JP Morgan upgraded Sepracor (SEPR

) to overweight from underweight.

The drug company plans to submit a new drug application for Estorra, its insomnia treatment, by mid-February. Analyst Corey Davis thinks the news means the FDA has seen all of the data, and has at least preliminarily agreed that the data package is complete. Given the market's skepticism, Davis says he believes this is a positive outcome of a binary event, and is a step towards increasing investors' confidence.

Davis notes Sepracor's current competitors, Ambien & Sonata, should earn $1.2 billion in 2002. From the data he has seen, Davis says he thinks Estorra has the potential to be a best-in-class drug. He says the next competitor, Neurocrine Bioscience's Indiplon, is one to two years behind. He also thinks Sepracor's stock will now start to get credit for its deep pipeline. Davis has a $13 target.