Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today financial results for the first quarter ended March 31, 2010, reporting a net loss of $14.8 million or ($0.18) per share.
“During the quarter, we continued our trend of double-digit revenue growth, and through tight management of our operating expenses, continued to successfully reduce our net loss”
Total revenue for the first quarter of 2010 was $22.1 million, as compared to $14.3 million for the first quarter of 2009, reflecting an increase of 54%. Revenue from AZASITE® (azithromycin ophthalmic solution) 1% totaled $8.7 million in the first quarter of 2010, an increase of 41% compared to $6.2 million recognized in the first quarter of 2009. Inspire estimates that approximately $1 million of first quarter 2010 AZASITE revenue was associated with hospital usage of AZASITE as a substitute therapy during a supply shortage of erythromycin ophthalmic ointment (0.5%). The supply shortage of erythromycin ophthalmic ointment (0.5%) has been resolved and accordingly, the Company does not expect any future revenue in 2010 associated with the supply shortage.
Total product co-promotion and royalty revenue, comprised of royalty revenue from net sales of RESTASIS® (cyclosporine ophthalmic emulsion) 0.05% and co-promotion revenue from net sales of ELESTAT® (epinastine HCl ophthalmic solution) 0.05% was $13.4 million for the first quarter of 2010 compared to $8.1 million in 2009. Royalty revenue for the first quarter of 2010 from RESTASIS was $9.8 million compared to $8.1 million in the first quarter of 2009. Co-promotion revenue from ELESTAT in the first quarter of 2010 was $3.6 million as compared to no revenue recognized in the first quarter of 2009. All first quarter 2009 co-promotion revenue from ELESTAT was deferred and recognized later in 2009 due to not achieving contractual minimum target levels during the first quarter of 2009.
Operating expenses for the first quarter of 2010 totaled $36.5 million, as compared to $33.0 million for the same period in 2009. The increase in first quarter 2010 operating expenses was primarily due to an increase in general and administrative expenses of approximately $5 million associated with the CEO transition, for which the majority of the expense was non-cash, as well as an increase in cost of sales resulting from increased AZASITE sales volume. These increases were partially offset by a decrease in research and development expenses due to the elimination of preclinical and drug discovery activities and to focusing resources on late-stage programs as a result of the restructuring initiative that occurred in the first quarter of 2009.
For the first quarter ended March 31, 2010, the Company reported a net loss of $14.8 million, or ($0.18) per common share, as compared to a net loss of $19.4 million, or ($0.34) per common share, for the same period in 2009. Cash, cash equivalents and investments totaled $115.2 million at March 31, 2010, reflecting a $13.9 million utilization of cash and investments during the first quarter.
"During the quarter, we continued our trend of double-digit revenue growth, and through tight management of our operating expenses, continued to successfully reduce our net loss," said Adrian Adams, President and CEO of Inspire. "We remain focused on completing TIGER-2, our second pivotal Phase 3 trial of denufosol tetrasodium for cystic fibrosis, expanding the denufosol franchise and preparing for a potential 2012 U.S. launch. We remain intent on executing on our core objectives of leveraging our commercial infrastructure, driving excellence in research and development, pursuing strategically aligned corporate development and licensing opportunities and continuing to deliver strong financial performance."
Recent Updates Include (March 5, 2010 through May 3, 2010):
Ophthalmic Research & Development
- Announced that the Japanese Ministry of Health, Labour and Welfare granted approval on April 16, 2010 to Santen Pharmaceutical Co., Ltd. ("Santen") for DIQUAS™ Ophthalmic Solution 3% (diquafosol tetrasodium) for the treatment of dry eye, which is related to an exclusive license from Inspire to Santen to develop and market diquafosol for ocular surface diseases in Japan and nine other Asian countries; and
- Announced results from two Phase 2 clinical trials with AZASITE for the treatment of blepharitis; the next step in the program will be refining the clinical trial design for subsequent trials, including some additional Phase 2 trial work expected to begin in late 2010.
Pulmonary Research & Development
- Extended the length of the TIGER-2 follow-on, open-label denufosol only trial (Trial 08-114) enabling patients who complete TIGER-2 to receive denufosol for up to three years in this trial; and
- Entered into a Technical Transfer & Development Services Agreement with Finorga S.A.S., or Novasep, to enable Novasep to become a qualified commercial manufacturer of the active pharmaceutical ingredient ("API") for denufosol.
Sales and Marketing
- Increased first quarter 2010 AZASITE prescription volume by approximately 39% over the first quarter of 2009.
- Appointed Andrew I. Koven to the newly created position of Executive Vice President and Chief Administrative and Legal Officer, effective May 10, 2010.
Financial Outlook for 2010
- Based upon current trends and assumptions, Inspire expects to record 2010 aggregate revenue in the range of $100-$111 million. Co-promotion revenue from ELESTAT will be dependent on the timing of a launch of a generic form of epinastine, which is expected to occur in the second half of 2010;
- Total 2010 operating expenses are expected to be in the range of $145-$169 million. Cost of sales, which includes the amortization of the AZASITE approval milestone and royalty obligations to InSite Vision Incorporated, is expected to be in the range of $13-$18 million. Total estimated selling and marketing and general and administrative expenses are estimated to be in the range of $48-$53 million and $27-$32 million, respectively. Research and development expenses are estimated to be in the range of $60-$70 million. Included within this operating expense guidance are projected stock-based compensation costs of approximately $8-$12 million; and
- Operating cash utilization in 2010 is expected to be in the range of $58-$73 million, which incorporates $20 million of principal repayment on the Company's outstanding debt.
Inspire Pharmaceuticals, Inc.