SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                 --------------

                                    FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

X  Quarterly report pursuant to Section 13 or 15(d) of the Securities 
   Exchange Act of 1934

For the Quarterly period ended: March 31, 1998

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange 
Act of 1934

For the transition period from                to
                               --------------    --------------

Commission File Number 0-19410
                       -------

                                  SEPRACOR INC.
             (Exact Name of Registrant as Specified in its Charter)


         Delaware                                       22-2536587
         --------                                       ----------
(State or Other Jurisdiction of           (I.R.S Employer Identification number)
Organization or Incorporation)


                111 Locke Drive, Marlborough, Massachusetts 01752
                -------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                               (508) 481-6700
                               ---------------
              (Registrant's Telephone Number, Including Area Code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   YES X    NO 

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

Common Stock, par value $.10 per share                        27,903,265
--------------------------------------                --------------------------
             Class                                    Outstanding at May 8, 1998


<PAGE>

                                  SEPRACOR INC.

                                      INDEX


Part I - Financial Information

Item 1.    Consolidated Condensed Financial Statements

            Consolidated Condensed Balance Sheets as of
            March 31, 1998 and December 31, 1997 (Unaudited)                  3

            Consolidated Statements of Operations for the Three Month 
            Periods Ended March 31, 1998 and 1997 (Unaudited)                 4

            Consolidated Statements of Cash Flows for the Three Month
            Periods Ended March 31, 1998 and 1997 (Unaudited)                 5

            Notes to Consolidated Interim Financial Statements                6


Item 2.     Management's Discussion and Analysis of Financial                10
            Condition and Results of Operations



Part II - Other Information                                                  19



Signatures                                                                   21


                                       2

<PAGE>

<TABLE>
<CAPTION>
                                                     SEPRACOR INC.
                                         CONSOLIDATED CONDENSED BALANCE SHEETS
                                                      (Unaudited)

 (in thousands)                                                                      March 31,            December 31,
                                                                                       1998                  1997
                                                                                     ----------           ----------
                               ASSETS

 <S>                                                                                 <C>                   <C>
 Current Assets:
                Cash and cash equivalents                                            $ 178,393             $ 82,579
                Marketable securities                                                   82,471                9,981
                Accounts receivable, net                                                 4,502                2,415
                Inventories                                                              3,088                2,722
                Other current assets                                                     2,430                1,543
                                                                                     ----------           ----------
                Total Current Assets                                                   270,884               99,240
 
 Property, plant and equipment, net                                                     15,309               15,126
 Deferred financing costs, net                                                           7,706                1,917
 Excess of investments over net assets acquired,net                                      5,190                5,288
 Investment in affiliates                                                                3,084                3,971
 Other assets                                                                            3,202                2,965
                                                                                     ----------           ----------
                Total Assets                                                         $ 305,375            $ 128,507
                                                                                     ==========           ==========
                               LIABILITIES AND STOCKHOLDERS' EQUITY
 Current Liabilities:
                Accounts payable                                                       $ 2,929              $ 4,018
                Accrued expenses                                                        23,981               17,670
                Notes payable and current portion
                of capital lease obligation and long-term debt                             918                  861
                Deferred revenue                                                           141                   21
                Convertible redeemable preferred stock                                       -                6,700
                                                                                     ----------           ----------
                Total Current Liabilities                                               27,969               29,270
 
 Long-term debt and capital lease obligation                                             3,174                3,388
 Convertible subordinated debentures                                                   270,355               80,880
                                                                                     ----------           ----------
                Total Liabilities                                                      301,498              113,538
                                                                                     ----------           ----------
 Minority interest                                                                       2,982                2,937
 Stockholders' Equity:
                Common stock                                                             2,798                2,785
                Additional paid-in capital                                             223,112              222,504
                Unearned compensation, net                                                 (94)                 (94)
                Accumulated deficit                                                   (224,747)            (213,028)
                Equity adjustments                                                        (174)                (135)
                                                                                     ----------           ----------
                Total Stockholders' Equity                                                 895               12,032
                                                                                     ----------           ----------
                Total Liabilities and Stockholders' Equity                           $ 305,375            $ 128,507
                                                                                     ==========           ==========


                                      The accompanying notes are an integral part
                                        of the consolidated financial statements

</TABLE>

                                                           3

<PAGE>

<TABLE>
<CAPTION>
                                                SEPRACOR INC.
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                       FOR THE THREE MONTH PERIODS ENDED
                                            MARCH 31,1998 and 1997
                                                 (Unaudited)


                                                                         Three month periods ended
                                                                                  March 31,
                                                                                  ---------
                                                                    (in thousands, except per share amounts)
                                                                             1998             1997
                                                                             ----             ----
<S>                                                                         <C>                <C>
Revenues:
License fees                                                              $   5,072        $      -
Product                                                                       1,890           3,388
Collaborative research and development                                        1,863               -
Royalties                                                                        54              51
                                                                         ----------       ---------
     Total Revenues                                                           8,879           3,439
Cost of revenues:
License fees                                                                    400               -
Cost of products                                                                964           1,932
Royalties                                                                        18               -
                                                                         ----------       ---------
     Total Cost of Revenues                                                   1,382           1,932

Gross Margin                                                                  7,497           1,507

Operating Expenses:
Research and development                                                     13,367          11,736
Sales and marketing                                                           2,441           1,060
Administration                                                                1,965           2,671
Restructuring recoveries                                                       (351)              -
Patent costs                                                                    464             312
                                                                         ----------       ---------
     Total Operating Expenses                                                17,886          15,779

(Loss) from operations                                                      (10,389)        (14,272)

Other income (expense):
Interest income                                                               2,812           1,365
Interest expense                                                             (3,100)         (1,489)
Other income (expense)                                                         (109)             75
Equity in loss of investees                                                    (887)           (686)
Gain on sale of ChiRex Inc.                                                       -          30,069
                                                                         ----------       ---------
     Total Other Income (Expense)                                            (1,284)         29,334

Net income (loss) before minority interests                                 (11,673)         15,062
Minority interest in subsidiary                                                 (45)            169
                                                                         ----------       ---------
Net income (loss)                                                           (11,718)         15,231
                                                                         ==========       =========
Dividends on preferred stock                                                   (150)           (150)
                                                                         ----------       ---------
Net income (loss) applicable to common shares                             $ (11,868)       $ 15,081
                                                                         ==========       =========
Basic net income (loss) per common share                                  $   (0.43)       $   0.56
                                                                         ----------       ---------
Diluted net income (loss) per common share                                $   (0.43)       $   0.50
                                                                         ----------       ---------
Shares used in computing basic and diluted net income 
(loss) per common share:
Basic                                                                        27,910          27,416
                                                                         ----------       ---------
Diluted                                                                      27,910          33,325
                                                                         ----------       ---------
</TABLE>


                                 The accompanying notes are an integral part
                                   of the consolidated financial statements


                                                       4


<PAGE>

<TABLE>
<CAPTION>
                                                 Sepracor Inc.
                                     Consolidated Statements of Cash Flows
                                                  (Unaudited)



(in thousands)                                                                      Three month periods ended
                                                                                             March 31

                                                                                     1998               1997
                                                                                  ----------          ---------
<S>                                                                               <C>                 <C>
 Cash flows from operating activities:
 Net Income (loss)                                                                $ (11,718)          $ 15,231
 Adjustments to reconcile net loss to net cash
 used in operating activities:
 Minority interests in subsidiaries                                                      45               (169)
 Gain on sale of equity investee                                                          -            (30,069)
 Depreciation and amortization                                                        1,000              1,014
 Provision for doubtful accounts                                                        (13)               (98)
 Equity in investee losses                                                              887                686
 Issuance of warrants                                                                    30
 Loss on disposal of property and equipment                                               1                  5
 Changes in operating assets and liabilities:
 Accounts receivable                                                                 (1,917)              (196)
 Inventories                                                                           (443)               207
 Other current assets                                                                (1,174)                45
 Accounts payable                                                                      (987)              (980)
 Accrued expenses                                                                     4,324              3,491
 Deferred revenue                                                                       122                (43)
                                                                                  ----------          ---------
 Net cash (used in) operating activities:                                            (9,843)           (10,876)
 Cash flows from investing activities:
 Purchases of marketable securities                                                 (82,490)                 -
 Sales of marketable securities                                                      10,000              5,360
 Additions to property and equipment                                                   (926)            (1,571)
 Proceeds from sale of equipment                                                          3                  -
 Net proceeds from sale of equity investee                                                -             30,625
 Other assets                                                                           (43)               (78)
                                                                                  ----------          ---------
 Net cash (used in) provided by investing activities:                               (73,456)            34,336

 Cash flows from financing activities:
 Proceeds from sale of convertible debentures                                       189,475                  -
 Deferred costs related to sale of convertible debentures, gross                     (5,976)                 -
 Repurchase of Series B Redeemable Exchangeable Preferred Stock                      (6,850)                 -
 Net proceeds from issuances of common stock                                            620                925
 Borrowings of long term debt                                                             -                  -
 Repayments of long term debt and capital lease                                        (124)              (132)
 (Repayments) borrowings under line of credit agreements                              2,000                233
                                                                                  ----------          ---------
 Net cash provided by financing activities                                          179,145              1,026
 
 Effect of exchange rates on cash and cash equivalents                                  (32)               (97)
                                                                                  ---------           --------
 Net increase (decrease) in cash and cash equivalents                                95,814             24,389
 Cash and cash equivalents at beginning of period                                    82,579             83,344
                                                                                  ---------           --------
 Cash and cash equivalents at end of period                                       $ 178,393           $107,733
                                                                                  =========           ========
</TABLE>


                                The accompanying notes are an integral part
                                 of the consolidated financial statements


                                                       5

<PAGE>


                                     ITEM 1.
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.  Basis of presentation:

The accompanying consolidated interim financial statements are unaudited and
have been prepared on a basis substantially consistent with the audited
financial statements. Certain information and footnote disclosures normally
included in the Company's annual financial statements have been condensed or
omitted. The year-end consolidated condensed balance sheet data was derived from
audited financial statements but does not include all disclosures required by
generally accepted accounting principles. The consolidated interim financial
statements, in the opinion of management, reflect all adjustments (including
normal recurring accruals) necessary for a fair presentation of the results for
the interim periods ended March 31, 1998 and 1997.

The results of operations for the interim periods are not necessarily indicative
of the results of operations to be expected for the fiscal year. These
consolidated interim financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 1997, which are
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.

2.  Inventories:

Inventories consist of the following:

                                    March 31,                   December 31,
                                      1998                          1997
                                      ----                          ----
Raw materials                      $   690                       $   600
Work in progress                       250                           129
Finished goods                       2,148                         1,993
                                   -------                       -------

                                   $ 3,088                       $ 2,722
                                   =======                       =======

3. Basic and diluted net (loss) per common share:

In the quarter ended December 31, 1997, the Company adopted Financial Accounting
Standards Board Statement of Financial Accounting Standard No. 128, "Earnings
Per Share", which modifies the way in which earnings per share ("EPS") is
calculated and disclosed. Basic EPS excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted EPS is based upon the
weighted average number of common shares outstanding during the period plus the
additional weighted average common equivalent shares during the period. Common
equivalent shares are not included in the per share calculations where the
effect of their inclusion would be antidilutive. Common equivalent shares result
from the assumed conversion of preferred stock and the assumed exercises of
outstanding stock options, the proceeds of which are then assumed to have been
used to repurchase outstanding stock options using the treasury




                                       6
<PAGE>

stock method. At March 31, 1998, had the result not been antidilutive, the
Company would have shown 38,712,000 shares as the diluted weighted average
number of shares outstanding. Included in the 1998 and 1997 basic and diluted
net loss applicable to common shares is $150,000 of dividends relating to Series
B Redeemable Exchangeable Preferred Stock. For the three months ended March 31,
1998, basic and diluted net (loss) per common share is computed based on the
weighted-average number of common shares outstanding during the period because
the effect of common stock equivalents would be anti-dilutive.

4. 6 1/4% Convertible Subordinated Debentures

On February 10, 1998, Sepracor issued $189,475,000 of 6 1/4% Convertible
Subordinated Debentures due 2005 (the "6 1/4% Debentures"). The 6 1/4%
Debentures are convertible into Sepracor Common Stock, at the option of the
holder, at a price of $47.369 per share. The 6 1/4% Debentures bear interest at
6 1/4% payable semi-annually, commencing on August 15, 1998. The 6 1/4%
Debentures are not redeemable by the Company prior to February 18, 2001. The
Company may be required to repurchase the 6 1/4% Debentures at the option of the
holders in certain circumstances. As part of the sale of the 6 1/4% Debentures,
Sepracor has incurred, to date, approximately $5,976,000 of offering costs,
which are being amortized over seven years, the term of the 6 1/4% Debentures.
The net proceeds to the Company after offering costs are $183,499,000. The
Company intends to use the proceeds from the sale of the 6 1/4% Debentures for
the establishment of the Company's respiratory sales force, marketing of certain
ICEs, ongoing preclinical and clinical trials, funding of other research and
development programs, and working capital and other general corporate purposes.

5. Series B Redeemable Exchangeable Preferred Stock:

In March 1995, Beckman acquired 312,500 shares of Sepracor's Series B Redeemable
Exchangeable Preferred Stock for $5,000,000. On March 26, 1998, Sepracor and
Beckman terminated their Stock Purchase Agreement under which Beckman acquired
312,500 shares of Sepracor Series B Redeemable Exchangeable Preferred Stock.
Sepracor paid Beckman the original purchase price of the stock plus accrued
dividends totalling $6,850,000. In addition, BioSepra and Beckman amended their
distribution agreement whereby BioSepra granted a non-exclusive right to
manufacture instruments to Beckman, removed its obligation to manufacture
instruments for Beckman, and sold the discontinued instrument product inventory
to Beckman for $250,000.



                                       7
<PAGE>

6. Comprehensive Income 

The Company has adopted Statement of Financial Accounting Standard No. 130
"Reporting Comprehensive Income" ("SFAS 130"), which requires that changes in
comprehensive income be shown in a financial statement that is displayed with
the same prominence as other financial statements. The Company's only
significant item of other comprehensive income relates to foreign currency
translation adjustments, and is presented separately on the balance sheet as
required. If presented on the statement of operations for the three months ended
March 31, 1998 and 1997, comprehensive income would be approximately $174,000
and $135,000, respectively less than reported net income (loss), due to foreign
currency translation adjustments.

7. Other

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131"). SFAS 131 specifies new
guidelines for determining a company's operating segments and related
requirements for disclosure. Sepracor is in the process of evaluating the impact
of the new standard on the presentation of the financial statements and the
disclosure therein. SFAS 131 is effective for fiscal years beginning after
December 31, 1997, but need not be applied to interim financial statements in
the initial year of application.

8. Litigation

In July 1997, the United States Patent and Trademark Office (the "PTO") informed
Sepracor that it had declared an interference between Sepracor's previously
issued method-of-use patent on fexofenadine to treat allergic rhinitis and
another similar patent application of Sepracor, and HMRI's method-of-use patent
application on the anti-histaminic effects of fexofenadine on hepatically
impaired patents. The primary objective of a patent interference, which can only
be declared by the PTO, is to determine the first to invent any overlapping
subject matter claimed by more than one party. In the course of an interference,
the parties typically present evidence relating to their inventive activities as
to the overlapping subject matter. The PTO then reviews the evidence to
determine which party has the earliest legally sufficient inventive date, and,
therefore, is entitled to a patent claiming the overlapping subject matter.

If Sepracor prevails in the interference, Sepracor will retain all of its claims
in its issued patent. If, however, Sepracor loses the interference, HMRI will be
issued a U.S. patent containing its claims involved in the interference and may
not be obligated to pay Sepracor milestone or royalty payments pursuant to the
terms of the license agreement whereby Sepracor licensed its U.S. patent rights
covering fexofenadine to HMRI in 1993.

HemaSure is a defendant in two lawsuits brought by Pall Corporation ("Pall"). In
complaints filed in February 1996 and November 1996, Pall alleged that
HemaSure's manufacture, use and/or sale of the LeukoNet product infringes upon
three patents held by Pall.

On October 14, 1996, in connection with the first action concerning U.S. Patent
No. 5,451,321(the "'321 patent"), HemaSure filed for summary judgment of
noninfringement. Pall filed a cross motion for summary judgment of infringement
at the same time.

In October 1997, the U.S. District Court of the Eastern District of New York
("the court") granted in part Pall's summary judgment motion relating to the
'321 patent. HemaSure has agreed to terminate manufacture, use, sale and offer
for sale of the filter, subject to the court's order. In April 1998, the court
granted to HemaSure its request to appeal the October 1997 decision.




                                       8
<PAGE>

With respect to the second action concerning U.S. Patent No. 4,952,572 (the
"'572 patent"), HemaSure has answered the complaint stating that it does not
infringe any claim of the asserted patents. Further, HemaSure has counterclaimed
for declaratory judgment of invalidity, noninfringement and unenforceability of
the '572 patent.

HemaSure believes, based on advice of its patent counsel, that a properly
informed court should conclude that the manufacture, use and/or sale by HemaSure
or its customers of the present LeukoNet product did not infringe any valid
enforceable claim of the two Pall patents. However, there can be no assurance
that HemaSure will prevail in the pending litigations, and an adverse outcome in
a patent infringement action would have a material adverse effect on HemaSure's
future business and operations.

9. Summarized income statement information:

The following is the summarized income statement information for HemaSure and
Versicor Inc. for the three month periods ended March 31, 1998 and 1997:


<TABLE>
<CAPTION>

                                             Three Months Ended
                                                 March 31
                                            1998          1997
                                            ----          ----
HemaSure                                      (in thousands)
-------
<S>                                      <C>           <C>    
Net sales                                $    25       $   551
Gross loss                                  (632)         (481)
Loss from continuing
  operations                              (3,467)       (2,779)
Net loss                                 $(3,429)      $(2,889)

Versicor
--------

Net sales                                $     -       $     -
Gross profit                                   -             -
Loss from continuing 
  operations                              (4,034)       (1,898)
Net loss                                 $(4,034)      $(1,898)

</TABLE>

The Company recognized 22% of Versicor's net loss as equity in loss of
subsidiary. The Company has recognized none of HemaSure's loss since its
investment in subsidiary is zero.


                                       9
<PAGE>

                                     ITEM 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Overview

The consolidated interim financial statements include the accounts of Sepracor
Inc ("Sepracor") and its majority and wholly-owned subsidiaries, including
BioSepra Inc. ("BioSepra"), Sepracor Canada Limited, and Versicor (from May 1995
to December 1997).


Effective December 10, 1997, Sepracor's ownership percentage of Versicor was
approximately 22%, thereby making Versicor an affiliate and reportable under the
equity method. Sepracor has recorded $887,000 as its share of Versicor losses
for the period ended March 31, 1998. At March 31, 1998, Sepracor had an
investment in Versicor of $3,084,000. At March 31, 1998, Sepracor's investment
in HemaSure was zero.

In December 1997, Sepracor signed a licensing agreement with Schering-Plough
Corporation ("Schering") giving Schering exclusive worldwide rights to
Sepracor's patents covering descarboethoxyloratadine ("DCL"), an active
metabolite of loratadine ("the Schering Agreement"). Under the terms of the
agreement, Sepracor has exclusively licensed its DCL rights to Schering, which
expects to develop and market the DCL product worldwide. Under the agreement
Schering would pay Sepracor an upfront license fee of $5,000,000 and royalties,
if any, on DCL sales beginning at first product launch. Any royalties paid to
Sepracor will escalate over time and upon the achievement of sales volume and
other milestones.

In January 1998, Sepracor and Schering were notified that no objection would be
raised under the Hart Scott Rodino Act with respect to the Schering Agreement.
Sepracor received the $5,000,000 upfront license fee (which will be offset
against potential future royalties) and recorded it as license revenue in
January 1998. Under the Schering Agreement, Sepracor made a sub-licensee payment
to a third party for $400,000, which is reflected under cost of revenue.

On February 4, 1998, Sepracor signed a collaboration and license agreement with
Janssen Pharmaceutica, N.V. ("Janssen"), a wholly-owned subsidiary of Johnson &
Johnson, relating to the development and marketing of norastemizole, a third
generation nonsedating antihistamine ("the Janssen Agreement"). Under the terms
of the Janssen Agreement, the companies will jointly fund the development of
norastemizole, and Janssen has an option to acquire certain rights regarding the
product in the U.S. and abroad. When exercised, Janssen and Sepracor will
equally share the costs and profits associated with the further development,
marketing and sales of norastemizole in the United States. Sepracor will also
retain the right to co-promote the product in the U.S. Alternatively, Sepracor
can elect to receive royalties, if any, on Janssen sales of norastemizole in the
U.S. in the event it decides not to co-promote the product. Outside of the U.S.,
Janssen has the right to develop and market norastemizole, and Sepracor will
earn royalties, if any, on product sales. In addition, Janssen has worldwide OTC
rights to norastemizole. In the first quarter of 1998, Sepracor recorded
collaborative research and development revenue of $1,753,000, which represented
Janssen's portion of 1997 expenses incurred under the agreement. Costs incurred
in 1998, under the Janssen Agreement, were not billed until April 1998 and are
not material to the interim financial statements.

Three months ended March 31, 1998 and 1997

License fees were $5,072,000 for the three months ended March 31, 1998. There
were no such revenues for the same period in 1997. The increase for the period
is primarily due to the $5,000,000 license payment from the Schering Agreement.

                                       10
<PAGE>


Product sales were $1,890,000 for the three months ended March 31, 1998 compared
to $3,388,000 for the same period in 1997. The decrease in revenue is attributed
to the discontinuation of the instrument product line and to the fluctuation in
the timing of large production scale media orders. BioSepra expects fluctuations
in the timing of large production scale orders to continue to occur in future
periods.

Collaborative research and development revenues were $1,863,000 for the three
months ended March 31, 1998, of which $1,753,000 relates to the Janssen
Agreement. There were no such revenues for the same period in 1997.

Cost of products sold, as a percentage of product sales, was 51% for the three
months ended March 31, 1998 compared to 57% for the same period in 1997. The
decrease in cost as a percentage of product sales is primarily due to the
discontinuation of the higher cost instrument product line in December 1997 and
to favorable product mix changes. BioSepra expects its cost of products will
continue to fluctuate as a result of changes in product mix.

Research and development expenses were $13,367,000 in the three months ended
March 31, 1998 compared to $11,736,000 in the same period last year. Research
and development spending was primarily focused on preclinical and clinical
trials in the Company's pharmaceutical program. The increase for the period is
primarily due to the costs associated with Sepracor's Phase III clinical trials
for Levalbuterol and Phase III trials for Norastemizole offset by the reduction
in expenses as Versicor is no longer being consolidated.

Sales and marketing expenses were $2,441,000 for the three months ended March
31, 1998 compared to $1,060,000 for the same period last year. The increase for
the period is due to costs related to infrastucture development for a specialty
sales force. Sepracor is currently planning to introduce Levalbuterol in late
1998.

General and administrative expenses were $1,965,000 for the three months ended
March 31, 1998 compared to $2,671,000 for the same period last year. The
decrease for the periods is due to personnel reductions and related costs at
BioSepra and the Company no longer consolidating Versicor.

Legal expenses related to patents were $464,000 for the three months ended March
31, 1998 compared to $312,000 for the same period last year. The increase for
the period is due to costs incurred related to patent interference preceedings
commencing in Q2 1997 as well as fees associated with the increased volume of
patent filings.



                                       11
<PAGE>

Equity in loss of investees was $887,000 for the three months ended March 31,
1998 compared to a loss of $686,000 in the same period last year. In the period
ended March 31, 1998, the equity in loss consists of the Company's portion of
Versicor's results. In the period ended March 31, 1997, the equity in loss
consists of the Company's portion of HemaSure and ChiRex (through March 31,
1997). The change in the period relates to no longer recognizing equity losses
related to HemaSure, to the sale of the companies ownership of ChiRex and to the
recognition of Versicor losses beginning in December 1997.

Interest income, interest expense and other income (expense) was ($397,000) in
the three months ended March 31, 1998 compared to ($49,000) in the same period
in 1997. The increase in expense for the period is primarily the result of
increased level of borrowings of BioSepra, and increased interest expense
related to the 6 1/4% Debentures.

Minority interest in subsidiary resulted in an increase to consolidated net loss
of $45,000 for the three months ended March 31, 1998 compared to an increase in
net income of $169,000 for the same period last year. The change in the period
is a result of BioSepra recording net income in the current period.

Liquidity and Capital Resources

Cash and cash equivalents plus marketable securities of Sepracor and its
subsidiaries, including BioSepra, totaled $260,864,000 at March 31, 1998,
compared to $92,560,000 at December 31, 1997. Cash and cash equivalents plus
marketable securities of Sepracor, excluding BioSepra, at March 31, 1998 were
$257,154,000.

The net cash used in operating activities for the three months ended March 31,
1998 was $9,848,000. The net cash used in operating activities includes a net
loss of $11,718,000 adjusted by non-cash charges of $1,905,000. The accounts
payable and accrued expense balances increased a total of $3,337,000 from the
December 31, 1997 balances, primarily due to increased research and development
accruals at Sepracor.

In 1994, Sepracor, BioSepra and HemaSure entered into an equipment leasing
arrangement that provides for a total of up to $2,000,000 of financing to
Sepracor and its subsidiaries for the purpose of financing capital equipment in
the United States. All outstanding amounts are collateralized by the assets so
financed and are guaranteed by Sepracor. At March 31, 1998, there was $701,000
outstanding under this credit facility relating to Sepracor, BioSepra and
HemaSure of which $168,000, $126,000 and $407,000 represented Sepracor's
BioSepra's and HemaSure's portion, respectively.

At March 31, 1998, Sepracor had guaranteed $561,000 of outstanding bank
borrowings of BioSepra S.A., BioSepra's wholly owned French subsidiary.




                                       12
<PAGE>

In 1994, Sepracor's wholly owned subsidiary, Sepracor Canada Limited, entered
into two credit agreements with two Canadian provincial and federal business
development agencies for approximately $2,960,000 in term debt, of which
$2,590,000 is at an annual interest rate of 9.25% and $370,000 is interest free.
As of March 31, 1998, Sepracor Canada Limited had received approximately
$2,960,000 of such term debt, of which $2,230,000 was outstanding.

In December 1997, Sepracor and BioSepra amended their revolving credit agreement
with a commercial bank that provides for borrowing of up to an aggregate of
$10,000,000 (the "Revolving Credit Agreement"). The Revolving Credit Agreement
was amended to remove Versicor as a party thereto. Under the amended revolving
credit agreement BioSepra could borrow up to $3,000,000. All borrowings are
collateralized by certain assets of Sepracor and BioSepra. The revolving credit
agreement contains covenants relating to minimum tangible capital base, minimum
cash or cash equivalents, minimum liquidity ratio and maximum leverage for
Sepracor and BioSepra. Sepracor is a guarantor of all outstanding borrowings. At
March 31, 1998, there was $2,000,000 outstanding under this agreement, relating
to BioSepra. The annual interest rate on such borrowings is at the lower of the
prime rate or LIBOR plus 175 basis points.

On December 30, 1997, Sepracor entered into a put agreement with a commercial
bank pursuant to which Sepracor agreed to purchase $2,000,000 of indebtedness of
Versicor, a former wholly owned subsidiary, in the event of a default by
Versicor under its loan agreement with the bank. In the event that the put right
is exercised by the bank, the bank will assign its security interest in the
fixed assets of Versicor to Sepracor. As of March 31, 1998, Versicor is in
compliance with all requirements under this agreement.

On February 10, 1998, Sepracor issued $189,475,000 of 6 1/4% Convertible
Subordinated Debentures due 2005 (the "6 1/4% Debentures"). The 6 1/4%
Debentures are convertible into Sepracor Common Stock, at the option of the
holder, at a price of $47.369 per share. The 6 1/4% Debentures bear interest at
6 1/4% payable semi-annually, commencing on August 15, 1998. The 6 1/4%
Debentures are not redeemable by the Company prior to February 18, 2001. The
Company may be required to repurchase the 6 1/4% Debentures at the option of the
holders in certain circumstances. As part of the sale of the 6 1/4% Debentures,
Sepracor has incurred, to date, approximately $5,976,000 of offering costs,
which are being amortized over seven years, the term of the 6 1/4% Debentures.
The net proceeds to the Company after offering costs are $183,499,000. The
Company intends to use the proceeds from the sale of the 6 1/4% Debentures for
the establishment of the Company's respiratory sales force, marketing of certain
ICEs, ongoing preclinical and clinical trials, funding of other research and
development programs, and working capital and other general corporate purposes.

In March 1995, Beckman acquired 312,500 shares of Sepracor's Series B Redeemable
Exchangeable Preferred Stock for $5,000,000. On March 26, 1998, Sepracor and
Beckman terminated their Stock Purchase Agreement under which Beckman acquired
312,500 shares of Sepracor Series B Redeemable Exchangeable Preferred Stock.
Sepracor paid Beckman the original purchase price of the stock plus accrued
dividends totalling $6,850,000. In addition, BioSepra and Beckman amended their
distribution agreement whereby BioSepra granted a non-exclusive right to
manufacture instruments to Beckman, removed its obligation to manufacture
instruments for Beckman, and sold the discontinued instrument product inventory
to Beckman for $250,000.

                                       13
<PAGE>


Factors Affecting Future Operating Results

Certain of the information contained in this quarterly Report, including
information with respect to the safety, efficacy and potential benefits of the
Company's improved chemical entities ("ICEs") under development and the scope of
patent protection with respect to these products and information with respect to
the other plans and strategy for the Company's business and the business of the
subsidiaries and certain affiliates of the Company, consists of forward-looking
statements. Important factors that could cause actual results to differ
materially from the forward-looking statements include the following:

Since substantially all of Sepracor's ICEs are at the early stages of
development, there can be no assurance that these drugs will have improved
characteristics that provide greater benefits or fewer side effects than the
corresponding parent drugs or that research efforts undertaken by Sepracor will
lead to the discovery of future drugs with such improved characteristics. All of
the drugs under development will require significant additional research,
development, preclinical and/or clinical testing, regulatory approval and an
additional commitment of resources prior to their successful development and
commercialization. Sepracor has limited experience in conducting human clinical
trials and in manufacturing pharmaceutical products and has no experience in
marketing such products.

Proprietary rights relating to the products of Sepracor will be protected from
unauthorized use by third parties only to the extent that they are covered by
valid and enforceable patents or are maintained in confidence as trade secrets.

Sepracor has filed patent applications covering compositions containing, and
methods of using, single isomer or active-metabolite forms of various compounds
for specific applications. The ability to commercialize successfully any ICE
will depend to a significant degree upon the ability to obtain and maintain use
patents of sufficient scope to prevent third parties from developing similar or
competitive products. Most of the ICEs for which Sepracor has obtained use
patents or filed applications therefor are claimed by composition of matter or
other patents or patent applications held by third parties. In each such case,
unless subject to an existing license agreement, the ICE may not be
commercialized until the expiration of corresponding third party
composition-of-matter or other patents. There can be no assurance that any
pending patent applications relating to the products of Sepracor will result in
patents being issued or that any such patents will afford protection against
competitors with similar technology. There may be pending or issued third-party
patents relating to the product of Sepracor and Sepracor may need to acquire
licenses to, or to contest the validity of, any such patents. It is likely that
significant funds would be required to defend any claim that Sepracor infringes
a third-party patent, and any such claim could adversely affect sales of the
challenged product of Sepracor until the claim is resolved. There can be no
assurance that any license required under any such patent would be made
available. Certain of the technology that may be used in the products of
Sepracor is not covered by any patent or patent application. In the absence of
patent protection, the business of Sepracor may be adversely affected by
competitors who independently develop substantially equivalent technology.




                                       14
<PAGE>

In July 1997, the United States Patent and Trademark Office (the "PTO") informed
Sepracor that it had declared an interference between Sepracor's previously
issued use patent on fexofenadine to treat allergic rhinitis and another similar
patent application of Sepracor, and the use patent application of Hoechst Marion
Roussel Inc. ("HMRI") on the anti-histaminic effects of fexofenadine on
hepatically impaired patients. The primary objective of a patent interference,
which can only be declared by the PTO, is to determine which party was the first
to invent any overlapping subject matter claimed by more than one party. In the
course of an interference, the parties typically present evidence relating to
their invention of the overlapping subject matter. The PTO then reviews the
evidence to determine which party has the earliest legally sufficient date of
invention, and, therefore, is entitled to a patent claiming the overlapping
subject matter. If Sepracor prevails in the interference, Sepracor will retain
all of its claims in its issued patent. If, however, Sepracor loses the
interference, HMRI will be issued a U.S. patent containing its claims involved
in the interference and may not be obligated to pay Sepracor milestone or
royalty payments pursuant to the terms of the license agreement whereby Sepracor
licensed its U.S. patent rights covering fexofenadine to HMRI in 1993. Sepracor
and HMRI have agreed to resolve the interference by arbitration. Selection of
the arbitrator and initiation of the arbitration proceeding is expected to occur
in the first half of 1998. While it is possible that the arbitrator's decision
may be rendered during 1998, there can be no assurance that the arbitrator's
decision will be rendered at that time. Once rendered, the arbitrator's decision
must be submitted to the PTO for final approval. The interference is in its
early stages and the Company is unable to predict its outcome.

The marketing and sale of pharmaceutical products developed by Sepracor or its
development partners will require FDA approvals as well as similar approvals in
foreign countries. To obtain such approvals, the safety and efficacy of such
products must be demonstrated through clinical trials. There can be no assurance
that the results of such clinical trials will be consistent with the results
obtained in preclinical studies or that the results obtained in later phases of
clinical trials will be consistent with those obtained in earlier phases. There
also can be no assurance that any such products will be shown to be safe and
efficacious or that regulatory approval for any such products will be obtained
on a timely basis, if at all. The clinical trial and regulatory approval process
can take a number of years and require the expenditure of substantial resources.
With respect to certain of the Company's ICEs, the Company has been able to
shorten the regulatory approval process of its ICEs by relying on preclinical
and clinical toxicology data already on file with the FDA with respect to the
parent drug. Although Sepracor has to date been successful in employing this
strategy in connection with the approval process of certain of its proposed
products, there can be no assurance that the FDA will permit the Company to
utilize this strategy in the future. Accordingly, the Company may be required to
expend significant resources to complete such preclinical and clinical studies
for its other ICEs, thereby significantly delaying the regulatory approval
process. The failure of the Company to obtain regulatory approval on a timely
basis and unanticipated significant expenditures on preclinical and clinical
studies could adversely affect the financial condition of the Company. While the
Company expects FDA approval of its NDA for the nebulized form of levalbuterol
in late 1998, there can be no assurance that the FDA will approve such NDA by
such date, if at all.





                                       15
<PAGE>

The Company currently has very limited sales and marketing experience. If the
Company is successful in developing and obtaining regulatory approval for its
products under development, it expects to license certain products to large
pharmaceutical companies and market and sell certain other products through its
direct specialty sales forces or through other arrangements, including
co-promotion arrangements. In anticipation of expected FDA approval of the
nebulized form of levalbuterol later this year, the Company is beginning to
establish a direct sales force to market the inhalation solution of
levalbuterol. Further, as the Company begins to enter into co-promotion
arrangements or market and sell additional products directly, the Company will
need to significantly expand its sales force. It is expected that the Company
will incur significant expense in establishing its direct sales force. The
ability of the Company to realize significant revenues from its direct marketing
and sales activities is dependent on its ability to attract and retain qualified
sales personnel in the pharmaceutical industry. There can be no assurance,
however, that the Company will be able to attract and retain such qualified
sales personnel, that it will successfully expand its marketing and direct sales
force in the future on a timely basis, that the cost of establishing such
marketing or sales force will not exceed any product revenues, that its sales
and marketing efforts will be successful, or that the need to comply with FDA
limits on drug product marketing, including limits on claims of comparative
safety or efficacy, will not inhibit the effectiveness of such marketing. In
addition, the Company will need to enter into co-promotion arrangements with
third parties where its own direct sales force is neither well situated nor
large enough to achieve maximum penetration in the market. There can be no
assurance that the Company will be successful in entering into any such
arrangements or that the terms of any such arrangements will be favorable to the
Company.

Sepracor's ability to commercialize certain drugs that it develops is likely to
depend in significant part on its ability to enter into collaborative agreements
with pharmaceutical companies to fund all or part of the costs to complete the
development of such drugs and to manufacture and/or market such drugs. To date,
the Company has entered into three such collaborative agreements. The Company
has licensed its U.S. patent rights to Allegra (fexofenadine) to HMRI and is
entitled to receive royalties on all U.S. sales of Allegra when the patent on
the parent drug expires. The Company, however, is currently party to an
interference involving Allegra which, if decided adversely to the Company, could
result in the loss of all or substantially all of the royalties to which the
Company is entitled under the license agreement on future sales of Allegra. The
Company has also licensed its worldwide patent rights in DCL to Schering-Plough,
pursuant to which the Company is entitled to receive royalties from
Schering-Plough upon the initial sale of the product. The Company has entered
into an agreement with Janssen with respect to the joint development and
co-promotion of norastemizole. In each of these collaborative arrangements and,
to the extent the Company enters into additional collaborative arrangements, the
Company is dependent upon the efforts of the collaboration partners and there
can be no assurance that such efforts will be successful. If any collaborators
were to breach or terminate their agreements with the Company or fail to perform
their obligations thereunder in a timely manner, the development and
commercialization of the products could be delayed or terminated. Any such delay
or termination could have a material, adverse effect on the Company's financial
condition and results of operation. Sepracor's failure or inability to perform
certain of its obligations under a collaborative agreement could result in a
reduction or loss of the benefits to which Sepracor is otherwise entitled under
such agreement. There can be no assurance that Sepracor will be able to enter
into any such agreements for ICEs in the future or that such collaborative
agreements, if any, will be entered into on terms favorable to the Company.




                                       16
<PAGE>

The Company currently operates a current Good Manufacturing Practices ("cGMP")
compliant manufacturing plant which the Company believes has sufficient capacity
to support the production of its drugs in quantities required for its clinical
trials. While the Company believes it has the capability to scale up its
manufacturing processes and manufacture sufficient quantities of certain of the
products which may be approved for sale, without additional expansion, the
Company will not have the capability to manufacture in sufficient quantities all
of the products which may be approved for sale. Accordingly, the Company may be
required to expend additional resources to expand its current facility,
construct an additional facility or contract the production of these drugs to
third party manufacturers. There can be no assurance that the Company will have
the resources to expand its existing or develop additional facilities or
contract with manufacturers to produce its products in commercial quantities or
that any contract with third party manufacturers will be on favorable terms to
the Company. There can be no assurance that the Company will succeed in scaling
up its manufacturing processes or maintaining cGMP compliance. Failure in either
respect can lead to refusal by the FDA to approve marketing applications.
Failure to maintain cGMP compliance may also be the basis for action by the FDA
to withdraw approvals that have been granted and for other regulatory action.

The testing, marketing and sale of human health care products entails an
inherent risk of product liability and there can be no assurance that product
liability claims will not be asserted against Sepracor. Sepracor and its
subsidiaries maintain limited product liability insurance coverage for both the
clinical trials and commercialization of its products. There can be no assurance
that Sepracor will be able to obtain further product liability insurance on
acceptable terms, if at all, or that any current insurance subsequently obtained
will provide adequate coverage against all potential claims.

The Company will require substantial additional funds for its research and
product development programs, operating expenses, the pursuit of regulatory
approvals and expansion of its production, sales and marketing capabilities.
Adequate funds for these purposes, whether through equity or debt financing,
collaborative or other arrangements with corporate partners or from other
sources, may not be available when needed or at terms acceptable to the Company.
Insufficient funds could require the Company to delay, scale back or eliminate
certain of its research and product development programs or to license to third
parties to commercialize products or technologies that the Company would
otherwise develop or commercialize itself. While the Company believes that its
available cash balances will be sufficient to meet its capital requirements into
2000, the Company may need to raise additional funds to support its long term
product development and commercialization programs. There can be no assurance
that such capital will be available on favorable terms, if at all. The Company's
cash requirements may vary materially from those now planned because of results
of research and development, results of product testing, relationships with
customers, changes in focus and direction of the Company's research and
development programs, competitive and technological advances, patent
developments, the FDA regulatory process, the capital requirements of BioSepra
and Sepracor Canada Limited, and other factors.

The Company is currently evaluating the potential impact of the year 2000 on the
processing of date-sensitive information by the Company's computerized
information systems. The year 2000 problem is the result of computer programs
being written using two digits (rather than four) to define the applicable year.
Any of the Company's programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000, which could result
in miscalculation or system failures. Based on preliminary information, costs of
addressing potential problems are not currently expected to have a material
adverse impact on the Company's financial position, results of operations or
cash flows in the future periods. However, if the Company, its customers or
vendors are unable to resolve such processing issues in a timely manner, it
could result in a material financial risk. Accordingly, the Company plans to
devote the necessary resources to resolve all significant year 2000 issues in a
timely manner.




                                       17
<PAGE>

Other factors that may affect the Company's future operating results include the
Company's fluctuations in quarterly operating results, its ability to meet its
debt service requirements and to compete successfully in the market.

Factors that may affect the future operating results of Sepracor include the
ability of BioSepra to obtain additional financing, the dependence on BioSepra
sales of HyperD media, which was introduced in 1993, and BioSepra's ability to
sell its products to customers at the early stage of their product development
cycles.

Factors that may affect the future operating results of Sepracor include the
ability of HemaSure to develop commercially viable products and HemaSure's
limited number of customers.

Because of the foregoing factors, past financial results should not be relied
upon as an indication of future performance. The Company believes that
period-to-period comparisons of its financial results are not necessarily
meaningful and it expects that its results of operations may fluctuate from
period to period in the future.





                                       18
<PAGE>


                                     PART II
                                OTHER INFORMATION


Item 1.  Legal proceedings

In July 1997, the United States Patent and Trademark Office (the "PTO") informed
Sepracor that it had declared an interference between Sepracor's previously
issued method-of-use patent on fexofenadine to treat allergic rhinitis and
another similar patent application of Sepracor, and HMRI's method-of-use patent
application on the anti-histaminic effects of fexofenadine on hepatically
impaired patents. The primary objective of a patent interference, which can only
be declared by the PTO, is to determine the first to invent any overlapping
subject matter claimed by more than one party. In the course of an interference,
the parties typically present evidence relating to their inventive activities as
to the overlapping subject matter. The PTO then reviews the evidence to
determine which party has the earliest legally sufficient inventive date, and,
therefore, is entitled to a patent claiming the overlapping subject matter.

If Sepracor prevails in the interference, Sepracor will retain all of its claims
in its issued patent. If, however, Sepracor loses the interference, HMRI will be
issued a U.S. patent containing its claims involved in the interference and may
not be obligated to pay Sepracor milestone or royalty payments pursuant to the
terms of the license agreement whereby Sepracor licensed its U.S. patent rights
covering fexofenadine to HMRI in 1993.

HemaSure is a defendant in two lawsuits brought by Pall Corporation ("Pall"). In
complaints filed in February 1996 and November 1996, Pall alleged that
HemaSure's manufacture, use and/or sale of the LeukoNet product infringes upon
three patents held by Pall.





                                       19
<PAGE>

On October 14, 1996, in connection with the first action concerning U.S. Patent
No. 5,451,321(the "'321 patent"), HemaSure filed for summary judgment of
noninfringement. Pall filed a cross motion for summary judgment of infringement
at the same time.

In October 1997, the U.S. District Court of the Eastern District of New York
("the court") granted in part Pall's summary judgment motion relating to the
'321 patent. HemaSure has agreed to terminate manufacture, use, sale and offer
for sale of the filter, subject to the court's order. In April 1998, the court
granted to HemaSure its request to appeal the October 1997 decision.

With respect to the second action concerning U.S. Patent No. 4,952,572 (the
"'572 patent"), HemaSure has answered the complaint stating that it does not
infringe any claim of the asserted patents. Further, HemaSure has counterclaimed
for declaratory judgment of invalidity, noninfringement and unenforceability of
the '572 patent.

HemaSure believes, based on advice of its patent counsel, that a properly
informed court should conclude that the manufacture, use and/or sale by HemaSure
or its customers of the present LeukoNet product did not infringe any valid
enforceable claim of the two Pall patents. However, there can be no assurance
that HemaSure will prevail in the pending litigations, and an adverse outcome in
a patent infringement action would have a material adverse effect on HemaSures's
future business and operations.


Items 2 - 5        None
-----------




Item  6.    Exhibits and Reports on Form 8-K
--------    --------------------------------

     Exhibit listed in the Exhibit Index which immediately precedes the exhibits
attached thereto.

                  a) Exhibits:
                        27.1 Financial Data Schedule

                        27.2 Financial Data Schedule Restated

                  b) Reports on Form 8-K
                        
                      1. Form 8-K filed with the Securities and Exchange 
                         Commission on February 5, 1998.

                      2. Form 8-K filed with the Securities and Exchange 
                         Commission on February 11, 1998.





                                       20

<PAGE>


                                   SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





                                  SEPRACOR INC.


Date:    May 15, 1998                             /s/ Timothy J. Barberich
                                                  ---------------------------
                                                  Timothy J. Barberich
                                                  President and Chief
                                                  Executive Officer
                                                  (Principal Executive Officer)





Date:    May 15, 1998                             /s/ Robert F. Scumaci
                                                  -----------------------------
                                                  Robert F. Scumaci
                                                  Senior Vice President
                                                  of  Finance and Administration
                                                  (Principal Financial and
                                                  Accounting Officer)




                                       21