Inspire Pharmaceuticals is abandoning development of its cystic fibrosis drug candidate and restructuring the company to focus on eye treatments.
Inspire’s (NASDAQ:ISPH) strategy shift follows the failure of the experimental drug denufosol in phase III clinical trials studying the drug as a CF treatment. Results of a second phase III study released last month showed denufosol did not meet goals of the study and failed to show “meaningful treatment benefit” to patients in the trial.
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The restructuring means that Raleigh, North Carolina-based Inspire will discontinue its pulmonary therapies program. CEO Adrian Adams said in a prepared statement that the restructuring will enable Inspire to move toward profitability and reduce the company’s costs and cash burn.
Inspire will now have to rely exclusively on its eye products as a revenue source. The company generates revenue through sales of its eye products and agreements with other companies. Azasite, a treatment for bacterial conjunctivitis, generated $13.2 million in revenue in the fourth quarter of 2010, a 9 percent increase compared to the year-ago period. Fourth-quarter royalty revenue for dry eye treatment Restasis was $13 million, up about 8.3 percent from the fourth quarter of 2009.
With the restructuring, Inspire will cut 65 jobs, representing a 27 percent reduction in headcount. The company estimates the restructuring will save more than $40 million in 2011. That figure represents approximately $10 million in compensation savings and up to $30 million in savings from reduced R&D spending. But the company expects to record restructuring charges of between $10 million and $13 million in the first quarter.
Inspire also released fourth-quarter and full-year results for 2010. Inspire’s fourth-quarter loss widened to $4.3 million compared to $2.6 million in the fourth quarter of 2009. Revenue in the quarter was $30.3 million, up slightly from $29.6 million a year ago.
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For the year, Inspire reported a net loss of $35.4 million, a decrease of 11 percent compared to 2009. Revenue in 2010 was $106.3 million, up 15.4 percent over 2009.