Adrian Adams, who was just promoted to ceo at Sepracor, may be having trouble breathing this afternoon. Medicare plans to cut reimbursement for Xopenex, a big-selling asthma drug that accounted for half of last year’s sales. The unexpected move sent Sepracor shares down 15 percent so far today.

The Centers for Medicare & Medicaid Services plans to assign the same temporary reimbursement codes to all forms of albuterol, including Xopenex, according to a posting on the agency’s Web site. Xopenex is an altered form of the generic drug albuterol.

“It was expected that a ruling was coming,” Jon LeCroy, an analyst at Natexis Bleichroder, tells Reuters, “but I didn’t expect them to cut it to the price of a generic.” The agency didn’t specify the size of the price cut, and only placed it in the same code as albuteroal, but LeCroy expectes the drop to be up to 80 percent, and affect about 15 percent of Xopenex sales. Last year, those sales approached $600 million.

“This puts our Xopenex nebulizer revenue projection for 2007 at risk,” says Michael Tong, an analyst at Wachovia, who estimates Medicare accounts for 25 percent of Xopenex sales. “Removing sales of Xopenex nebulizer into Medicare would reduce revenue by roughly $80 million in the second half of 2007, which translates to $0.61 downside to earnings per share.”

Souce: Reuters[tags]Sepracor, Xopenex[/tags]