Washington Editor

The FDA dealt another blow to Inspire Pharmaceuticals Inc. with a second approvable letter for its investigational dry eye drug, diquafosol, shaving a third off the company's stock value Friday.

"We recognized that with the mixed results from our various diquafosol clinical trials," Inspire President and CEO Christy Shaffer said during a conference call, "gaining FDA approval for diquafosol would be an uphill battle."

The Durham, N.C.-based company's shares (NASDAQ:ISPH) fell 34 percent, or $2.53 on Friday, to close at $4.90, a sharply negative reaction due in part to recent hopes. Some of that optimism lately has come from clinicians, whom New York-based SG Cowen & Co. analyst Ian Sanderson said have come to accept the product's signs of efficacy and clean safety profile despite its imperfections.

But the agency's latest criticism of Inspire's new drug application noted that clinical studies designed to support the ophthalmic solution's approval "fail to demonstrate adequate replication of results for the efficacy endpoints and therefore are insufficient to establish efficacy." The company filed an amended NDA earlier this year based on clinical findings on more than 2,000 patients from four trials, believing that the combined data showed a benefit in corneal clearing and staining. But just prior to that submission, Inspire unveiled relatively uninspiring data: A trial labeled Study 109 failed to demonstrate a statistically significant improvement of the incidence of complete corneal clearing (p=0.369), its primary endpoint, a revelation that dropped the company's stock by almost half to $8.88. (See BioWorld Today, Feb. 10, 2005.)

As a result, the agency's latest action came as no surprise to Sanderson, who told BioWorld Today that none of the four studies on which the amended NDA was based showed both objective and subjective benefits compared to artificial tears. "In its trials, diquafosol has never been able to show statistically significant improvement on both in a single trial," he said. "In fact, they've never shown statistically significant improvement on [subjectively assessed] symptoms in any of their trials."

Inspire first filed for diquafosol's approval in June 2003, but received an initial approvable letter six months later. The FDA said at the time that final approval hinged on Inspire's ability to replicate the corneal staining results seen in a trial called Study 105. (See BioWorld Today, Dec. 23, 2003.)

Study 109 and another called Study 108 set out to do that, but both missed their primary endpoints. Still, Inspire had hope because the approval of Allergan Inc.'s Restasis (cyclosporine) for dry eye came after three approvable letters, Sanderson said, meaning that the FDA might have cleared the anti-inflammatory product despite the less-than-ideal route it took down the regulatory path. But the agency appears less willing to lower its standard for diquafosol given that the market already has one drug, and a trio of potential competitors is not far off. Late-stage dry eye drugs are being developed by Alcon Inc., of Fort Worth, Texas; Novartis AG, of Basel, Switzerland; and Ista Pharmaceuticals Inc., of Irvine, Calif.

Looking ahead, the FDA communiqué stressed that "consistent findings of corneal clearing need to be demonstrated to support the efficacy of the drug product."

Shaffer said Inspire will request a meeting with the agency to determine how best to move forward through the regulatory process, a discussion the company hopes to have in the next month or two. Prior to that, members of a joint development committee that includes representatives from Inspire's corporate partner, Allergan, will meet this week to plot further strategies.

Sanderson speculated that at least one more study is on tap to at least achieve a narrow label for central corneal clearing, which diquafosol previously has accomplished. There also is a chance that Inspire could wash its hands of it all, he added, especially if the FDA requires a large study to prove complete corneal clearing. "But if there's any sign of give, I think they'll go ahead with it," he said, noting that an additional trial would only cost about $5 million and wouldn't require a lengthy duration. However, he added that dropping the drug outright "would have a material impact" on the company, as it's the only product it plans to internally promote.

Shaffer said "a more detailed update on the next steps for the diquafosol program" would follow the coming meetings with both Allergan and the FDA. For its part, Allergan, also of Irvine, pledged its commitment "to supporting Inspire's effort to secure diquafosol's approval."

The two companies already work together on two other ophthalmology products developed by Allergan, Elestat (epinastine) for allergic conjunctivitis and Restasis, as Inspire's U.S. specialty sales force promotes both.

On its own, ophthalmology is a clear focus for Inspire, as are respiratory allergies. Shaffer said the company, which had $126 million in cash reserves on Sept. 30, also is exploring various in-licensing opportunities to bolster its portfolio in both these core areas going forward.

Inspire also continues to expand other programs in its pipeline, including denufosol for cystic fibrosis. A coming end-of-Phase II meeting with the FDA and plans to secure an overseas partner for denufosol signal future directions for the drug, which is designed to enhance the lung's innate mucosal hydration and mucociliary clearance through stimulation of the P2Y2 receptor. In addition, Inspire plans to begin a Phase II study next quarter for INS50589 Antiplatelet, a reversible P2Y12 receptor antagonist targeted for use in cardiopulmonary bypass procedures and also slated for out-licensing.