Sepracor presents an interesting life-cycle extension strategy for the originating pharmaceutical company. For example, an improved version of Prozac is partnered with Eli Lilly , and an improved version of Claritin with Schering-Plough . As Sepracor continues to partner these products and as clinical data unfold during 2000, the story is likely to become increasingly validated. Profitability at that point is likely one or two years away, with dramatic EPS growth expected thereafter as the product hits its stride in the market. This group is getting more attention from investors seeking the next MedImmunes , IDECs and Immunexes .
Biotech products are truly novel treatments that usually have limited or no competition.
Patent protection exists well beyond 2010. Moreover, these products are typically immune to Medicare reimbursement concerns since they address non-Medicare populations. In the franchise area, a company's ability to leverage its operating infrastructure to sustain bottom-line growth becomes critical. Amgen is the flagship name in this category.