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Drug Developer Inspire Pharmaceuticals Posts $23.3 Million Revenue Hike in 2005

Posted on: Wednesday, 1 March 2006, 15:00 CST

By Jeff Zimmer, The Herald-Sun, Durham, N.C.

Mar. 1--Inspire Pharmaceuticals reported its revenue doubled in 2005 to $23.3 million and the Durham drug development company narrowed its year-end loss to $31.8 million or 76 cents per share.

During 2004, the company posted a loss of $44.1 million or $1.25 per share.

While the company's 2005 results were an improvement over the previous year, Inspire's revenues in the fourth quarter and 2005 fell short of analysts' estimates. A survey of five analysts had projected total 2005 revenues of $24.3 million for the company.

Inspire said it lost $7.1 million or 17 cents a share in the fourth quarter. And while the company generated $5.2 million in fourth-quarter revenue, analysts had projected $6.2 million for the period. Still, the company's losses in the fourth quarter and year-end were less than analysts predicted as the company cut its research and development spending in the fourth quarter by $4.3 million as its clinical trial activity cooled.

But the company expects to boost its R&D spending in 2006 as it moves ahead with development of a nasal spray for allergies that uses the antihistamine epinastine. Inspire signed an agreement last month with Boehringer Ingelheim that has the Durham firm paying $2.5 million for the rights to develop and market the therapy in the United States and Canada.

Additionally, Inspire expects to initiate Phase III testing this year of its denufosol tetrasodium treatment for cystic fibrosis. While Inspire had total expenses of $58.8 million in 2005, the company estimates expenses will rise to between $77 million and $86 million in 2006 due to increased R&D spending.

"We expect that 2006 will be a year of tremendous effort and progress in moving several key R&D programs forward into both Phase II and III trials," said Christy Shaffer, Inspire's president, during a conference call on Tuesday. The therapies the company is developing target the ophthalmology and respiratory/allergy markets.

On the revenue side, Inspire expects to generate between $31 million and $39 million in total revenues in 2006, which falls within the $35 million range that analysts are projecting for the year.

The company's revenues are driven by its co-promotional agreement that has Inspire selling Allergan's eye therapies Elestat and Restasis. The $23.3 million in co-promotional revenue in 2005 represented a 110 percent increase over 2004 amounts, the company said.

"It is important to now emphasize that the revenue we generate from our copromoted products now exceeds our sales and marketing expenses," Shaffer said during Tuesday's conference call.

The company ended 2005 with $122.3 million in cash and cash equivalents, which a company official said represented two years of operating capital. Inspire's stock closed at $5.05 Tuesday, down 11 cents.

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ISPH,

Source: The Herald-Sun

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