<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

(MARK ONE)

<TABLE>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

               FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2000

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-19410

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

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

<TABLE>
<S>                                            <C>
                  DELAWARE                                      22-2536587
       (State or Other Jurisdiction of                       (I.R.S. Employer
       Organization or Incorporation)                     Identification number)
</TABLE>

               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, 73,696,763 SHARES OUTSTANDING AT
NOVEMBER 3, 2000.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                 SEPRACOR INC.
                                     INDEX

<TABLE>
<S>      <C>                                                           <C>
Part I--Financial Information

Item 1.  Consolidated Condensed Financial Statements

         Consolidated Condensed Balance Sheets as of September 30,
         2000 and December 31, 1999 (Unaudited)......................    3

         Consolidated Statements of Operations for the Three- and
         Nine-Months Ended September 30, 2000 and 1999 (Unaudited)...    4

         Consolidated Statements of Cash Flows for the Nine-Months
         Ended September 30, 2000 and 1999 (Unaudited)...............    5

         Notes to Consolidated Interim Financial Statements..........    6

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

Item 3.  Quantitative and Qualitative Disclosures About Market
         Risk........................................................   19

Part II--Other Information

Item 6.  Exhibits and Reports on Form 8-K............................   20

Signatures...........................................................   21
</TABLE>

                                       2
<PAGE>
              ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                 SEPRACOR INC.

                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                  (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2000            1999
                                                              -------------   ------------
<S>                                                           <C>             <C>
ASSETS
Current assets:
Cash and cash equivalents...................................    $ 266,248       $  59,488
Short-term investments......................................      381,125         276,335
Accounts receivable, net....................................        7,780           4,485
Inventories, net............................................        6,477           4,455
Other current assets........................................        4,504           5,277
                                                                ---------       ---------
TOTAL CURRENT ASSETS........................................      666,134         350,040

Long-term investments.......................................       32,148              --
Property, plant and equipment, net..........................       20,282          19,003
Investment in affiliates....................................       23,906           3,141
Patents, intangible assets and other assets, net............       55,533          34,451
                                                                ---------       ---------
TOTAL ASSETS................................................    $ 798,003       $ 406,635
                                                                =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable............................................    $  13,116       $  20,196
Accrued expenses............................................       54,542          42,575
Loan guarantee of affiliate.................................           --           5,000
Notes payable and current portion of long-term debt and
  capital lease obligation..................................          120             120
Other current liabilities...................................        4,610           2,078
                                                                ---------       ---------
TOTAL CURRENT LIABILITIES...................................       72,388          69,969

Convertible subordinated debentures.........................      852,843         489,475
Other long-term debt and capital lease obligations..........        1,117           1,136
Other long-term liabilities.................................          406             826
                                                                ---------       ---------
TOTAL LIABILITIES...........................................      926,754         561,406

Minority interest...........................................        7,947             934

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock.............................................           --              --
Common stock................................................        7,365           6,748
Additional paid-in capital..................................      455,369         327,591
Unearned compensation, net..................................         (171)           (217)
Accumulated deficit.........................................     (619,942)       (489,370)
Accumulated other comprehensive income (loss)...............       20,681            (457)
                                                                ---------       ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)........................     (136,698)       (155,705)
                                                                ---------       ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)........    $ 798,003       $ 406,635
                                                                =========       =========
</TABLE>

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

                                       3
<PAGE>
                                 SEPRACOR INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                   -------------------------------   -------------------------------
                                                   SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                                        2000             1999             2000             1999
                                                   --------------   --------------   --------------   --------------
<S>                                                <C>              <C>              <C>              <C>
Revenues:
  Product sales..................................     $ 10,179         $  2,392         $  33,680        $   7,619
  Collaborative research and development.........           --               --             3,573            2,390
  License fees...................................           --               --            20,000               11
  Royalties and other............................        1,304               91             3,615              201
                                                      --------         --------         ---------        ---------
    TOTAL REVENUES...............................       11,483            2,483            60,868           10,221
Cost of revenues:
  Product........................................        2,262              877             7,786            2,157
  License fees...................................           --               --             2,000               --
  Royalties and other............................          272               29               849               70
                                                      --------         --------         ---------        ---------
    TOTAL COST OF REVENUES.......................        2,534              906            10,635            2,227
                                                      --------         --------         ---------        ---------
    GROSS MARGIN.................................        8,949            1,577            50,233            7,994
Operating expenses:
  Research and development.......................       34,968           34,690           105,480           77,252
  Selling, general and administrative and patent
    costs........................................       24,062           20,096            69,643           43,746
                                                      --------         --------         ---------        ---------
    TOTAL OPERATING EXPENSES.....................       59,030           54,786           175,123          120,998
                                                      --------         --------         ---------        ---------
Loss from operations.............................      (50,081)         (53,209)         (124,890)        (113,004)
Other income (expense):
  Interest income................................       11,683            5,304            30,872           16,975
  Interest expense...............................      (12,467)          (8,276)          (35,286)         (24,834)
  Other income (expense), net....................           70               70            (7,336)             132
  Equity in gain (loss) of investees.............        4,490               --             3,501           (2,509)
                                                      --------         --------         ---------        ---------
    TOTAL OTHER INCOME (EXPENSE).................        3,776           (2,902)           (8,249)         (10,236)
                                                      --------         --------         ---------        ---------
Net loss before minority interests...............      (46,305)         (56,111)         (133,139)        (123,240)
Minority interest in subsidiary..................        1,079              362             2,568              910
                                                      --------         --------         ---------        ---------
Net loss from continuing operations..............      (45,226)         (55,749)         (130,571)        (122,330)
Discontinued operations: Loss from discontinued
  operations (net of minority interests).........           --               --                --             (345)
                                                      --------         --------         ---------        ---------
NET LOSS.........................................     $(45,226)        $(55,749)        $(130,571)       $(122,675)
                                                      --------         --------         ---------        ---------
Basic and diluted net loss per common share from
  continuing operations..........................     $  (0.62)        $  (0.84)        $   (1.80)       $   (1.86)
                                                      --------         --------         ---------        ---------
Basic and diluted net loss per common share from
  discontinued operations........................           --               --                --        $   (0.01)
                                                      --------         --------         ---------        ---------
Basic and diluted net loss per common share......     $  (0.62)        $  (0.84)        $   (1.80)       $   (1.87)
                                                      --------         --------         ---------        ---------
Shares used in computing basic and diluted net
  loss per common share:
Basic and diluted................................       73,334           66,197            72,435           65,745
</TABLE>

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

                                       4
<PAGE>
                                 SEPRACOR INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (UNAUDITED)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED
                                                              -----------------------------
                                                              SEPTEMBER 30,   SEPTEMBER 30,
                                                                  2000            1999
                                                              -------------   -------------
<S>                                                           <C>             <C>
Cash flows from operating activities:
Net loss....................................................    $(130,571)      $(122,675)
Less: Loss from discontinued operations (net of minority
  interests)................................................           --            (345)
                                                                ---------       ---------
        NET LOSS FROM CONTINUING OPERATIONS.................     (130,571)       (122,330)
Adjustments to reconcile net loss from continuing operations
  to net cash used in operating activities:
  Depreciation and amortization.............................        8,322           5,134
  Minority interests in subsidiaries........................       (2,568)           (910)
  Equity in investee (gains) losses.........................       (3,501)          2,509
  Deferred compensation.....................................        1,195              --
  Other.....................................................           85              88
Changes in operating assets and liabilities:
  Accounts receivable.......................................       (3,409)         (2,143)
  Inventories...............................................       (2,022)         (5,814)
  Other current assets......................................          707          (2,708)
  Accounts payable..........................................       (7,080)         (2,097)
  Accrued expenses..........................................       11,967          12,499
  Other current liabilities.................................        2,512             155
                                                                ---------       ---------
        NET CASH USED IN OPERATING ACTIVITIES...............     (124,363)       (115,617)
Cash flows from investing activities:
  Purchases of short and long-term investments..............     (690,385)       (832,481)
  Sales and maturities of short and long-term investments...      553,518         689,517
  Additions to property and equipment.......................       (5,060)         (5,567)
  Purchase of intangible assets.............................      (12,500)        (10,000)
  Investment in subsidiary..................................       (5,000)             --
  Investment in affiliate...................................           --          (2,000)
  Promissory note to affiliate..............................           --            (500)
  BioSphere investment in affiliate.........................         (920)             --
  Other assets..............................................         (878)            148
                                                                ---------       ---------
        NET CASH USED IN INVESTING ACTIVITIES...............     (161,225)       (160,883)
Cash flows from financing activities:
  Net proceeds from issuance of common stock................       28,066           5,304
  Net proceeds from BioSphere issuance of common stock......       18,092              --
  Proceeds from sale of 5% debentures due 2007..............      460,000              --
  Costs associated with issuance of 5% debentures due
    2007....................................................      (14,033)             --
  Costs associated with issuance of 7% debentures due
    2005....................................................           --            (276)
  Net borrowings (repayments) of long-term debt, capital
    leases and line of credit agreements....................            5          (2,826)
                                                                ---------       ---------
        NET CASH PROVIDED BY FINANCING ACTIVITIES...........      492,130           2,202
Effect of exchange rate changes on cash and cash
  equivalents...............................................          218            (405)
                                                                ---------       ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........      206,760        (274,703)
Net cash provided by discontinued operations................           --           9,940
Cash and cash equivalents at beginning of period............       59,488         295,323
                                                                ---------       ---------
Cash and cash equivalents at end of period..................    $ 266,248       $  30,560
Non cash activities:
  Conversion of convertible subordinated debentures to
    shares of common stock..................................    $  96,632              --
  Common stock issued for intangible asset..................           --       $  (7,950)
Acquisition of BioSphere Medical:
  Liabilities assumed.......................................           --       $  (1,493)
  Fair value of assets acquired.............................           --       $   1,493
</TABLE>

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

                                       5
<PAGE>
               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 Sepracor'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 September 30, 2000 and 1999.

    The consolidated 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, 1999, which are contained in Sepracor's Annual Report on
Form 10-K/A for the year ended December 31, 1999, filed with the Securities and
Exchange Commission.

    The consolidated interim financial statements include the accounts of
Sepracor Inc. ("Sepracor" or the "Company") and its majority and wholly owned
subsidiaries, including BioSphere Medical, Inc. ("BioSphere") and Sepracor
Canada Limited.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

A) NEW ACCOUNTING PRONOUNCEMENTS

    In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101") which summarizes certain of the staff's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
In June 2000, the SEC issued SAB 101B which delays the implementation date of
SAB 101 until no later than the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. The Company does not expect SAB 101 to have a material
impact on its financial position and results of operations.

    In March 2000, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation" ("FIN 44"), which provides guidance for issues that have arisen in
applying APB No. 25, "Accounting for Stock Issued to Employees". This
Interpretation, which became effective July 1, 2000, applies prospectively to
new awards, exchanges or awards in a business combination, modifications to
outstanding awards, and changes in grantee status that occur on or after
July 1, 2000, except for the provisions related to repricings and the definition
of an employee which apply to awards issued after December 31, 1998. The Company
has evaluated the effects of FIN 44 on its financial position and results of
operations and has determined any such effects to be immaterial.

    In June 2000, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 138, "Accounting for Certain Derivative Instruments--an amendment
of SFAS 133" ("Accounting for Derivative Instruments and Hedging Activities").
This statement amends the accounting and reporting standards for certain
derivative instruments and hedging activities. The Company will adopt SFAS 138
in 2001, in accordance with SFAS 137, which deferred the effective date of
SFAS 133. The adoption of this standard in 2001 is not expected to have a
material impact on the Company's consolidated financial statements.

                                       6
<PAGE>
B) BASIC AND DILUTED NET (LOSS) PER COMMON SHARE

    Basic earnings (loss) per share ("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 anti-dilutive. 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 common stock using the treasury stock
method. For the three and nine months ended September 30, 2000 and 1999, 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.

    Certain securities were not included in the computation of diluted earnings
(loss) per share for the three and nine months ended September 30, 2000 and
1999, because they would have an anti-dilutive effect due to net losses for such
periods. These securities include: (i) options to purchase 9,591,000 shares of
common stock with purchase prices of $1.50 to $125.44 per share for the three
and nine months ended September 30, 2000 and options to purchase 10,651,000
shares of common stock with purchase prices of $1.00 to $59.13 per share for the
three and nine months ended September 30, 1999; (ii) 13,705,000 shares of common
stock issuable upon conversion of the 6 1/4% convertible subordinated debentures
due 2005, the 7% convertible subordinated debentures due 2005 and the 5%
convertible subordinated debentures due 2007 for the three and nine months ended
September 30, 2000, and (iii) 12,805,000 shares of common stock issuable upon
conversion of the 6 1/4% convertible subordinated debentures due 2005 and the 7%
convertible subordinated debentures due 2005 for the three and nine months ended
September 30, 1999.

3. INVENTORIES, NET:

    Inventories consist of the following:

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 2000   DECEMBER 31, 1999
(IN THOUSANDS)                                ------------------   -----------------
<S>                                           <C>                  <C>
Raw materials...............................        $2,073              $1,785
Work in progress............................         1,447                 765
Finished goods..............................         2,957               1,905
                                                    ------              ------
                                                    $6,477              $4,455
</TABLE>

    The increase in inventory at September 30, 2000 is primarily due to
increased production of Xopenex-Registered Trademark-.

4. PATENTS, INTANGIBLE ASSETS AND OTHER ASSETS, NET:

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 2000   DECEMBER 31, 1999
(IN THOUSANDS)                                ------------------   -----------------
<S>                                           <C>                  <C>
Deferred finance costs, net (1).............        $21,705             $12,720
Intangible assets and patents, net (2)......         32,399              20,922
Other assets................................          1,429                 809
                                                    -------             -------
                                                    $55,533             $34,451
</TABLE>

(1) September 30, 2000 balance includes $14,033 of costs associated with the
    $460,000 of 5% convertible subordinated debentures due 2007 issued in the
    first quarter of 2000.

(2) September 30, 2000 balance includes $12,500 for the purchase of an exclusive
    license under patent rights related to an allergy product.

                                       7
<PAGE>
5. CONVERTIBLE SUBORDINATED DEBENTURES:

<TABLE>
<CAPTION>
                                                               SEPTEMBER 30, 2000   DECEMBER 31, 1999
(IN THOUSANDS)                                                 ------------------   -----------------
<S>                                                            <C>                  <C>
6.25% convertible subordinated debentures due
 2005 (1)(2)................................................        $ 92,883            $189,475
7.00% convertible subordinated debentures due 2005 (1)......         299,960             300,000
5.00% convertible subordinated debentures due 2007 (3)......         460,000                  --
                                                                    --------            --------
                                                                    $852,843            $489,475
</TABLE>

(1) The decrease represents debentures converted into Sepracor common stock
    (conversion of $96,424 of principal amount of 6.25% convertible subordinated
    debentures in the first quarter of 2000 included costs of $7,497).

(2) Deferred finance costs of approximately $2,373 were written off against
    additional paid-in capital as a result of the conversion of $96,424 of
    principal amount of 6.25% convertible subordinated debentures in the first
    quarter of 2000.

(3) Represents $460,000 of principal amount of 5% convertible subordinated
    debentures due 2007 issued in the first quarter of 2000.

6. COMPREHENSIVE INCOME (LOSS):

    Total comprehensive income (loss) is comprised of net income (loss), net
currency translation adjustments, and unrealized gain (loss) on
available-for-sale securities.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED               NINE MONTHS ENDED
                                            -----------------------------   -----------------------------
                                            SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                2000            1999            2000            1999
(IN THOUSANDS)                              -------------   -------------   -------------   -------------
<S>                                         <C>             <C>             <C>             <C>
Comprehensive income (loss):
  Net loss................................    $(45,226)       $(55,749)       $(130,571)      $(122,675)
  Cumulative translation adjustment.......         159            (218)             219            (405)
  Unrealized gain on available-for-sale
    securities............................      20,865              --           20,919              --
                                              --------        --------        ---------       ---------
  Total comprehensive income (loss).......    $(24,202)       $(55,967)       $(109,433)      $(123,080)
</TABLE>

7. SUBSIDIARIES AND AFFILIATES:

BIOSPHERE

    On February 4, 2000, BioSphere announced that it had completed a private
placement of approximately $5,900,000 of BioSphere common stock and warrants.
Investors purchased 653,887 shares of BioSphere common stock and warrants to
purchase 163,468 shares of BioSphere common stock. As a result of this
transaction, Sepracor's ownership of BioSphere decreased from approximately 64%
to 59% as of February 2000. The transaction resulted in Sepracor recording a net
gain of approximately $2,771,000 through additional paid-in capital.

    On July 31, 2000, BioSphere sold approximately $13,000,000 of its common
stock to a small group of investors in a private equity placement. Of this
amount, Sepracor purchased approximately $5,000,000 of BioSphere common stock.
As a result of the transaction, Sepracor recorded a net gain of approximately
$1,702,000 through additional paid-in capital and the Company's ownership in
BioSphere decreased from approximately 58% to 56%.

                                       8
<PAGE>
HEMASURE

    On March 3, 2000, HemaSure Inc. ("HemaSure") announced that it had completed
a $28,000,000 private placement of common stock, consisting of 3,730,000 shares
of HemaSure common stock, thereby reducing Sepracor's ownership to approximately
22%. The transaction resulted in Sepracor recording a gain of approximately
$1,417,000 through additional paid-in capital.

    In September 2000, HemaSure repaid its $5,000,000 commercial bank loan,
which had been guaranteed by Sepracor. As a result, Sepracor recorded a
$5,000,000 equity in investee gain and removed the corresponding liability for
the loan guarantee. Sepracor has recorded $510,000 and $1,499,000 as its share
of HemaSure losses for the three and nine month periods ended September 30,
2000. At September 30, 2000, Sepracor's investment in HemaSure was zero.

VERSICOR

    In August 2000, Versicor Inc. ("Versicor") completed an initial public
offering of 5,290,000 shares of its common stock. Sepracor owns 1,593,750
shares, or approximately 7%, of Versicor's outstanding common stock. Sepracor
considers its investment in Versicor as an available-for-sale security and as
such has marked-to-market its investment at the September 30, 2000 market price
of $15.00 per share, which resulted in the recording of an unrealized gain of
$20,848,000 for the three months ended September 30, 2000.

8. LILLY AGREEMENT AND SUBSEQUENT EVENT:

    On April 13, 2000, the Company announced that the Federal Trade Commission
closed its investigation, under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, of the Lilly (R)-fluoxetine agreement that allows Lilly and
Sepracor to exclusively develop and globally commercialize (R)-fluoxetine.
(R)-fluoxetine, a new chemical entity, is a modified form of an active
ingredient found in Prozac-Registered Trademark-. Upon closing this transaction,
the Company received an initial milestone payment and license fee of
$20,000,000. The Company has no further work to be performed related to the
agreement and has recorded this as revenue in the second quarter of 2000. The
Company has also recorded $3,573,000 of collaborative research and development
revenue in the second quarter of 2000, related to previous costs incurred in the
development of (R)-fluoxetine under the Lilly (R)-fluoxetine agreement.

    On October 19, 2000, the Company announced that it had been notified by Eli
Lilly and Company ("Lilly") that Lilly had terminated the exclusive license
agreement covering (R)-fluoxetine (the "Lilly (R)-fluoxetine agreement"). In
accordance with the agreement, Lilly will return the existing scientific data on
the project to Sepracor.

9. LITIGATION:

    The legal proceedings relating to HemaSure, Sepracor's 22% owned subsidiary,
are currently no longer material to Sepracor as Sepracor's investment in
HemaSure was zero at September 30, 2000.

                                       9
<PAGE>
                                    ITEM 2.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    This Quarterly Report on Form 10-Q contains, in addition to historical
information, forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. These forward looking statements
involve risk and uncertainties and are not guarantees of future performance.
Sepracor's actual results could differ significantly from the results discussed
in such forward-looking statements. See "Factors Affecting Future Operating
Results" below.

OVERVIEW

    Sepracor is a specialty pharmaceutical company focused on the cost-effective
development of safer, purer and more effective drugs that are improved versions
of widely-prescribed pharmaceutical compounds.

    The consolidated interim financial statements include the accounts of
Sepracor Inc. ("Sepracor" or the "Company") and its majority and wholly-owned
subsidiaries, including BioSphere Medical, Inc. ("BioSphere") and Sepracor
Canada Limited.

    On October 19, 2000, the Company announced that it had been notified by Eli
Lilly and Company ("Lilly") that Lilly had terminated the exclusive license
agreement covering (R)-fluoxetine (the "Lilly (R)-fluoxetine agreement"). In
accordance with the license agreement, Lilly will return the existing scientific
data on the project to Sepracor. Given the risk and timing of the development of
(R)-fluoxetine, and following an assessment of the competitive environment,
which includes (R)-didesmethylsibutramine ("(R)-DDMS"), Sepracor's compound for
the treatment of depression which is currently in Phase II clinical trials,
Sepracor has decided not to pursue the development of (R)-fluoxetine at this
time.

    In September 2000, HemaSure Inc. ("HemaSure") repaid its $5,000,000
commercial bank loan, which had been guaranteed by Sepracor. As a result,
Sepracor recorded a $5,000,000 equity in investee gain and removed the
corresponding liability for the loan guarantee.

    In August 2000, Versicor Inc. ("Versicor") completed an initial public
offering of 5,290,000 shares of its common stock. Sepracor owns 1,593,750
shares, or approximately 7%, of Versicor's outstanding common stock. Sepracor
considers its investment in Versicor as an available-for-sale security and as
such has marked-to-market its investment at the September 30, 2000 market price
of $15.00 per share, which resulted in the recording of an unrealized gain of
$20,848,000 for the three months ended September 30, 2000.

    On July 31, 2000, BioSphere sold approximately $13,000,000 of its common
stock to a small group of investors in a private equity placement. Of this
amount, Sepracor purchased approximately $5,000,000 of BioSphere common stock.
As a result of the transaction, Sepracor recorded a net gain of approximately
$1,702,000 through additional paid-in capital and the Company's ownership in
BioSphere decreased from approximately 58% to 56%.

    On April 13, 2000, the Company announced that the Federal Trade Commission
closed its investigation, under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, of the Lilly (R)-fluoxetine agreement that allows Lilly and
Sepracor to exclusively develop and globally commercialize (R)-fluoxetine.
(R)-fluoxetine, a new chemical entity, is a modified form of an active
ingredient found in Prozac-Registered Trademark-. Upon closing this transaction,
the Company received an initial milestone payment and license fee of
$20,000,000. The Company has no further work to be performed related to the
agreement and has recorded this as revenue in the second quarter of 2000. The
Company has also recorded $3,573,000 of collaborative research and development
revenue in the second quarter of 2000,

                                       10
<PAGE>
related to previous costs incurred in the development of (R)-fluoxetine under
the Lilly (R)-fluoxetine agreement.

    On March 3, 2000, HemaSure announced that it had completed a $28,000,000
private placement of 3,730,000 shares of its common stock, thereby reducing
Sepracor's ownership to approximately 22%. The transaction resulted in Sepracor
recording a net gain of approximately $1,417,000 through additional paid-in
capital.

    In the first quarter of 2000, the Company issued $460,000,000 in principal
amount of 5% convertible subordinated debentures due 2007 (the "5% Debentures").
The 5% Debentures have an annual interest rate of 5% and are convertible at the
option of the holder into Sepracor common stock at $92.38 per share.

    In February 2000, the Company converted $96,424,000 of its 6 1/4%
convertible subordinated debentures due 2005 (the "6 1/4% Debentures"). Costs
related to the conversion of the 6 1/4% Debentures, including inducements and
other costs, were approximately $7,497,000. Deferred finance costs of
approximately $2,373,000 were written off against additional paid-in capital as
a result of the conversion.

    On February 4, 2000, BioSphere announced that it had completed a private
equity placement of approximately $5,900,000 of common stock and warrants.
Investors purchased 653,887 shares of BioSphere common stock and warrants to
purchase an additional 163,468 shares of BioSphere common stock. As a result of
this transaction, Sepracor's ownership of BioSphere decreased from approximately
64% to 59% as of February 2000. The transaction resulted in Sepracor recording a
net gain of approximately $2,771,000 through additional paid-in capital.

    On February 25, 2000, the Company effected a two-for-one stock split, which
was paid in the form of a 100% stock dividend to stockholders of record on
February 1, 2000.

    In May 1999, Sepracor commercially introduced Xopenex-Registered Trademark-,
a single-isomer form of the leading bronchodilator, albuterol. Xopenex is the
first pharmaceutical product developed and commercialized by Sepracor.

    For the remainder of 2000, the Company expects that it will incur increasing
expenses, primarily in research and development and sales and marketing, as a
result of efforts to advance the development of its portfolio of pharmaceuticals
and drug candidates, and activities relating to the sales and marketing of
Xopenex. The Company also expects to continue to pursue additional corporate
partnering and alliance arrangements including out-licensing agreements,
co-promotion arrangements, development collaborations and merger or acquisition
opportunities.

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999

    Product revenues were $10,179,000 and $33,680,000 for the three and nine
months ended September 30, 2000, respectively, compared to $2,392,000 and
$7,619,000, respectively, for the same periods in 1999. The increase for the
three and nine month periods ended September 30, 2000 is due primarily to sales
of Xopenex, which the Company commercially introduced in May 1999.

    Collaborative research and development revenues were $0 and $3,573,000 for
the three and nine months ended September 30, 2000, respectively, compared to $0
and $2,390,000, respectively, for the same periods in 1999. The increase for the
nine months ended September 30, 2000 is attributable to proceeds from the Lilly
(R)-fluoxetine agreement offset by the termination of the research and
development studies conducted by Sepracor under the collaborative license
agreement between Sepracor and Janssen Pharmaceutica N.V. ("Janssen"), dated
January 30, 1998, for the development of norastemizole.

                                       11
<PAGE>
    License fee revenues were $0 and $20,000,000 for the three and nine months
ended September 30, 2000, respectively, compared to $0 and $11,000,
respectively, for the same periods in 1999. The increase for the nine months
ended September 30, 2000 is attributable to an initial milestone payment
received under the Lilly (R)-fluoxetine agreement.

    Royalty and other revenues were $1,304,000 and $3,615,000 for the three and
nine months ended September 30, 2000, respectively, compared to $91,000 and
$201,000, respectively, for the same periods in 1999. The increase in revenues
is due to proceeds from the royalty agreement with Hoechst Marion Roussel, Inc.
(now Aventis) under which Sepracor currently receives royalties on non-U.S.
sales of fexofenadine in countries where Sepracor holds issued patents on
fexofenadine. The increase is also due to other revenues generated by BioSphere.

    Cost of product revenues, as a percentage of product revenues, was 22% and
23% for the three and nine months ended September 30, 2000, respectively,
compared to 37% and 28%, respectively, for the same periods in 1999. The
decrease of cost of product revenues as a percentage of product revenues for the
three and nine months ended September 30, 2000 is due to an increase of sales of
pharmaceutical products as a percentage of total product sales, which have a
lower cost as a percentage of product revenues, as compared to
non-pharmaceutical product sales, particularly in 2000. Pharmaceutical product
sales represented 94% and 97% of total product sales, respectively, for the
three and nine months ended September 30, 2000, compared to 75% and 79% for the
same periods ended September 30, 1999. Additionally, the cost of
non-pharmaceutical product sales as a percentage of non-pharmaceutical product
revenues declined significantly in 2000 as BioSphere began to increase sales of
its higher margin EmboSphere Microsphere line of medical devices.

    Cost of license fee revenues were $0 and $2,000,000 for the three and nine
months ended September 30, 2000, respectively, compared to $0 and $0,
respectively, for the same period in 1999. The $2,000,000 represents sublicense
fees owed under a license agreement with McLean Hospital pertaining to patents
related to the Lilly (R)-fluoxetine agreement.

    Research and development expenses were $34,968,000 and $105,480,000 for the
three and nine months ended September 30, 2000, respectively, compared to
$34,690,000 and $77,252,000, respectively, for the same periods in 1999. The
increase for the nine months ended September 30, 2000 is primarily due to
increased clinical study costs relating to norastemizole, zopiclone and
(R)-DDMS, as well as increased personnel costs.

    Selling, general and administrative and patent expenses were $24,062,000 and
$69,643,000 for the three and nine months ended September 30, 2000,
respectively, compared to $20,096,000 and $43,746,000, respectively, for the
same periods in 1999. The increase in the nine months ended September 30, 2000
is primarily due to the addition of two third-party contracted sales forces and
sales and marketing infrastructure development. In the third quarter, the
Company terminated one of the third-party contracted sales force agreements and
hired approximately 117 new sales representatives as full time employees.

    The net of interest income, interest (expense) and other income (expense)
was $(714,000) and $(11,750,000) for the three and nine months ended
September 30, 2000, respectively, compared to $(2,902,000) and $(7,727,000),
respectively, for the same periods in 1999. The decrease in expense for the
three month period ended September 30, 2000 is attributable to additional
interest income from higher rates of return on investments and greater
investment balances primarily from the proceeds of the 5% Debentures, partially
offset by additional interest expense related to the 5% Debentures. The increase
in expense for the nine month period ended September 30, 2000 is primarily the
result of the conversion of $96,424,000 in principal amount of 6 1/4%
Debentures, which resulted in inducements and other costs of $7,497,000 in the
first quarter of 2000 and additional interest expense related to the 5%
Debentures, partially offset by additional interest income from higher rates of
return on investments and greater investment balances primarily from the
proceeds of the 5% Debentures.

                                       12
<PAGE>
    Equity in gain (loss) of investees was $4,490,000 and $3,501,000 for the
three and nine months ended September 30, 2000, respectively, compared to $0 and
($2,509,000), respectively, for the same periods in 1999. The gains in the three
and nine month periods in 2000 are due primarily to the reversal of a $5,000,000
HemaSure loan guarantee during the third quarter of 2000 partially offset by
Sepracor's portion of HemaSure losses. The loss in the nine month period ended
in 1999 represents Sepracor's portion of HemaSure and Versicor losses.

    Minority interest in subsidiary from continuing operations resulted in a
decrease to consolidated net loss of $1,079,000 and $2,568,000 for the three and
nine months ended September 30, 2000, respectively, compared to $362,000 and
$910,000, respectively, for the same periods in 1999. The fluctuation in
minority interest is the result of the minority interest in BioSphere increasing
from approximately 36% to 44% and due to BioSphere recording a larger net loss
in the three and nine month periods ended September 30, 2000 than in the three
and nine month periods ended September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents and short and long-term investments totaled
$679,521,000 at September 30, 2000, compared to $335,823,000 at December 31,
1999.

    The net cash used in operating activities for the nine months ended
September 30, 2000 was $124,363,000. The net cash used in operating activities
includes a net loss from continuing operations of $130,571,000 adjusted by
non-cash charges of $3,533,000. Accounts receivable increased by $3,409,000 due
to increased sales of Xopenex in September 2000. Inventory increased by
$2,022,000 primarily due to increased production of Xopenex inventory. Accounts
payable decreased by $7,080,000 due to the timing of cash disbursements. Accrued
expenses increased by $11,967,000 due primarily to increased sales and marketing
activities and additional accrued interest related to the 5% Debentures.

    The net cash used in investing activities for the nine months ended
September 30, 2000 was $161,225,000. Cash was invested primarily in net
purchases of short and long-term investments of $136,867,000, purchases of
property and equipment of $5,060,000 and the purchase of an intangible asset of
$12,500,000 for an exclusive license under patent rights primarily related to an
allergy product and an investment of $5,000,000 in BioSphere.

    The net cash provided by financing activities for the nine months ended
September 30, 2000 was $492,130,000. The Company received approximately
$445,967,000 in net proceeds from the issuance of the 5% Debentures. The Company
also received approximately $28,066,000 in proceeds from the issuance of
Sepracor common stock and $18,092,000 from BioSphere's issuance of common stock.

    In the first quarter of 2000, the Company issued $460,000,000 in principal
amount of 5% convertible subordinated debentures due 2007. The 5% Debentures
have an annual interest rate of 5% and are convertible into Sepracor common
stock at the option of the holder, at $92.38 per share.

    In February 2000, the Company converted $96,424,000 of its 6 1/4%
convertible subordinated debentures due 2005. Costs related to the conversion of
the 6 1/4% Debentures, including inducements and other costs, were approximately
$7,497,000. Deferred finance costs of approximately $2,373,000 were written off
against additional paid-in capital as a result of the conversion.

    The Company believes its existing cash and the anticipated cash flow from
its current strategic alliances and operations will be sufficient to support
existing operations for the near term. Sepracor's actual future cash
requirements, however, will depend on many factors, including the progress of
its preclinical, clinical, and research programs, the number and breadth of
these programs, achievement of milestones under these strategic alliance
arrangements, sales of its products, acquisitions, its ability to establish and
maintain additional strategic alliance and licensing arrangements, and the
progress of the Company's development efforts and the development efforts of its
strategic partners.

                                       13
<PAGE>
FACTORS AFFECTING FUTURE OPERATING RESULTS

    You should carefully consider the following risks before making an
investment decision. You should also refer to the other information set forth in
this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains
forward-looking statements that involve risks and uncertainties. Our actual
results could vary significantly from the results discussed in the forward-
looking statements. Some risks that could cause our results to vary are
disclosed below.

    WE HAVE NEVER BEEN PROFITABLE AND WE MAY NOT BE ABLE TO GENERATE REVENUES
SUFFICIENT TO ACHIEVE PROFITABILITY. We have not been profitable since
inception, and it is possible that we will not achieve profitability. We
incurred net losses applicable to common shares on a consolidated basis of
approximately $130.6 million for the nine months ended September 30, 2000 and
$183.1 million for the year ended December 31, 1999. We expect to continue to
incur operating and capital expenditures. As a result, we will need to generate
significant revenues to achieve and maintain profitability. We cannot assure you
that we will achieve significant revenues or that we will ever achieve
profitability. Even if we do achieve profitability, we cannot assure you that we
can sustain or increase profitability on a quarterly or annual basis in the
future. If revenues grow more slowly than we anticipate or if operating expenses
exceed our expectations or cannot be adjusted accordingly, our business, results
of operations and financial conditions will be materially and adversely
affected. Our ability to generate profitability will depend in large part on
successful commercialization of our initial products and successful development
and commercialization of principal products under development. Failure to
successfully commercialize these products may have a material adverse effect on
our business. In October 2000, we announced that Lilly had notified us that it
was terminating the (R)-fluoxetine agreement. Accordingly, we will not receive
the royalties that we would have received if (R)-fluoxetine had been
successfully developed and commercialized by Lilly or milestone payments based
upon achievement by Lilly of certain development objectives. As a result, our
revenues will be adversely affected. In addition, if other collaborative
development arrangements are terminated, then successful commercialization of
our products under development may be delayed or terminated which could have a
material adverse effect on our business.

    WE WILL BE REQUIRED TO EXPEND SIGNIFICANT RESOURCES FOR RESEARCH,
DEVELOPMENT, TESTING AND REGULATORY APPROVAL OF OUR DRUGS UNDER DEVELOPMENT AND
THESE DRUGS MAY NOT BE DEVELOPED SUCCESSFULLY. We are focused on the development
of improved versions of widely prescribed pharmaceutical compounds which we
refer to as improved chemical entities, or ICEs. Most of our ICEs are still
undergoing clinical trials or are in the early stages of development. Our drugs
may not provide greater benefits or fewer side effects than the original
versions of these drugs and our research efforts may not lead to the discovery
of new drugs with improved characteristics. All of our drugs under development
will require significant additional research, development, preclinical and/or
clinical testing, regulatory approval and a commitment of significant additional
resources prior to their commercialization. Our potential products may not:

    - be developed successfully;

    - be proven safe and efficacious in clinical trials;

    - offer therapeutic or other improvements over comparable drugs;

    - meet applicable regulatory standards;

    - be capable of being produced in commercial quantities at acceptable costs;
      or

    - be successfully marketed.

    IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR FACE A
CLAIM OF INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, THEN WE COULD LOSE
VALUABLE INTELLECTUAL PROPERTY RIGHTS, BE LIABLE FOR SIGNIFICANT DAMAGES OR BE
PREVENTED FROM COMMERCIALIZING OUR PRODUCTS. Our success

                                       14
<PAGE>
depends in part on our ability to obtain and maintain patents, protect trade
secrets and operate without infringing upon the proprietary rights of others. In
the absence of patent and trade secret protection, competitors may adversely
affect our business by independently developing and marketing substantially
equivalent products and technology and preventing us from marketing our
products. It is also possible that we could incur substantial costs in
litigation if we are required to defend ourselves in patent suits brought by
third parties, or if we are required to initiate litigation against others to
protect our intellectual property rights.

    We have filed various patent applications covering the composition of, and
the methods of using, single-isomer or active-metabolite forms of various
compounds for specific applications. Our revenues under collaboration agreements
with pharmaceutical companies depend in part on the existence of issued patents.
However, we may not be issued patents in respect of the patent applications
already filed or that we file in the future. Moreover, the patent position of
companies in the pharmaceutical industry generally involves complex legal and
factual questions, and recently has been the subject of much litigation. Legal
standards relating to the scope and validity of patent claims in the
pharmaceutical field are evolving. Any patents we have obtained, or obtain in
the future, may be challenged, invalidated or circumvented. Moreover, the PTO
may commence interference proceedings involving our patents or patent
applications. Any challenge to, or invalidation or circumvention of, our patents
or patent applications could have a material adverse effect on our business.

    Our ability to commercialize successfully any ICE will largely depend upon
our ability to obtain and maintain use patents of sufficient scope to prevent
third parties from developing similar or competitive products. Third parties,
typically drug companies, hold patents or patent applications covering the
composition of matter for most of the ICEs for which we have use patents or
patent applications. In each of these cases, unless we have or obtain a license
agreement, we generally may not commercialize the ICE until the expiration of
these third-party patents. Licenses may not be available to us on acceptable
terms, if at all. In addition, it would be costly for us to contest the validity
of a third-party patent or defend any claim that we infringe a third-party
patent. Moreover, litigation involving third-party patents may not be resolved
in our favor.

    IF OUR PRODUCTS DO NOT RECEIVE GOVERNMENT APPROVAL, THEN WE WILL NOT BE ABLE
TO COMMERCIALIZE THEM. The U.S. Food and Drug Administration ("FDA") and similar
foreign agencies must approve the marketing and sale of pharmaceutical products
developed by us or our development partners. These agencies impose substantial
requirements on the manufacture and marketing of drugs. Our failure to obtain
regulatory approval on a timely basis and any unanticipated significant
expenditures on preclinical and clinical studies could adversely affect the
funds we will require to advance our products to commercialization and the
timing of the commercial introduction of, or our ability to, market and sell our
products.

    The regulatory process to obtain marketing approval requires clinical trials
of a product to establish its safety and efficacy. Problems that may arise
during clinical trials include:

    - results of clinical trials may not be consistent with preclinical study
      results;

    - results from later phases of clinical trials may not be consistent with
      the results from earlier phases; and

    - products may not be shown to be safe and efficacious.

    Even if the FDA or similar foreign agencies grant us regulatory approval of
a product, the approval may be subject to limitations on the indicated uses for
which the product may be marketed or contain requirements for costly
post-marketing follow-up studies. Moreover, if we fail to comply with applicable
regulatory requirements, we may be subject to fines, suspension or withdrawal of
regulatory approvals, product recalls, seizure of products, operating
restrictions and criminal prosecution.

                                       15
<PAGE>
    THE DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS COULD BE DELAYED OR
TERMINATED IF OUR COLLABORATIVE PARTNERS TERMINATE, OR FAIL TO PERFORM THEIR
OBLIGATIONS UNDER, THEIR AGREEMENTS WITH US OR IF ANY OF OUR COLLABORATION
AGREEMENTS IS SUBJECT TO LENGTHY GOVERNMENT REVIEW. We have entered into
collaboration arrangements with pharmaceutical companies. Our revenues under
these collaboration arrangements will consist primarily of milestone payments
and royalties on sales of products. Any such payments and royalties will depend
in large part on the efforts of our collaboration partners. If any of our
collaboration partners does not devote sufficient time and resources to its
collaboration arrangement with us, the potential commercial benefits of the
arrangement may not be realized by us, and our results of operations may be
adversely affected. In addition, if any of our collaboration partners were to
breach or terminate their agreements with us or fail to perform their
obligations to us in a timely manner, the development and commercialization of
the products could be delayed or terminated. Any delay or termination of this
type could have a material, adverse effect on our financial condition and
results of operations because we may be required to expend additional funds to
bring our products to commercialization, and milestone or royalty payments from
collaborative partners or revenue from product sales, if any, could be delayed
or terminated. In October 2000, we announced that Lilly had notified us that it
intended to terminate the (R)-fluoxetine agreement. As a result, development of
(R)-fluoxetine has terminated and we will not receive the royalties we would
have received if (R)-fluoxetine had been successfully developed and
commercialized or milestone payments based upon achievement by Lilly of certain
development objectives. Any failure or inability by us to perform some of our
obligations under a collaboration agreement could reduce or extinguish the
benefits to which we are otherwise entitled under the agreement.

    Development and commercialization of some of our product candidates may
depend on our ability to enter into additional collaboration agreements with
pharmaceutical companies to fund all or part of the costs of development and
commercialization of such product candidates. There can be no assurance that we
will be able to enter into collaboration agreements for ICEs in the future or
that the terms of the collaboration agreements, if any, will be favorable to us.
The inability to enter into collaboration agreements in the future could delay
or preclude the development, manufacture and/or marketing of some of our drugs
and could have a material adverse effect on our financial condition and results
of operations because:

    - we may be required to expend additional funds to advance the drugs to
      commercialization;

    - revenue from product sales could be delayed; or

    - we may elect not to commercialize the drugs.

    We are required to file a notice under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, for certain agreements containing
exclusive license grants and to delay the effectiveness of any such exclusive
license until the expiration or earlier termination of the notice and waiting
period under the HSR Act. If the expiration or termination of the notice and
waiting period under the HSR Act is delayed because of lengthy government
review, or if the Federal Trade Commission or Department of Justice successfully
challenges such a license, development and commercialization could be delayed or
precluded and our business could be adversely affected.

    WE HAVE LIMITED SALES AND MARKETING EXPERIENCE AND EXPECT TO INCUR
SIGNIFICANT EXPENSES IN DEVELOPING A SALES FORCE. IN ADDITION, OUR LIMITED SALES
AND MARKETING EXPERIENCE MAY RESTRICT OUR SUCCESS IN COMMERCIALIZING OUR
PRODUCTS. We currently have limited marketing and sales experience. If we
successfully develop and obtain regulatory approval for the products we are
currently developing, we may license some of them to large pharmaceutical
companies and market and sell through our direct specialty sales forces or
through other arrangements, including co-promotion arrangements. We have
established a direct sales force to market Xopenex, our single isomer form of
albuterol. As we begin to enter into co-promotion arrangements or market and
sell additional products directly, we will need to significantly expand our
sales force. We expect to incur significant expense in expanding our direct
sales

                                       16
<PAGE>
force. Our limited experience in developing, maintaining and expanding a direct
specialty sales force may restrict our success in commercializing our products.

    Our ability to realize significant revenues from direct marketing and sales
activities depends on our ability to attract and retain qualified sales
personnel in the pharmaceutical industry and competition for these persons is
intense. If we are unable to attract and retain qualified sales personnel, we
will not be able to successfully expand our marketing and direct sales force on
a timely or cost effective basis. We may also need to enter into additional
co-promotion arrangements with third parties where our own direct sales force is
neither well situated nor large enough to achieve maximum penetration in the
market. We may not be successful in entering into any co-promotion arrangements,
and the terms of any co-promotion arrangements may not be favorable to us. We
cannot control the level of effort and quality of service provided by
co-promoters or any third party sales force. If the level of effort provided by
these third parties is not adequate, our revenues may be adversely affected.

    IF WE DO NOT MAINTAIN CURRENT GOOD MANUFACTURING PRACTICES, THEN THE FDA
COULD REFUSE TO APPROVE MARKETING APPLICATIONS. WE DO NOT HAVE THE CAPABILITY TO
MANUFACTURE IN SUFFICIENT QUANTITIES ALL OF THE PRODUCTS WHICH MAY BE APPROVED
FOR SALE AND DEVELOPING AND OBTAINING THIS CAPABILITY WILL BE TIME CONSUMING AND
EXPENSIVE. The FDA and other regulatory authorities require that our products be
manufactured according to their Good Manufacturing Practices standards. Our
failure to maintain current Good Manufacturing Practices compliance and/or scale
up our manufacturing processes could lead to refusal by the FDA to approve
marketing applications. Failure in either respect could also be the basis for
action by the FDA to withdraw approvals previously granted and for other
regulatory action.

    Failure to increase our manufacturing capabilities may mean that even if we
develop promising new products, we may not be able to produce them. We currently
operate a manufacturing plant that is compliant with current Good Manufacturing
Practices that we believe can produce commercial quantities of Xopenex and
support the production of our other possible products in amounts needed for our
clinical trials. However, we will not have the capability to manufacture in
sufficient quantities all of the products which may be approved for sale.
Accordingly, we will be required to spend money to expand our current
manufacturing facility, build an additional manufacturing facility or contract
the production of these drugs to third-party manufacturers.

    We currently have a supply contract with ChiRex Inc. that commits us to
purchase through December 31, 2001 all of our annual requirements of those drugs
that we will market directly through our specialty sales force, provided ChiRex
meets certain pricing, supply and quality control conditions. If ChiRex
experiences delays or difficulties in producing, packaging or delivering the
drugs, market introduction and subsequent sales of the drugs that we market
through our specialty sales force could be adversely affected. Under this supply
agreement, however, we retain the right to manufacture commercial quantities of
our drugs in our Nova Scotia manufacturing plant.

    IF WE OR OUR COLLABORATION PARTNERS FAIL TO OBTAIN AN ADEQUATE LEVEL OF
REIMBURSEMENT FOR OUR FUTURE PRODUCTS OR SERVICES BY THIRD PARTY PAYORS, THERE
MAY BE NO COMMERCIALLY VIABLE MARKETS FOR OUR PRODUCTS OR SERVICES. The
availability and levels of reimbursement by governmental and other third party
payors affects the market for any pharmaceutical product or service. These third
party payors continually attempt to contain or reduce the costs of healthcare by
challenging the prices charged for medical products and services. In certain
foreign countries, including the countries of the European Union, the pricing of
prescription pharmaceuticals is subject to governmental control. We may not be
able to sell our products profitably if reimbursement is unavailable or limited
in scope or amount.

    In both the United States and certain foreign jurisdictions, there have been
a number of legislative and regulatory proposals to change the healthcare
system. Further proposals are likely. The potential for adoption of these
proposals affects or will affect our ability to raise capital, obtain additional
collaboration partners and market our products.

                                       17
<PAGE>
    We expect to experience pricing pressure for our existing products and any
future products for which marketing approval is obtained due to the trend toward
managed healthcare, the increasing influence of health maintenance organizations
and additional legislative proposals.

    WE COULD BE EXPOSED TO SIGNIFICANT LIABILITY CLAIMS THAT COULD PREVENT OR
INTERFERE WITH OUR PRODUCT COMMERCIALIZATION EFFORTS. We may be subjected to
product liability claims that arise through the testing, manufacturing,
marketing and sale of human health care products. These claims could expose us
to significant liabilities that could prevent or interfere with our product
commercialization efforts. Product liability claims could require us to spend
significant time and money in litigation or to pay significant damages. Although
we maintain product liability insurance coverage for both the clinical trials
and commercialization of our products, it is possible that we will not be able
to obtain further product liability insurance on acceptable terms, if at all,
and that our insurance coverage may not provide adequate coverage against all
potential claims.

    WE HAVE SIGNIFICANT LONG-TERM DEBT AND WE MAY NOT BE ABLE TO MAKE INTEREST
OR PRINCIPAL PAYMENTS WHEN DUE. As of September 30, 2000, our total long-term
debt was approximately $854.0 million and our stockholders' equity (deficit) was
($136.7) million. None of the 6 1/4% Debentures issued by us in February 1998,
the 7% convertible subordinated debentures due 2005 issued by us in
December 1998 nor the 5% Debentures issued by us in February 2000 restricts our
ability or our subsidiaries ability to incur additional indebtedness, including
debt that ranks senior to the 6 1/4% Debentures, the 7% Debentures and the 5%
Debentures. Additional indebtedness that we incur may rank senior to or on
parity with these debentures in certain circumstances. Our ability to satisfy
our obligations will depend upon our future performance, which is subject to any
factors, including factors beyond our control. It is possible that we will be
unable to meet our debt service requirements on any of our outstanding
Debentures. Moreover, we may be unable to repay any of our outstanding
Debentures at maturity or otherwise in accordance with the debt instruments.

    IF SUFFICIENT FUNDS TO FINANCE OUR BUSINESS ARE NOT AVAILABLE TO US WHEN
NEEDED OR ON ACCEPTABLE TERMS, THEN WE MAY BE REQUIRED TO DELAY, SCALE BACK,
ELIMINATE OR ALTER OUR STRATEGY FOR OUR PROGRAMS. We may require additional
funds for our research and product development programs, operating expenses, the
pursuit of regulatory approvals, license or acquisition opportunities and the
expansion of our production, sales and marketing capabilities. Historically, we
have satisfied our funding needs through collaboration arrangements with
corporate partners, equity or debt financing. We cannot assure you that these
funding sources will be available to us when needed in the future, or, if
available, will be on terms acceptable to us. Insufficient funds could require
us to delay, scale back or eliminate certain of our research and product
development programs or to license third parties to commercialize products or
technologies that we would otherwise develop or commercialize ourselves. Our
cash requirements may vary materially from those now planned because of factors
including:

    - increased research and development expenses;

    - patent developments;

    - licensing or acquisition opportunities;

    - relationships with collaboration partners;

    - the FDA regulatory process;

    - our capital requirements; and

    - selling and marketing expenses in connection with commercialization of
      products.

    WE EXPECT TO FACE INTENSE COMPETITION AND OUR COMPETITORS HAVE GREATER
RESOURCES AND CAPABILITIES THAN WE HAVE. DEVELOPMENTS BY OTHERS MAY RENDER OUR
PRODUCTS OR TECHNOLOGIES OBSOLETE OR NONCOMPETITIVE. We expect to encounter
intense competition in the sale of our future products. If we

                                       18
<PAGE>
are unable to compete effectively, our financial condition and results of
operations could be materially adversely affected because we may use our
financial resources to seek to differentiate ourselves from our competition and
because we may not achieve our product revenue objectives. Many of our
competitors and potential competitors, which include pharmaceutical companies,
biotechnology firms, universities and other research institutions, have
substantially greater resources, manufacturing and marketing capabilities,
research and development staff and production facilities than we have. The
fields in which we compete are subject to rapid and substantial technological
change. Our competitors may be able to respond more quickly to new or emerging
technologies or to devote greater resources to the development, manufacture and
marketing of new products and/or technologies than we can. As a result, any
products and/or technologies that we develop may become obsolete or
noncompetitive before we can recover expenses incurred in connection with their
development.

    FLUCTUATIONS IN THE DEMAND FOR PRODUCTS, THE TIMING OF COLLABORATION
ARRANGEMENTS, EXPENSES AND THE RESULTS OF OPERATIONS OF OUR SUBSIDIARIES WILL
CAUSE FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS, WHICH COULD CAUSE
VOLATILITY IN OUR STOCK PRICE. Our quarterly operating results are likely to
fluctuate significantly, which could cause our stock price to be volatile. These
fluctuations will depend on factors which include:

    - the timing of collaboration agreements for development of our
      pharmaceutical candidates and development costs for those pharmaceuticals;

    - the timing of receipt of upfront, milestone or royalty payments under
      collaboration agreements;

    - the timing of product sales and market penetration;

    - the timing of operating expenses, including selling and marketing expenses
      and the costs of expanding and maintaining a direct sales force;

    - the timing of expenses we may incur with respect to any license or
      acquisitions of products or technologies; and

    - the losses of BioSphere, a 56% owned consolidated subsidiary of Sepracor

                                    ITEM 3.
          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

MARKET RISK

    The Company is exposed to market risk from changes in interest rates and
equity prices, which could affect its future results of operations and financial
condition. These risks are described in the Company's Annual Report on
Form 10-K/A for the year ended December 31, 1999. As of September 30, 2000,
there have been no material changes to the market risks described in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1999.
Additionally, the Company does not anticipate any near-term changes in the
nature of its market risk exposures or in management's objectives and strategies
with respect to managing such exposures.

                                       19
<PAGE>
                                    PART II
                               OTHER INFORMATION

ITEMS 1 - 5.  NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    a)  Exhibits

<TABLE>
<C>    <S>
27.1   Financial Data Schedule
</TABLE>

    b)  Reports on Form 8-K

       None

                                       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.

<TABLE>
<S>                                            <C>
                                               SEPRACOR INC.

Date:  November 8, 2000                        /s/ TIMOTHY J. BARBERICH
                                               --------------------------------------------
                                               Timothy J. Barberich
                                               CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                                               (PRINCIPAL EXECUTIVE OFFICER)

Date:  November 8, 2000                        /s/ ROBERT F. SCUMACI
                                               --------------------------------------------
                                               Robert F. Scumaci
                                               SENIOR VICE PRESIDENT, OF FINANCE AND
                                               ADMINISTRATION, AND TREASURER
                                               (PRINCIPAL ACCOUNTING OFFICER)
</TABLE>

                                       21
<PAGE>
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                                   DESCRIPTION
---------------------   ------------------------------------------------------------
<C>                     <S>
        27.1            Financial Data Schedule
</TABLE>

                                       22