NEW YORK (CNNMoney.com) - Pfizer and Schering-Plough could easily snap up the smaller drugmaker Sepracor but industry analysts say risks to its two products would limit any potential gains.

Sepracor (up $1.38 to $55.53, Charts) stock treaded water Tuesday after soaring 9 percent Monday on a news report said that Pfizer (down $0.11 to $22.95, Charts) and Schering-Plough (down $0.08 to $18.97, Charts) were considering a takeover.

"A rumor is a rumor, and whenever these rumors surface, a stock does well," said Dallas Webb, analyst for Stanford Financial Group. Webb noted there was nothing new about reports that Sepracor could be up for sale.

But the fact remains that big drugmakers, feeling growing increasing pressure to bolster their pipelines and drug portfolios, could be on the prowl after an earlier round of consolidation in the industry.

Sepracor's sleeping pill Lunesta could look especially attractive to Pfizer, since its experimental sleeping pill indiplon garnered only mixed approval from the Food and Drug Administration last month.

Pfizer, the world's biggest drugmaker with a stock market worth of $168 billion, could easily swallow Sepracor with its market cap of less than $6 billion. Schering-Plough could also absorb the smaller company, industry analysts said.

Spokesmen for Pfizer and Schering-Plough declined to comment and a spokeswoman for Sepracor did not immediately return phone messages.

But analysts said the potential bidders had better take a good hard look at Sepracor's biggest products before signing on the dotted line.

Aaron Reames, analyst for A.G. Edwards, noting Sepracor has been subject of buyout talk several times in recent years, said the latest talk may amount to nothing or could be the real thing.

But any buyers should consider that Sepracor's biggest selling drug, Xonepex, an inhalable asthma medicine with $440 million in 2005 sales, is being challenged in three separate patent lawsuits from generic drugmakers, said Reames.

Sepracor can't afford to lose a patent fight over Xonepex, which accounted for more than half its total revenue last year.

"I don't know how someone would walk into that situation without eyes wide open," said Reames. "I would tend to think that if you're going to be buying a company for a significant premium you would want all intellectual property positions to be fully sound."

Webb at Stanford Financial Group said buyers should remember that the Xonepex franchise "is not foolproof. I think anyone acquiring them is going to have to put a discount on the franchise."

Sepracor's other product, the sleeping pill Lunesta, totaled $329 million in sales last year. Considering that Sepracor has already spent more than $200 million advertising the 2005 launch of the drug, and some analysts see it as a prospective blockbuster, Lunesta could present an attractive opportunity.

But Barbara Ryan, analyst for Deutsche Bank North America, said Lunesta sales could run into generic competition next year, when the patent on Sanofi-Aventis' sleeping pill Ambien is expected to expire.

"Ambien will go generic next year, and investors will remain concerned about Lunesta's continued ability to grow in the face of a very cheap alternative," she wrote in a recent note to clients.

Those issues aside for the moment, Schering-Plough has more to gain than Pfizer, said Ryan. If Pfizer buys Sepracor, that might boost its earnings 2 percent next year while Schering-Plough could get a boost of 11 percent, she wrote.

The analysts interviewed for this story do not own shares of the stocks mentioned here, though Deutsche Bank North America does seek business with Pfizer.

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