Drug company Sepracor Inc., which posted better-than-expected third-quarter earnings and announced 300 job cuts, could be an attractive takeover target for a large pharma partner such as GlaxoSmithKline, an analyst said on Tuesday.

“We think Sepracor represents great value for a potential suitor, including GlaxoSmithKline, which is Sepracor’s European marketing partner for Lunesta,” said analyst Jon LeCroy at Natixis Bleichroeder.

“Using break-up valuation, we think Sepracor assets could be worth in excess of $40 per share to a bigger company, and our breakup valuation (50% of our target price) is approximately $45 per share,” LeCroy said.

Sepracor’s third-quarter earnings fell short of the year-ago results, but still topped analysts’ forecasts due to fewer expenses for sales and marketing and lower research and development costs. The company has struggled with increased competition to its insomnia drug Lunesta and a reduction in the level of reimbursement for its respiratory drug Xopenex.

“While the future of Xopenex revenues is uncertain, its limited remaining patent life makes it a minor contributor to Sepracor’s value and therefore should not impede an acquisition at these levels,” LeCroy said.

On a conference call with analyst, Sepracor’s CEO Adrian Adams said the company is actively seeking to license products from other companies to help bridge the gap until it brings its own new products to market, and he didn’t rule out forming a partnership to help defray development costs.

Sepracor could not be immediately reached for comment.

(Image: Sepracor product Lunesta)