877357--3/16/2006--SEPRACOR_INC

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Risks Related to Our Financial Results We have a history of net losses and we may not be able to generate revenues sufficient to achieve and maintain profitability on a quarterly and annual basis. Almost all of our revenues are derived from sales of LUNESTA and XOPENEX Inhalation Solution and our future success depends on the continued commercial success of these products. We have significant long-term debt and we may not be able to make principal payments when due. If we exchange debt for shares of common stock, there will be additional dilution to holders of our common stock. If the estimates we make, or the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may vary from these reflected in our projections and accruals. 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. Several class action lawsuits have been filed against us which may result in litigation that is costly to defend and the outcome of which is uncertain and may harm our business. Fluctuations in the demand for products, the success and timing of collaboration arrangements and regulatory approval, any termination of development efforts will cause fluctuations in our quarterly operating results, which could cause volatility in our stock price. We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders' ability to sell their shares for a premium in a change of control transaction. The price of our common stock historically has been volatile, which could cause you to lose part or all of your investment. We face intense competition and our competitors have greater resources and capabilities than we have. We may be unable to commercialize products for which we receive approval from the FDA. We sell our products primarily through a direct sales force and if we are not successful in attracting and retaining qualified sales personnel, we may not be successful in commercializing our products. If we or our third-party manufacturers do not comply with current Good Manufacturing Practices regulations, then the FDA could refuse to approve marketing applications or force us to recall or withdraw our products. We could be exposed to significant liability claims that could prevent or interfere with our product commercialization efforts. Risks Related to the Regulatory Environment If our products do not receive government approval, then we will not be able to commercialize them. If we fail to successfully develop and receive regulatory approval for arformoterol or other product candidates, we will be unable to commercialize the product candidates and future sales and earnings growth will be substantially hampered. If the FDA delays or denies approval of any NDA that we file in the future, then commercialization of the product subject to the NDA will be delayed or terminated, which could have a material adverse effect on our business. Our sales depend on payment and reimbursement from third-party payors, and a reduction in payment rate or reimbursement could result in decreased use or sales of our products. We will spend considerable time and money complying with Federal and state laws and regulations and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties. If our Medicaid rebate program practices are investigated, the costs could be substantial and could divert the attention of management. The approval of sale of certain medications without a prescription may adversely affect our business. Risks Related to Our Intellectual Property If we fail to adequately protect or enforce our intellectual property rights, then we could lose revenue under our licensing agreements or lose sales to generic copies of our products. If we face a claim of intellectual property infringement by a third party, then we could be liable for significant damages or be prevented from commercializing our products. Risks Related to Our Dependence on Third Parties If any third-party collaborator is not successful in development of our product candidates, we may not realize the potential commercial benefits of the arrangement and our results of operations could be adversely affected. The royalties we receive under licensing arrangements could be delayed, reduced or terminated if our licensing partners terminate, or fail to perform their obligations under, their agreements with us, or if our licensing partners are unsuccessful in their sales efforts. We rely on third-party manufacturers, and this reliance could adversely affect our ability to meet our customers' demands. Risks Related to Growth of Our Business If we fail to acquire and develop additional product candidates or approved products, our ability to grow will be impaired. We may undertake strategic acquisitions in the future and any difficulties from integrating such acquisitions could adversely affect our stock price, operating results and results of operations. Development and commercialization of our product candidates could be delayed or terminated if we are unable to enter into collaboration agreements in the future or if any future collaboration agreement is subject to lengthy government review.

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877357--3/16/2006--SEPRACOR_INC_/DE/