Inspire announces strategic corporate restructuring on its eye care business

Feb 17 2011

Inspire Pharmaceuticals, Inc. announced today a strategic corporate restructuring designed to result in the Company focusing activities on its eye care business, allowing it to fully leverage existing commercial capabilities, pipeline assets and related corporate development and licensing opportunities.

Adrian Adams, President and CEO of Inspire, stated, "We conducted a strategic evaluation of our operations following the recent announcement of the disappointing results with our cystic fibrosis (CF) program and believe the prudent strategy for Inspire is to leverage our eye care business and discontinue our pulmonary therapeutic focus. Therefore, we are implementing a substantial corporate restructuring that we anticipate will enable us to drive toward profitability and positive cash flow by significantly reducing our cost base and cash burn. Our eye care business continues to generate an attractive revenue stream from growth in our anchor product, AZASITE^® (azithromycin ophthalmic solution) 1% for bacterial conjunctivitis, and royalties from other ophthalmic products."

"Our assessment of the full data set from the TIGER-2 Phase 3 trial of denufosol tetrasodium for the treatment of CF, the open-label DEFY trial data and our current corporate resources supports our decision to discontinue Inspire's development of denufosol. We want to express our sincere gratitude to the CF community including the many patients, families and care providers who supported denufosol research through their participation in our clinical trials. We also want to recognize and thank the employees affected by the corporate restructuring for their many contributions to the Company," Adams concluded.

The corporate restructuring includes a workforce reduction of approximately 65 positions, or 27% of total headcount, which represents 45% of non-sales force headcount, primarily affecting functions in Research & Development (R&D), Manufacturing & Technical Operations and General & Administrative. There are minimal changes to the commercial infrastructure and no reductions to Inspire's specialty eye care sales force. This strategic restructuring is estimated to result in a more than $40 million reduction in 2011 non-cost of sales operating expenses, excluding restructuring charges, as compared to 2010. This amount is estimated to include approximately $10 million of compensation expense savings and up to $30 million in reduced R&D spending. The Company expects to record a restructuring charge of $10-$13 million in the first quarter of 2011, which will include severance costs, termination of ongoing denufosol contracts and activities and the write-off of impaired assets and idle facility charges.