High-flying Lunesta losing altitude

Is the Lunesta moth about to have its wings clipped? In a filing with the SEC, Sepracor disclosed that two generics makers have asked the FDA for approval for their copycat versions of the insomnia remedy, showing their intent to challenge the company's patents. Other knockoff drugmakers are expected to home in on Lunesta, too, Sepracor told the SEC.

Lunesta is Sepracor's lead product, making up about half of the company's $864.7 million in product sales for the first nine months of 2008. And fourth-quarter Lunesta revenues were up to $162 million. Already expecting revenue declines in 2009--partly because of falling sales of its COPD drug Xopenex, partly because it expects Lunesta to suffer as generic Ambien CR comes onto the market --the company announced last month it would lay off some 530 people, plus cut loose 410 contract sales reps.

Of course, actual Lunesta copycats can't hit the market imminently. Wrangling over the patents will take time. In its SEC filing, Sepracor said it could possibly delay Cobalt and Teva's versions until June 2012 or until a court rules against Sepracor's patent protection (whichever comes first). But between the generic threats and the marketing cuts, that moth is likely to fly a lot lower this year.

- read the Boston Business Journal story