Dainippon Sumitomo Pharma Co, Ltd (DSP) and Sepracor Inc have entered into a definitive agreement pursuant to which DSP will make a cash tender offer for all of Sepracor's common shares and subsequently acquire any remaining Sepracor shares through a cash merger.

Under the terms of the Agreement, DSP intends to acquire all of the outstanding common shares of Sepracor through a tender offer to be made by DSP's wholly-owned US subsidiary for a total purchase price of approximately $2.6 billion ($23.00 per share). The offer price approximately represents a 27.6 per cent premium over the closing price of Sepracor's common stock on September 1, 2009. Upon completion of the acquisition, Sepracor will become a wholly owned subsidiary of Dainippon Sumitomo Pharma America Holdings, Inc. a holding company wholly owned by DSP, and will continue its operations based mainly in Marlborough, Massachusetts.

The Boards of Directors of DSP and Sepracor have each unanimously approved this transaction. This acquisition is subject to expiration or termination of any waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and satisfaction or waiver of other customary conditions. Objectives of the Sepracor Acquisition DSP outlined in its mid-term business plan its vision to 'strengthen our business foundation as a first step in becoming a global corporation'. As part of the efforts to realize this vision, DSP has been focusing on the global development of the antipsychotic drug, Lurasidone, as well as considering the commercialization of Lurasidone in the US through a US-based sales and marketing organization.

Sepracor is a pharmaceutical company that specializes primarily in the areas of central nervous system (CNS) and respiratory disorders. In the US, Sepracor owns several highly regarded and well-recognized products, including Lunesta (eszopiclone) for the treatment of insomnia. In addition, it has a fully integrated commercial organization that includes a strong sales network covering primary care physicians and specialists. DSP intends to significantly enhance its sales and marketing capability in the US through the acquisition, which should enable DSP to accelerate its penetration into the US market and increase the potential to maximize product value of Lurasidone in this market. The acquisition will also increase DSP's overseas revenue contribution to approximately 40 per cent and immediately enhance DSP's clinical pipeline in the US. DSP intends to continue its efforts to improve its presence in the US market and to further expand its business in the US and Canada.

Masayo Tada, president of DSP, noted, "Sepracor has pursued growth through development of its unique pipeline and introduction of innovative pharmaceutical products to the market, a strategy that fits perfectly with our management philosophy. We expect that Sepracor will become a 'Center of Excellence' for DSP in the US, and will make a significant contribution to DSP both as a commercialization infrastructure for our self-developed products and as a strategically important base for business development."

Adrian Adams, president and chief executive officer of Sepracor, noted, "DSP is a leading Japanese pharmaceutical company with a distinguished history and an established, strong track record of operational and financial performance based on a number of successful product launches. Both companies share a common vision, values and strategy, and the transaction should enable Sepracor to enhance its product pipeline and enjoy sustainable growth well into the future. Our well-established management team is pleased to be a part of the integration and building of this very exciting business combination, a combination that we believe is not only in the best interest of our shareholders, but also potentially delivers exciting opportunities to our talented employees now and in the future."

Nomura Securities Co, Ltd. and Thomas Weisel Partners LLC are serving as joint financial advisors to DSP in connection with the acquisition, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to DSP.