Unlike the original Kingdom Hearts, Sephiroth's 'Sin Heartless Angel' does not kill you in a single hit, instead it depletes your MP and takes you to 1 HP. As long as you have a potion waiting for you directly after you're pretty much good to go, although it's not all that hard to jump up and hit him before he completes his phrase in most cases. When I beat him last night I think I only ended up using 3 hi-potions along with many uses of Curaga.