<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: MARCH 31, 2001
                                       OR

<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             (IRS Employer Identification No.)
    Incorporation or Organization)

           111 LOCKE DRIVE,                                   01752
      MARLBOROUGH, MASSACHUSETTS                            (zip code)
         (Address of Principal
          Executive Offices)
</TABLE>

       Registrant's telephone number, including area code: (508) 481-6700

        Securities registered pursuant to Section 12(b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $.10 PAR VALUE

                                (Title of class)

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

    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 / /

    Number of shares outstanding of the registrant's class of Common Stock as of
May 7, 2001: 77,829,615 shares.

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

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

Item 1.    Consolidated Condensed Financial Statements
           Consolidated Condensed Balance Sheets as of March 31, 2001
           and
           December 31, 2000 (Unaudited)...............................      3
           Consolidated Statements of Operations for the Three Months
           Ended March 31, 2001 and 2000 (Unaudited)...................      4
           Consolidated Statements of Cash Flows for the Three Months
           Ended March 31, 2001 and 2000 (Unaudited)...................      5
           Notes to Consolidated Interim Financial Statements..........      6

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations...................................      9

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

Part II--Other Information

Item 1.    Legal Proceedings...........................................     20

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

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

                                       2
<PAGE>
                                 SEPRACOR INC.

                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                  (UNAUDITED)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
<S>                                                           <C>         <C>
ASSETS
Current assets:
Cash and cash equivalents...................................  $ 423,530     $ 354,058
Short-term investments......................................    119,552       248,818
Accounts receivable, net....................................     14,989        14,756
Inventories.................................................      4,639         5,998
Other assets................................................      7,356         5,212
                                                              ---------     ---------
Total current assets........................................    570,066       628,842

Long-term investments.......................................     24,319        31,603
Property and equipment, net.................................     22,154        22,676
Investment in Versicor......................................     14,586        13,746
Patents, intangible assets and other assets, net............     53,948        54,091
                                                              ---------     ---------
Total assets................................................  $ 685,073     $ 750,958
                                                              =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable............................................  $  16,746     $  30,665
Accrued expenses............................................     59,919        65,560
Notes payable, current portion of long-term debt and capital
  lease obligation..........................................        143           144
Other current liabilities...................................     10,623         7,810
                                                              ---------     ---------
Total current liabilities...................................     87,431       104,179

Convertible subordinated debentures.........................    759,960       852,818
Long-term debt and capital lease obligation.................      1,030         1,098
Other long-term liabilities.................................        879           478
                                                              ---------     ---------
Total liabilities...........................................    849,300       958,573

Minority interest...........................................      5,921         7,059

Stockholders' equity (deficit):
Preferred stock.............................................         --            --
Common stock................................................      7,779         7,383
Additional paid-in capital..................................    552,445       461,195
Unearned compensation, net..................................       (172)         (189)
Accumulated deficit.........................................   (741,417)     (693,387)
Accumulated other comprehensive income (loss)...............     11,217        10,324
                                                              ---------     ---------
Total stockholders' equity (deficit)........................   (170,148)     (214,674)
                                                              ---------     ---------

Total liabilities and stockholders' equity (deficit)........  $ 685,073     $ 750,958
                                                              =========     =========
</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
                                                              -------------------------------
                                                              MARCH 31, 2001   MARCH 31, 2000
                                                              --------------   --------------
<S>                                                           <C>              <C>
Revenues:
  Product sales.............................................     $ 28,449         $ 13,866
  Royalties and other.......................................        5,491            1,267
                                                                 --------         --------
    Total revenues..........................................       33,940           15,133

Costs and expenses:
  Cost of product sold......................................        5,020            4,770
  Cost of royalties and other...............................          251              200
  Research and development..................................       49,507           32,005
  Selling, general and administrative and patent costs......       25,953           22,602
                                                                 --------         --------
    Total costs and expenses................................       80,731           59,577
                                                                 --------         --------

Loss from operations........................................      (46,791)         (44,444)

Other income (expense):
  Interest income...........................................        9,124            7,593
  Interest expense..........................................      (11,723)          (9,981)
  Other income (expense), net...............................          235           (7,442)
  Equity in investee losses.................................           --             (330)
                                                                 --------         --------
Net loss before minority interest...........................      (49,155)         (54,604)

Minority interest in subsidiary.............................        1,125              567
                                                                 --------         --------
Net loss....................................................     $(48,030)        $(54,037)

Basic and diluted net loss per common share.................     $  (0.63)        $  (0.76)

Shares used in computing basic and diluted net loss per
  common share:
  Basic and diluted.........................................       76,473           71,001
</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>
                                                                    THREE MONTHS ENDED
                                                              -------------------------------
                                                              MARCH 31, 2001   MARCH 31, 2000
                                                              --------------   --------------
<S>                                                           <C>              <C>
Cash flows from operating activities:
Net loss....................................................     $(48,030)        $(54,037)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and amortization.............................        3,332            2,546
  Minority interest in subsidiary...........................       (1,125)            (567)
  Provision for bad debt....................................           70               34
  Equity in investee losses.................................           --              330
  Other.....................................................          185              (69)
Changes in operating assets and liabilities:
  Accounts receivable.......................................         (303)          (2,668)
  Inventories...............................................        1,359            1,832
  Other current assets......................................       (2,181)             (29)
  Accounts payable..........................................      (13,919)         (11,381)
  Accrued expenses..........................................       (5,641)           5,065
  Other current liabilities.................................        3,063            1,859
                                                                 --------         --------
Net cash used in operating activities.......................      (63,190)         (57,085)
                                                                 --------         --------

Cash flows from investing activities:
  Purchases of short and long-term investments..............      (99,812)        (404,732)
  Sales and maturities of short and long-term investments...      236,442          204,615
  Additions to property and equipment.......................       (1,164)          (1,428)
  Change in other assets....................................       (3,009)            (912)
                                                                 --------         --------
Net cash provided by (used in) investing activities.........      132,457         (202,457)
                                                                 --------         --------

Cash flows from financing activities:
  Net proceeds from issuance of common stock................          293           15,309
  Net proceeds from BioSphere issuance of common stock......            9            5,785
  Proceeds from sale of 5% convertible subordinated
    debentures..............................................           --          460,000
  Costs associated with sale of 5% convertible subordinated
    debentures..............................................           --          (14,015)
  Repayments of long-term debt and capital leases...........          (69)             (52)
  Borrowings of long-term debt..............................           --              147
                                                                 --------         --------
Net cash provided by financing activities...................          233          467,174
                                                                 --------         --------

Effect of exchange rate changes on cash and cash
  equivalents...............................................          (28)             (25)
                                                                 --------         --------

Net increase in cash and cash equivalents...................       69,472          207,607
Cash and cash equivalents at beginning of period............     $354,058         $ 59,488
                                                                 --------         --------
Cash and cash equivalents at end of period..................     $423,530         $267,095
                                                                 --------         --------
Non cash activities:
  Conversion of convertible subordinated debentures to
    shares of common stock..................................     $ 92,858         $ 96,467
</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 March 31, 2001 and 2000.

    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, 2000, which are contained in Sepracor's Annual Report on Form 10-K
for the year ended December 31, 2000, 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 June 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 138, "Accounting for
Certain Derivative Instruments"--an amendment of SFAS No. 133 ("Accounting for
Certain Derivative Instruments and Hedging Activities"). This statement
establishes accounting and reporting standards for derivative instruments
embedded in other contracts (collectively referred to as "derivatives"), and for
hedging activities. The statement requires companies to recognize all
derivatives as either assets or liabilities, with the instruments measured at
fair value. The accounting for changes in fair value, gains or losses, depends
on the intended use of the derivative and its resulting designation. The Company
has adopted SFAS 138 in 2001, in accordance with SFAS 137, which deferred the
effective date of SFAS 133. The adoption of SFAS 138 did not have a material
impact on the Company's financial statements and related disclosures.

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, convertible subordinated
debentures 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 stock method.

                                       6
<PAGE>
         NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
    For the three months ended March 31, 2001 and 2000, 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 per share for the three months ended March 31,
2001 and 2000 because they would have an anti-dilutive effect due to net losses
for such periods. These securities include the following:

    Options to purchase shares of common stock:

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PRICE PER SHARE DATA)            MARCH 31, 2001    MARCH 31, 2000
-------------------------------------------           ----------------   ---------------
<S>                                                   <C>                <C>
Number of options...................................             9,947             9,374
Price range per share...............................  $2.50 to $125.44   $1.00 to $92.25
</TABLE>

    Shares of common stock for issuance upon conversion of convertible
subordinated debentures:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                             MARCH 31, 2001   MARCH 31, 2000
--------------                                             --------------   --------------
<S>                                                        <C>              <C>
6 1/4% convertible subordinated debentures due 2005......      $   --          $ 3,929
7% convertible subordinated debentures due 2005..........       4,804            4,804
5% convertible subordinated debentures due 2007..........       4,979            4,979
                                                               ------          -------
                                                               $9,783          $13,712
</TABLE>

3. INVENTORIES, NET:

    Inventories consist of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                           MARCH 31, 2001   DECEMBER 31, 2000
--------------                                           --------------   -----------------
<S>                                                      <C>              <C>
Raw materials..........................................      $1,397            $2,322
Work in progress.......................................       1,934               432
Finished goods.........................................       1,308             3,244
                                                             ------            ------
                                                             $4,639            $5,998
</TABLE>

4. CONVERTIBLE SUBORDINATED DEBENTURES:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                           MARCH 31, 2001   DECEMBER 31, 2000
--------------                                           --------------   -----------------
<S>                                                      <C>              <C>
6 1/4% convertible subordinated debentures due 2005
  (1)..................................................     $     --          $ 92,858
7% convertible subordinated debentures due 2005........      299,960           299,960
5% convertible subordinated debentures due 2007........      460,000           460,000
                                                            --------          --------
                                                            $759,960          $852,818
</TABLE>

(1) In February 2001, the Company converted $92,858,000 in principal amount of
    6 1/4% convertible subordinated debentures due 2005 into 3,920,608 shares of
    Sepracor Common Stock. As a result of the transaction, deferred finance
    costs of approximately $1,525,000 were written off against additional
    paid-in capital.

                                       7
<PAGE>
         NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

5. 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
                                                           -------------------------------
(IN THOUSANDS)                                             MARCH 31, 2001   MARCH 31, 2000
--------------                                             --------------   --------------
<S>                                                        <C>              <C>
Comprehensive income (loss):
  Net loss...............................................     $(48,030)        $(54,037)
  Cumulative translation adjustment......................          (28)             (25)
  Unrealized gain on available-for-sale securities.......          921               49
                                                              --------         --------
  Total comprehensive income (loss)......................     $(47,137)        $(54,013)
</TABLE>

6. INVESTMENT IN VERSICOR AND RELATED PARTY:

INVESTMENT IN VERSICOR:

    Sepracor considers its investment in Versicor as an available-for-sale
security and as such has marked-to-market its investment at the March 30, 2001
market price, which resulted in the recording of an unrealized gain of
approximately $840,000 as a separate component of stockholders' equity for the
three months ended March 31, 2001. Sepracor's ownership in Versicor at
March 31, 2001 was approximately 7.8%.

RELATED PARTY:

    In February 2001, HemaSure signed an asset purchase agreement with Whatman
plc. Under the terms of the agreement, Whatman agreed to purchase HemaSure's
assets, except for cash, cash equivalents and marketable securities, and assume
all of the liabilities of HemaSure, subject to certain exceptions as defined in
the agreement. Closing of the transaction is subject to certain conditions,
including the approval of HemaSure's stockholders. On April 27, 2001, HemaSure
filed a proxy statement for the special meeting of stockholders to be held on
May 21, 2001, at which time the stockholders are to vote on the proposed sale of
HemaSure's assets.

7. LITIGATION:

    Currently Sepracor is not a party to any material legal proceedings.

    On February 7, 2001, BioSphere, along with its subsidiary, BSMD
Ventures, Inc., filed a complaint for declaratory judgment in the United States
District Court for the District of Delaware against Artes Medical USA, Inc. The
complaint seeks a declaration that United States Patent No. 5,344,452, which we
refer to as the '452 patent, which Artes claims to have the right to enforce, is
invalid and not infringed by BioSphere and BSMD Ventures. The '452 patent
relates to "implant[s] based on a biocompatible solid in powder form, in
particular a plastic". In addition, Artes Medical USA filed a complaint against
BioSphere in the United States District Court for the Central District of
California (Los Angeles). The complaint claims that BioSphere is liable for
infringement, inducement of infringement and contributory infringement of the
'452 patent. Artes seeks monetary damages as compensation for the alleged
infringement and a permanent injunction against the alleged infringing activity.
Artes Medical apparently asserts that all of BioSphere's microsphere-related
products, including its Embosphere Microspheres, HepaSphere SAP Microspheres and
MatrX Microspheres infringe the '452 patent. BioSphere believes Artes' claims
are without merit and BioSphere intends to vigorously defend these claims.

                                       8
<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 that develops and
commercializes proprietary pharmaceutical products for the primary care and
specialty markets. The Company develops and markets these drugs by leveraging
its expertise in chiral chemistry and pharmacology with its experience in
conducting clinical trials and seeking regulatory approvals for new drugs.
Sepracor's Improved Chemical Entities ("ICE-TM-") pharmaceutical development
program has yielded an extensive portfolio of drug candidates intended to treat
a broad range of indications in respiratory care, urology, gastroenterology,
psychiatry and neurology. The Company is also broadening its development efforts
in new drug discovery and in the development of new drug candidates.

    The consolidated financial statements include the accounts of Sepracor Inc.
("Sepracor" or the "Company") and its majority and wholly-owned subsidiaries,
including BioSphere Medical Inc. ("BioSphere", formerly BioSepra Inc., or
"BioSepra") and Sepracor Canada Limited. The consolidated financial statements
also include equity ownership in Sepracor's related party HemaSure Inc.
("HemaSure") and an investment in Versicor Inc. ("Versicor") (a subsidiary from
1995 to December 1997).

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

    In May 2001, the Company announced that the U.S. Food and Drug
Administration ("FDA") had accepted the Company's New Drug Application ("NDA")
for SOLTARA-TM- brand norastemizole 30 mg capsules for the treatment of allergic
rhinitis, which the Company submitted in March 2001.

    In April 2001, the Company was notified by Janssen Pharmaceutica, N.V., that
during the week of April 23, 2001, clinical investigators were to be informed
that two Phase II trials to evaluate the efficacy and safety of ticalopride
((+)-norcisapride) in subjects with symptoms of gastroesophageal reflux disease
(GERD) or gastroparesis are being suspended pending further analysis of a small
number of adverse events reported in GERD and diabetic patients. Although it is
unknown if these events are related to the drug, Janssen has decided that it is
prudent to suspend the trials to better understand the observations made.
Janssen has stated that it has taken steps to preserve the scientific integrity
in order to reinitiate the trials and facilitate regulatory acceptance of the
results. Extensive preclinical and Phase I data provided evidence that the drug
is safe at doses used in this study.

    In January 2001, the Company announced that it would redeem on February 21,
2001 the $92,858,000 in principal amount of 6 1/4% convertible subordinated
debentures due 2005 (the "6 1/4 Debentures) that remained outstanding. On
February 20, 2001, prior to the redemption, all outstanding 6 1/4% Debentures
were converted. As a result of the conversion, 3,920,608 shares of Sepracor
Common Stock were issued and deferred finance costs of approximately $1,525,000
were written off against additional paid-in capital.

    In January 2001, Sepracor signed a lease to occupy approximately 192,600
square feet of office and research and development space in a facility to be
built in Marlborough, Massachusetts. The lease has a term of 15 years, and will
begin on the occupancy date contingent upon the completion of the building,
expected to be June 2002. In addition, Sepracor has an option to lease two
additional buildings, totaling approximately 232,400 square feet, which may be
constructed on the same site in the

                                       9
<PAGE>
future. Sepracor is financing the construction of the first building through two
interest bearing, secured loans totaling up to approximately $27,000,000, loaned
by Sepracor to the developer of the site. Sepracor will have first right to
purchase the entire property from the developer beginning in June 2002 and
extending through January 2004.

    In February 2001, HemaSure signed an asset purchase agreement with Whatman
plc. Under the terms of the agreement, Whatman agreed to purchase all of
HemaSure's assets, except for cash, cash equivalents and marketable securities,
and assume all of the liabilities of HemaSure, subject to certain exceptions as
defined in the agreement. Closing of the transaction is subject to certain
conditions, including the approval of HemaSure's stockholders. On April 27,
2001, HemaSure filed a proxy statement for the special meeting of stockholders
to be held on May 21, 2001, at which time the stockholders are to vote on the
proposed sale of HemaSure's assets.

    For the remainder of 2001, the Company expects that it will incur increasing
operating expenses, primarily due to expansion of research and development
activities relating to development of the Company's portfolio of pharmaceuticals
and drug candidates, and due to increasing sales and marketing and general and
administrative efforts required to advance its drug development programs to
commercialization.

THREE MONTH PERIODS ENDED MARCH 31, 2001 AND 2000

    Product revenues were $28,449,000 and $13,866,000 for the three months ended
March 31, 2001 and 2000, respectively. The increase for the three month period
ended March 31, 2001 is due primarily to increased sales of XOPENEX.

    Royalties and other revenues were $5,491,000 and $1,267,000 for the three
months ended March 31, 2001 and 2000, respectively. The increase in royalties
and other revenues is due primarily to the royalty agreement with Aventis
(formerly Hoechst Marion Roussel, Inc.) under which Sepracor currently receives
royalties on U.S. and non-U.S. sales of ALLEGRA-Registered Trademark- in
countries where Sepracor holds issued patents on terfenadine carboxylate (also
known as fexofenadine). Sepracor began earning royalties on sales of ALLEGRA in
the U.S. and Canada in the first quarter of 2001. Prior to 2001, Sepracor was
earning royalties in Europe, Japan and Australia.

    Cost of product sold, as a percentage of product sales, was approximately
18% and 34% for the three months ended March 31, 2001 and 2000, respectively.
The decrease was due to the inclusion in the three months ended March 31, 2000
of costs of approximately $2,766,000, or 20% of product sales, related to a
third party manufacturing issue, partially offset by an increase for the three
months ended March 31, 2001 in cost of product sold due to increased
manufacturing costs.

    Research and development expenses were $49,507,000 and $32,005,000 for the
three months ended March 31, 2001 and 2000, respectively. The increase for the
three months ended March 31, 2001 is primarily due to Phase III norasetemizole
clinical study costs and costs related to the submission of an NDA for SOLTARA
brand norastemizole, and Phase III clinical study costs relating to
(S)-zopiclone.

    Selling, general and administrative and patent expenses were $25,953,000 and
$22,602,000 for the three months ended March 31, 2001 and 2000, respectively.
The increase for the three months ended March 31, 2001 is primarily due to
increased selling expenses as a result of the increase in XOPENEX revenues.

    The net of interest income, interest (expense) and other income (expense)
was ($2,364,000) and ($9,830,000) for the three months ended March 31, 2001 and
2000, respectively. The decrease in the net expense for the three month period
ended March 31, 2001 is primarily due to ($7,497,000) of other expense in the
first quarter of 2000, relating to inducements and other costs for the
conversion of $96,424,000 of 6 1/4% Debentures.

    Equity in investee losses was $0 and ($330,000) for the three months ended
March 31, 2001 and 2000, respectively. The loss in the three month period ended
March 31, 2000 related to Sepracor's investment in HemaSure which was written
down to zero during the third quarter of fiscal 2000.

                                       10
<PAGE>
    Minority interest in subsidiary resulted in a decrease to consolidated net
loss of $1,125,000 and $567,000 for the three months ended March 31, 2001 and
2000, respectively. The fluctuation in minority interest resulted from the
minority interest in BioSphere increasing from approximately 42% to 45% combined
with the recording by BioSphere of a larger net loss in the three month period
ended March 31, 2001 than in the three month period ended March 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents and short and long-term investments totaled
$567,401,000 at March 31, 2001, compared to $634,479,000 at December 31, 2000.

    The net cash used in operating activities for the three months ended
March 31, 2001 was $63,190,000. The net cash used in operating activities
includes a net loss of $48,030,000 adjusted by non-cash charges of $3,587,000.
These charges were offset by the minority interest in subsidiary's net loss of
$1,125,000. Accounts receivable increased by $303,000 due to increased sales of
XOPENEX in March, 2001. Inventory decreased by $1,359,000 primarily due to
increased demand for XOPENEX product. Other current assets increased by
$2,181,000 primarily due to increased royalty receivables from Aventis related
to ALLEGRA. Accounts payable decreased by $13,919,000 due to the timing of cash
disbursements. Accrued expenses decreased by $5,641,000 due primarily to reduced
accrued interest on the convertible subordinated debentures and research and
development expenses, partially offset by additional accrued sales and marketing
expenses. Other current liabilities increased by $3,063,000 due to additional
accruals for product revenue rebates and return reserves as a result of
increased XOPENEX revenues.

    The net cash provided by investing activities for the three months ended
March 31, 2001 was $132,457,000. Cash resulted from net sales and maturities of
short and long-term investments of $136,630,000. The Company made purchases of
property and equipment of $1,164,000, and other assets increased by $3,009,000
primarily due to the loan receivable of $2,663,000 from the developer of the
property for the construction financing of the new building to be leased by
Sepracor upon its completion.

    The net cash provided by financing activities for the three months ended
March 31, 2001 was $233,000. The Company received approximately $302,000 in
proceeds from the issuance of common stock offset by capital lease payments of
$69,000.

    In January 2001, the Company announced that it would redeem on February 21,
2001 the $92,858,000 in principal amount of 6 1/4% Debentures that remained
outstanding. On February 20, 2001, prior to the redemption, all outstanding
6 1/4% Debentures were converted. As a result of the conversion, 3,920,608
shares of Sepracor Common Stock were issued and deferred finance costs of
approximately $1,525,000 were written off against additional paid-in capital.

    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 through 2001. 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 alliances and licensing arrangements and the progress of the Company's
development efforts and the development efforts of its strategic partners.

                                       11
<PAGE>
FACTORS AFFECTING FUTURE OPERATING RESULTS

    Certain of the information contained in this Quarterly Report on Form 10-Q,
including information with respect to the safety, efficacy and potential
benefits of the Company's drugs under development and the scope of patent
protection with respect to these products and information with respect to the
other plans and strategies for the Company's business and the business of the
subsidiaries and certain affiliates of the Company, consists of forward-looking
statements. The forward-looking statements contained in this Quarterly Report on
Form 10-Q represent our expectations as of the date of this Quarterly Report on
Form 10-Q. Subsequent events will cause our expectations to change. However,
while we may elect to update these forward-looking statements, we specifically
disclaim any intention or obligation to do so. Important factors that could
cause actual results to differ materially from the forward-looking statements
include the following:

    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 $48.0 million for the three months ended March 31, 2001,
$204.0 million for the year ended December 31, 2000 and $183.1 million for the
year ended December 31, 1999. We expect to continue to incur significant
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 our products and products under development by us and
our development partners may have a material adverse effect on our business. In
October 2000, we announced that Lilly had notified us that it was terminating
the Lilly 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. We are entitled to receive royalties on sales, if any, of
desloratadine under the DCL Agreement with Schering. In February 2001, Schering
announced that it had been advised by the U.S. Food and Drug Administration,
which we refer to as FDA, that current good manufacturing practices deficiencies
cited by the FDA would need to be resolved prior to FDA approval of
desloratadine. We are entitled to receive royalties on sales, if any, of
ticalopride under the Ticalopride Agreement with Janssen. In April 2001, Janssen
announced that it had suspended clinical trials of ticalopride pending further
analysis of a small number of adverse events reported in patients. We do not
know if or when desloratadine or ticalopride may be approved, or the timing of
commercialization of these compounds. In addition, if other collaborative
development arrangements are terminated or commercialization efforts under those
agreements are delayed or are unsuccessful, then successful commercialization of
our products under development may be delayed or terminated, which could have a
material adverse effect on our business.

    In May 2001, an advisory panel to the FDA, recommended that the FDA allow
certain popular allergy medications to be sold without a prescription. The FDA
may or may not accept the recommendation of the advisory panel. If the FDA
approves the sale of these allergy medications without prescription, our
business may be adversely affected [because royalty revenues may be reduced and
because we may not be able to sell or market SOLTARA brand norastemizole in
accordance with our current plan].

    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

                                       12
<PAGE>
SUCCESSFULLY.  We develop and commercialize proprietary pharmaceutical products
for the primary care and specialty markets. Most of our drug candidates 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 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 are evolving. Any
patents we have obtained, or obtain in the future, may be challenged,
invalidated or circumvented. Moreover, the United States Patent and Trademark
Office, which we refer to as 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 drug will largely depend upon
our ability to obtain and maintain 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 these third-party
patents expire. 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 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. Any unanticipated preclinical and clinical studies we are

                                       13
<PAGE>
required to undertake could result in a significant increase in the funds we
will require to advance our products to commercialization. In addition, the
failure by us or our collaborative development partners to obtain regulatory
approval on a timely basis or, the attempt by us or our collaborative
development partners to receive regulatory approval to achieve labeling
objectives, could adversely affect the timing of the commercial introduction of,
or our ability to market and sell, our products. We are entitled to receive
royalties on sales, if any, of desloratadine under the DCL Agreement with
Schering. In February 2001, Schering announced that it had been advised by the
FDA that current good manufacturing practices deficiencies cited by the FDA
would need to be resolved prior to FDA approval of desloratadine. We do not know
if or when the product may be approved, or the timing of commercialization of
desloratadine.

    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 take longer than we anticipate and 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.

    THE DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS COULD BE DELAYED OR
TERMINATED IF OUR COLLABORATION PARTNERS TERMINATE, SUSPEND ACTIVITY 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 development and commercialization
efforts of our collaboration partners, which we cannot control. If any of our
collaboration partners does not devote sufficient time and resources to or
suspend activity under its collaboration arrangement with us, we may not realize
the potential commercial benefits of the arrangement, and our results of
operations may be adversely affected. In addition, if regulatory approval of any
product candidate under development by our collaboration partners is delayed or
limited, we may not realize or may be delayed in realizing the potential
commercial benefits of the arrangement. 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 failure or
inability by us to perform, or any breach by us in our performance of, our
obligations under a collaboration agreement could reduce or extinguish the
benefits to which we are otherwise entitled under the agreement. 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, we may lose
technology rights and milestone or royalty payments from collaboration 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, 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. We are entitled to receive royalties on
sales, if any, of ticalopride under the Ticalopride Agreement with Janssen, in
countries where we have issued patents covering Janssen's

                                       14
<PAGE>
intended use. In April 2001, Janssen announced that it had suspended clinical
trials of ticalopride pending further analysis of a small number of adverse
events reported in patients.

    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 these product candidates. We may not be able to enter into
collaboration agreements and the terms of the collaboration agreements, if any,
may not be favorable to us. The inability to enter into collaboration agreements
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. WE ALSO RELY ON THIRD PARTIES
FOR SALES OF OUR PRODUCTS. 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 sales forces or through other arrangements,
including co-promotion arrangements. We have established a direct sales force to
market XOPENEX. We also expect to use a direct sales force to market SOLTARA
brand norastemizole, if approved. 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. Our limited experience in developing,
maintaining and expanding a direct sales force may restrict our success in
commercializing our products. We expect to incur significant expense in
expanding our direct sales force. With respect to products under development, we
may incur significant costs in developing a sales force before the product has
been approved for marketing.

    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
depend in large part on a third-party contract sales organization for sales of
XOPENEX and we may contract with third-party contract sales organizations in the
future for other products if successfully developed, including SOLTARA brand
norastemizole. 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
and/or quality of service provided by these third parties is not adequate, our
revenues would be adversely affected.

                                       15
<PAGE>
    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. The failure by us, our collaborative development partners and
third-party manufacturers to maintain current good manufacturing practices
compliance and/or our failure to 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.

    OUR RELIANCE ON THIRD-PARTY MANUFACTURERS COULD ADVERSELY AFFECT OUR ABILITY
TO MEET OUR CUSTOMERS' DEMANDS.  Automatic Liquid Packaging, a division of
Cardinal Health, Inc., is currently the sole finished goods manufacturer of our
product XOPENEX. If Automatic Liquid Packaging experiences delays or
difficulties in producing, packaging or delivering XOPENEX, we could be unable
to meet our customers' demands for XOPENEX, which could lead to customer
dissatisfaction and damage to our reputation. Furthermore, if we are required to
change manufacturers, we will be required to verify that the new manufacturer
maintains facilities and procedures that comply with quality standards and with
all applicable regulations and guidelines. The delays associated with the
verification of a new manufacturer could negatively affect our ability to
produce XOPENEX in a timely manner or within budget.

    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 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 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 amounts 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. We expect to experience pricing
pressure for our existing products and any future products for which marketing
approval is obtained due to the trend

                                       16
<PAGE>
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 March 31, 2001, our total long-term debt
was approximately $761.0 million and our stockholders' equity (deficit) was
($170.1) million. Neither the 7% convertible subordinated debentures due 2005
nor the 5% convertible subordinated debentures due 2007 restricts our ability or
our subsidiaries ability to incur additional indebtedness, including debt that
ranks senior to the 7% debentures or 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 many factors, including factors beyond
our control. The conversion price for the 7% debentures is $62.4375 and the
conversion price for the 5% debentures is $92.38. If the market price for our
common stock does not exceed the conversion price the holders of the debentures
may not convert their debentures into common stock.   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 and equity and debt financings. These funding sources may not
be available to us when needed in the future, and, if available, they may not 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, marketing and manufacturing expenses in connection with
      commercialization of products.

                                       17
<PAGE>
    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 current and future products. If we 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 AND REGULATORY APPROVAL, ANY TERMINATION OF DEVELOPMENT EFFORTS,
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 receipt of upfront, milestone or royalty payments under
      collaboration agreements;

    - the success and timing of regulatory approvals for products developed by
      us or our collaboration partners or for collaborative agreements;

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

    - the termination of development efforts of any product under development or
      any collaboration agreement;

    - 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 55% owned consolidated subsidiary of Sepracor.

    OUR STOCK PRICE COULD BE HIGHLY VOLATILE, WHICH COULD CAUSE YOU TO LOSE PART
OR ALL OF YOUR INVESTMENT.  The market price of our common stock, like that of
the common stock of many other pharmaceutical and biotechnology companies, may
be highly volatile. In addition, the stock market has experienced extreme price
and volume fluctuations. This volatility has significantly affected the market
prices of securities of many pharmaceutical and biotechnology companies for
reasons frequently unrelated to or disproportionate to the operating performance
of the specific companies. These broad market fluctuations may adversely affect
the market price of our common stock. Prices for our common stock will be
determined in the market place and may be influenced by many factors, including
variations in our financial results and investors' perceptions of us, changes in
recommendations by securities analysts as well as their perceptions of general
economic, industry and market conditions.

                                       18
<PAGE>
                                    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 for the year ended December 31, 2000. As of May 14, 2001, there have
been no material changes to the market risks described in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000. 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. LEGAL PROCEEDINGS

    Currently Sepracor is not a party to any material legal proceedings.

    On February 7, 2001, BioSphere, along with its subsidiary, BSMD
Ventures, Inc., filed a complaint for declaratory judgment in the United States
District Court for the District of Delaware against Artes Medical USA, Inc. The
complaint seeks a declaration that United States Patent No. 5,344,452, which we
refer to as the '452 patent, which Artes claims to have the right to enforce, is
invalid and not infringed by BioSphere and BSMD Ventures. The '452 patent
relates to "implant[s] based on a biocompatible solid in powder form, in
particular a plastic". In addition, Artes Medical USA filed a complaint against
BioSphere in the United States District Court for the Central District of
California (Los Angeles). The complaint claims that BioSphere is liable for
infringement, inducement of infringement, and contributory infringement of the
'452 patent. Artes seeks monetary damages as compensation for the alleged
infringement and a permanent injunction against the alleged infringing activity.
Artes Medical apparently asserts that all of BioSphere's microsphere-related
products, including its Embosphere Microspheres, HepaSphere SAP Microspheres and
MatrX Microspheres infringe the '452 patent. BioSphere believes Artes' claims
are without merit and BioSphere intends to vigorously defend these claims.

ITEMS 2 - 5. NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<C>        <S>        <C>
       a)  Exhibits

           10.1       Lease, dated as of January 30, 2001, by and between
                      Waterford Park, LLC and the Registrant.
           10.2       Loan Agreement (First Lien), dated as of January 30, 2001,
                      by and between Waterford Park, LLC and the Registrant.
           10.3       Leasehold Mortgage and Security Agreement, dated as of
                      January 30, 2001, from Waterford Park, LLC to the
                      Registrant.
           10.4       Note dated January 30, 2001 by Waterford Park, LLC in favor
                      of the Registrant in the principal amount of $20,860,000.
           10.5       Loan Agreement (Second Lien), dated as of January 30, 2001,
                      between Waterford Park, LLC and the Registrant.
           10.6       Leasehold Mortgage and Security Agreement (Second Mortgage),
                      dated as of January 30, 2001, from Waterford Park, LLC to
                      the Registrant.
           10.7       Note dated January 30, 2001 by Waterford Park, LLC in favor
                      of the Registrant in the principal amount of $6,458,597.

       b)  Reports on Form 8-K

           1.         Current Report on Form 8-K filed with the Securities and
                      Exchange Commission on February 27, 2001 announcing the
                      conversion of all outstanding 6 1/4% convertible
                      subordinated debentures.
           2.         Current Report on Form 8-K filed with the Securities and
                      Exchange Commission on March 15, 2001 filing a press release
                      announcing the Registrant's submission of a new drug
                      application for SOLTARA-TM-.
</TABLE>

                                       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>  <C>
                                                       SEPRACOR INC.
Date: May 14, 2001

                                                       By:           /s/ TIMOTHY J. BARBERICH
                                                            -----------------------------------------
                                                                       Timothy J. Barberich
                                                               CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                                                                  (PRINCIPAL EXECUTIVE OFFICER)

Date: May 14, 2001

                                                       By:            /s/ ROBERT F. SCUMACI
                                                            -----------------------------------------
                                                                        Robert F. Scumaci
                                                              EXECUTIVE VICE PRESIDENT, FINANCE AND
                                                                  ADMINISTRATION, AND TREASURER
                                                                  (PRINCIPAL ACCOUNTING OFFICER)
</TABLE>

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