PRESS RELEASE: Sepracor Signs Sleep Drug Partnership with GlaxoSmithKline; Sepracor to Receive Up to $155m

Sepracor Signs Sleep Drug Partnership with GlaxoSmithKline; Sepracor to Receive Up to $155 Million

MARLBOROUGH, Mass. & LONDON -- Sepracor and GlaxoSmithKline (GSK) today announced an agreement for the commercialization of Sepracor's eszopiclone product for all markets worldwide (excluding the U.S., Canada, Mexico and Japan). Sepracor's eszopiclone product will be marketed by GSK in these areas as LUNIVIA for the treatment of insomnia. Under the agreement, Sepracor is entitled to receive an initial payment of $20 million plus subsequent payments upon accomplishment of various milestones. If all milestones are met, GSK will be obligated to pay Sepracor $155 million in aggregate license and milestone payments. In addition, Sepracor will receive double-digit royalties that escalate upon increased product sales and compensation for supplying the product to GSK.

LUNIVIA is currently under EMEA review for marketing approval under the Centralized Procedure. This procedure provides for the EMEA to conduct a single, coordinated scientific evaluation on behalf of all EU member states, using experts from national regulatory authorities as lead reviewers. Approval of the MAA would authorize the marketing of LUNIVIA for insomnia in as many as 27 EU member countries, subject to national pricing and reimbursement approvals.

"GSK is one of the world's largest pharmaceutical companies, and we are delighted to have established this alliance with such a renowned organization that has a strong presence in the EU and other global markets," said Adrian Adams, President and Chief Executive Officer of Sepracor. GSK's knowledge, experience and success in the central nervous system area, together with its broad commercialization infrastructure, provide an optimal launch platform from which to expand our LUNIVIA franchise to European and additional international markets. This milestone event is another important step in Sepracor's overall worldwide strategy to fully leverage our product franchises, drive enhanced research and development productivity and successfully pursue aligned and value-enhancing corporate development and licensing initiatives."

Andrew Witty, President of Pharmaceuticals Europe, GSK, said: "When untreated, insomnia can have serious health and social consequences. Upon approval, LUNIVIA will be an additional option for people suffering from insomnia - it has a proven benefit in chronic insomnia in helping sufferers get to sleep and stay asleep. We're pleased to collaborate with Sepracor to provide this new treatment choice for patients in Europe and elsewhere."

As with any insomnia medication, patients and prescribers need to be aware of the possibilities of drowsiness and/or coordination impairment as a result of use of these medicines. The MAA submission contained results from 122 preclinical and 35 clinical studies of eszopiclone. These studies included more than 5,500 adult and older adult (greater than 65 years of age) subjects, including patients with transient or chronic insomnia. In addition to the studies of eszopiclone in patients with insomnia and co-existing conditions, two six-month, placebo-controlled studies in primary insomnia as well as two driving studies showing no effect on next-day driving in healthy subjects or subjects with insomnia were included as part of this submission.

LUNESTA has been commercially available in the U.S. since April 2005 and had product revenues of approximately $566.8 million in 2006. In 2006, the sedative hypnotic market in Europe was worth approximately $500 million. In the five largest European markets, an estimated 45 million people suffer from insomnia, but the current prescription treatment rate is only approximately 24% of this population.

About Sepracor

Sepracor Inc. is a research-based pharmaceutical company dedicated to treating and preventing human disease by discovering, developing and commercializing innovative pharmaceutical products that are directed toward serving unmet medical needs. Sepracor's drug development program has yielded a portfolio of pharmaceutical products and candidates with a focus on respiratory and central nervous system disorders. Currently marketed products include LUNESTA brand eszopiclone, XOPENEX® brand levalbuterol HCl Inhalation Solution, XOPENEX HFA® brand levalbuterol tartrate Inhalation Aerosol and BROVANA(TM) brand arformoterol tartrate Inhalation Solution. Sepracor's corporate headquarters are located in Marlborough, Massachusetts.

About GlaxoSmithKline

GlaxoSmithKline is one of the world's leading research-based pharmaceutical and healthcare companies and is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For more information, visit GlaxoSmithKline on the World Wide Web at www.gsk.com.

Sepracor Forward-Looking Statement

This news release contains forward-looking statements that involve risks and uncertainties, including statements with respect to the safety, efficacy and potential benefits of LUNESTA and/or LUNIVIA; timing and success of regulatory events in Europe and in the territories covered by the agreement with GSK, including the potential for approval in the EU during the second half of 2008; the manufacturing and supply of LUNIVIA by Sepracor; the market for insomnia products in Europe and elsewhere; and future payments by GSK to Sepracor. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: unexpected delays in the development and commercialization of eszopiclone for the markets outside of the U.S., Canada, Mexico and Japan; the success of Sepracor's alliance with GSK; the performance of GSK and its licensees and collaboration partners; the clinical benefits and safety of eszopiclone; approvals, labeling requirements or limitations of regulatory bodies worldwide; changes in the use and/or label of LUNESTA in the U.S. or elsewhere; inability to, or restrictions in, supplying LUNESTA and/or LUNIVIA; the ability to obtain favorable reimbursement approval levels and pricing in the EU and elsewhere, or obtain reimbursement approval at all; the scope of Sepracor's patents, trademarks and the patents of others and the success of challenges by others of Sepracor's patents or trademarks; and certain other factors that may affect future operating results that are detailed in the company's quarterly report on Form 10-Q for the quarter ended June 30, 2007 filed with the Securities and Exchange Commission.

In addition, the statements in this press release represent Sepracor's expectations and beliefs as of the date of this press release. Sepracor anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Sepracor may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Sepracor's expectations or beliefs as of any date subsequent to the date of this press release.

GlaxoSmithKline Forward-Looking Statements

Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect GSK's operations are described under 'Risk Factors' in the Business and Prospects in GSK's Annual Report on Form 20-F for 2006.

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