Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today financial results for the first quarter ended March 31, 2011, reporting a net loss of $17.6 million or ($0.21) per common share, as compared to a net loss of $14.8 million, or ($0.18) per common share, for the same period in 2010. The Company's first quarter 2011 results included a $12.2 million restructuring charge associated with the discontinuation of the Company's pulmonary therapeutic operations and other related infrastructure reductions.
Total revenue for the first quarter of 2011 was $21.1 million, as compared to $22.1 million for the first quarter of 2010. Revenue from AZASITE® (azithromycin ophthalmic solution) 1% totaled $10.9 million in the first quarter of 2011, an increase of 26% compared to $8.7 million recognized in the first quarter of 2010. Inspire estimates that approximately $1 million of the first quarter 2010 AZASITE revenue was associated with hospital usage of AZASITE as a substitute therapy during a temporary supply shortage of erythromycin ophthalmic ointment (0.5%).
Total product co-promotion and royalty revenue, comprised of royalty revenue from net sales of RESTASIS® (cyclosporine ophthalmic emulsion) 0.05% and net sales of DIQUAS™ Ophthalmic Solution 3% (diquafosol tetrasodium), and co-promotion revenue from net sales of ELESTAT® (epinastine HCl ophthalmic solution) 0.05%, was $10.2 million in the first quarter of 2011 compared to $13.4 million for the first quarter of 2010. Royalty revenue for the first quarter of 2011 from RESTASIS® was $7.2 million compared to $9.8 million in the first quarter of 2010, reflecting a reduction in the applicable royalty rate associated with an amendment to the agreement with Allergan, Inc., which was previously announced in August 2010. Co-promotion revenue from ELESTAT in the first quarter of 2011 was $2.7 million as compared to $3.6 million recognized in the first quarter of 2010. Additionally, the Company recognized $316,000 of DIQUAS royalty revenue in 2011, its first revenue from Japanese sales of the product that was launched in mid- December 2010.
Operating expenses for the first quarter of 2011 totaled $38.8 million, as compared to $36.5 million for the same period in 2010. The increase in first quarter 2011 operating expenses was primarily due to $12.2 million of restructuring charges related to the discontinuation of the Company's pulmonary therapeutic operations and its related corporate restructuring in February 2011. These increases were partially offset by both a decrease in research and development expenses and a decrease in general and administrative expenses. After excluding the 2011 restructuring charges, which are expected to be the full extent of costs associated with the change in strategic focus and operations of the Company, operating expenses for the first quarter of 2011 were $26.6 million, and reflected a $9.9 million decrease from operating expenses incurred in the first quarter of 2010.
Cash, cash equivalents and investments totaled $77.8 million at March 31, 2011, reflecting a $16.4 million utilization of cash and investments during the first quarter. The Company's cash and investments utilization was slightly less than its first quarter 2011 operating plan.
"During the quarter, we made progress towards achieving our 2011 objectives," said Adrian Adams, President and CEO of Inspire. "We increased AZASITE prescription and revenue growth, continued enrollment in the Phase 2 blepharitis trial, completed a corporate restructuring and reorganization and delivered another quarter of strong financial performance. Furthermore, we were pleased to announce the proposed acquisition of Inspire by Merck and believe that this, when completed, represents the best prospect for enhancing stockholder value and realizing the potential of our ophthalmology products and product candidates."
Recent Updates Include (February 18, 2011 through May 10, 2011):
Ophthalmic Research & Development
- Continued enrolling patients in the exploratory Phase 2 clinical trial (Trial 044-103) comparing AZASITE to vehicle for the treatment of blepharitis.
Sales and Marketing
- Increased first quarter 2011 AZASITE prescription volume and revenue by approximately 10% and 26%, respectively, as compared to first quarter 2010;
- Announced that an Abbreviated New Drug Application ("ANDA") for a generic version of AZASITE was filed with the U.S. Food and Drug Administration ("FDA") by Sandoz, Inc.; and
- On May 2, 2011, Cypress Laboratories announced the launch of a generic form of epinastine, resulting in the termination of the co-promotion agreement between the Company and Allergan, Inc. regarding Elestat.
- Announced that Merck & Co., Inc. ("Merck") and the Company entered into an Agreement and Plan of Merger, whereby Merck, through a subsidiary, has offered to purchase all of the outstanding shares of common stock of the Company at a price of $5.00 per share, which represented a 26% premium to the closing stock price on April 4, 2011.
Inspire Pharmaceuticals, Inc