and Continued Financial Strength agreement with the Ross Products Division of Abbott settled their patent interference and Sepracor is currently (-)-didesmethylsibutramine for urinary incontinence. Laboratories. Sepracor’s 65-person respiratory sales receiving royalties on sales in Europe of the fexofenadine For the year ended December 31, 1999, the Company Sepracor’s direct sales and marketing organization has the force calls on pulmonologists, allergists and primary care product. Sepracor will receive royalties on sales in the U.S. had $336 million in cash and marketable securities. In the potential to launch ten ICE Pharmaceuticals over the next physicians in U.S. hospitals and clinics. Ross adds over beginning mid-February 2001. first quarter of 2000, the Company issued $460 million in four years. 300 product specialists providing coverage to pediatric 5 percent Convertible Subordinated Debentures due in physicians in the U.S. The Sepracor sales force is also Sepracor Out-licensing Agreements 2007. Sepracor’s consolidated cash position, as of the first complemented in the field by a dedicated contract sales The Company believes that certain compounds are more Sepracor Primary Care Sales Force Could Be quarter of 2000, has never been stronger. Supported By Co-Promotion Specialty Sales Forces force of 155 territory representatives from Innovex, a appropriate for out-licensing arrangements. Sepracor’s We believe that we have a winning business strategy based division of Quintiles Transnational Corporation. existing agreements include the following: 1500 upon a proven innovative approach to drug development Women’s and commercialization. I would like to congratulate Today, over 500 sales representatives are promoting • Eli Lilly and Company plans to develop and globally Health/Urology ™ Sepracor’s shareholders and employees on beginning the XOPENEX to physicians in offices, clinics and hospitals commercialize (R)-fluoxetine, a single-isomer form of 1200 in the U.S. At the end of the first quarter 2000, we are the active ingredient in PROZAC®, subject to approval of transition to a fully-integrated pharmaceutical company. Psychiatrists approaching a 10 percent market share of new prescriptions the Federal Trade Commission. (R)-Fluoxetine is currently In the coming year, I look forward to reporting on 900 Sepracor’s continuing progress. written for beta-agonist unit dose vials. in large-scale clinical trials. Sepracor will receive royalties ENT 700 on the (R)-fluoxetine product upon launch. Pediatricians Commercialization