Washington Editor

Inspire Pharmaceuticals Inc. raised $72 million in a follow-on offering of 6 million shares of common stock at a price of $12 per share.

The Durham, N.C.-based company has granted its underwriters an option to purchase up to an additional 900,000 shares to cover overallotments. All shares are being offered by Inspire.

Inspire's stock (NASDAQ:ISPH) Tuesday fell 34 cents to close at $12.46.

Of the financing, Gregory Mossinghoff, company president, said: "We are very pleased with the support we've received in this very challenging market. Completing this deal successfully I think would be attributed to a strong message and a strong story at the company, but also to a very strong banking lineup."

Morgan Stanley & Co. Inc. is acting as sole book-running manager of the offering, with Deutsche Bank Securities Inc. acting as co-lead manager. SG Cowen & Co. LLC and Piper Jaffray & Co. are acting as co-managers. All firms are based in New York.

Mossinghoff said money raised in the offering will help move its product candidates forward.

Among them, Inspire is developing INS37217 Ophthalmic in retinal detachment and INS37217 Respiratory in cystic fibrosis. Both candidates are in Phase II studies. (The products are different formulations of denufosol.)

Meanwhile, Inspire still is trying to get diquafosol tetrasodium, its dry-eye product, to market after the FDA issued an approvable letter on the candidate, asking for additional data. (See BioWorld Today, Dec. 23, 2003, and Feb. 2, 2004.)

Inspire is conducting a confirmatory 520-patient Phase III trial on the dry-eye candidate. If all goes well, Mossinghoff said, Inspire hopes to amend its new drug application in the first half of next year.

Otherwise, Inspire markets Elestat and Restasis via deals with Allergan Inc., of Irvine, Calif. Restasis, launched in April 2003, is sold for dry-eye disease while Elestat is marketed for allergic conjunctivitis. (Allergan also is Inspire's diquafosol partner.)

Elestat, launched in February, generated $1.5 million in revenue for Inspire during the quarter ended March 31.

Inspire finished the first quarter with $63 million in cash and equivalents, and had 32 million outstanding shares (not including warrants and options).

The company estimates that its operating expenses for 2004 will total $54 million to $58 million.

Financials for the quarter ended June 30 will be released Aug. 9.