Sepracor and Arrow Sign Global License and Development Agreement

Sepracor and Arrow Sign Global License and Development Agreement Covering Technology to Enhance Ciclesonide and BROVANA(R) Franchises

Agreement provides Sepracor with a global license covering development of stable suspension formulations and nebule technology in ciclesonide inhalation solution for asthma and chronic obstructive pulmonary disease (COPD)

Agreement also supports a franchise management strategy for a BROVANA(R) brand arformoterol tartrate Inhalation Solution combination with ciclesonide

Both ciclesonide-based projects are intended to expand Sepracor's inhalation solution product offerings
MARLBOROUGH, Mass.--(BUSINESS WIRE)--May 1, 2008--Sepracor Inc. (Nasdaq: SEPR) today announced it has signed a technology license and development agreement with Arrow International Limited (Arrow), a European company, for know-how and intellectual property rights related to stable sterile steroid suspension formulations as well as other applicable nebule technology for the use in developing ciclesonide, a corticosteroid, in an inhalation solution. The agreement facilitates enhanced development of Sepracor's ciclesonide stand-alone product for the treatment of asthma as well as a planned ciclesonide/ BROVANA(R) brand arformoterol tartrate Inhalation Solution combination product for the treatment of COPD, and includes Arrow's "U-Bend" packaging technology, which allows increased accuracy in dosing through a novel U-Bend ampule design.

"The identification of technology to enable the successful development of a stable sterile ciclesonide suspension for nebulization has been a priority for Sepracor for our newly attained ciclesonide franchise since only a limited number of approaches can be used," said Mark H.N. Corrigan, M.D., Executive Vice President, Research and Development at Sepracor. "Arrow and its affiliates have significant experience and success in the development of inhalation solution products, particularly with corticosteroids, and we are excited to have in-licensed this technology that should assist us in moving forward two important clinical development programs in our respiratory portfolio, which could provide a significant number of patients with COPD with greater convenience in treating their disease."

Arrow is entitled to receive $250,000 upon execution of the agreement and future payments of up to $22.5 million in support of the ciclesonide stand-alone product. In addition, Arrow is also entitled to receive $250,000 upon execution of the agreement and future milestones of up to $25.0 million in support of Sepracor's planned ciclesonide/BROVANA combination product. Arrow will also receive a low single-digit royalty on Sepracor's sales of these products.

Under this agreement, Sepracor will fully fund all product development activities and manage the development program, including all interactions with the U.S. Food and Drug Administration (FDA) and other regulatory bodies. Sepracor will oversee the development program and is responsible for all commercial activities associated with the product in the U.S. Arrow will be responsible for formulation development.

Ciclesonide is a corticosteroid with a novel activation mechanism. It is a prodrug that is site-activated by intracellular esterases following oral or nasal inhalation.

Sepracor recently launched OMNARIS(TM) brand ciclesonide Nasal Spray, which is indicated for the treatment of nasal symptoms associated with seasonal allergic rhinitis in adults and children 6 years of age and older, and with perennial allergic rhinitis in adults and adolescents 12 years of age and older. Sepracor anticipates launching ALVESCO brand ciclesonide Inhalation Aerosol in a metered-dose inhaler for the treatment of asthma during the second half of 2008.

BROVANA is a long-term, twice-daily (morning and evening), maintenance treatment of bronchoconstriction in patients with COPD, including chronic bronchitis and emphysema. BROVANA is for use by nebulization only.

About asthma and COPD

Asthma is a chronic lung disorder characterized by reversible airway obstruction and a pathologic finding of airway inflammation. According to the 2002 National Health Interview Survey conducted by the Centers for Disease Control and Prevention, nearly 31 million Americans have been diagnosed with asthma in their lifetime. It is the most common childhood illness and affects nearly 9 million children in the U.S. under the age of 18.

According to the National Center for Health Statistics, COPD is the fourth leading cause of death in the U.S., and it is estimated to be the third leading cause by the year 2020. Approximately 12 million adults in the U.S. are reported to have COPD, although approximately 24 million adults have evidence of impaired lung function, which may indicate that COPD is under-diagnosed, according to the National Heart, Lung, and Blood Institute (NHLBI). COPD is a slowly progressive disease of the airways that is characterized by a gradual loss of lung function and includes chronic bronchitis, chronic obstructive bronchitis and emphysema, or combinations of these conditions.

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(R) brand eszopiclone, XOPENEX(R) brand levalbuterol HCl Inhalation Solution, XOPENEX HFA(R) brand levalbuterol tartrate Inhalation Aerosol, BROVANA(R) brand arformoterol tartrate Inhalation Solution and OMNARIS(TM) brand ciclesonide Nasal Spray. Sepracor's corporate headquarters are located in Marlborough, Massachusetts.

Forward-Looking Statement

This news release contains forward-looking statements that involve risks and uncertainties, including statements with respect to development of a nebulized ciclesonide stand-alone product for the treatment of asthma and a nebulized ciclesonide/BROVANA combination product for the treatment of COPD; the safety, efficacy and potential benefits of any ciclesonide products developed by Sepracor; the expectation that the technology Sepracor is licensing from Arrow will assist the company in moving forward two important clinical development programs; future payments from Sepracor to Arrow; and the estimated increase in the prevalence of COPD in future years. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: Sepracor's ability to fund, and the results of, clinical trials with respect to ciclesonide products; the timing and success of submission, acceptance and approval of regulatory filings; the clinical benefits and commercial success of Sepracor's products, including any ciclesonide products it may develop; the scope and validity of the intellectual property Arrow is licensing to Sepracor; the ability of the company to attract and retain qualified personnel; and certain other factors that may affect future operating results that are detailed in Sepracor's annual report on Form 10-K for the year ended December 31, 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.

Lunesta, Xopenex, Xopenex HFA and Brovana are registered trademarks of Sepracor Inc. Omnaris is a trademark and ALVESCO is a registered trademark of Nycomed GmbH.

For a copy of this release or any recent release, visit Sepracor's web site at www.sepracor.com.

CONTACT: David P. Southwell
Chief Financial Officer
Sepracor Inc.
or
Sepracor Inc.
Jonae R. Barnes, 508-481-6700
Sr. Vice President
Investor Relations