Inspire Pharmaceuticals Inc. received a jolt of negative news as the FDA indicated a need for additional data on diquafosol tetrasodium, an investigational dry eye product the company filed a new drug application for in June.

More specifically, the agency issued an approvable letter related to the NDA, but in the letter requested that the Durham, N.C.-based company conduct an additional clinical study. The news cut 19.6 percent off the value of Inspire's stock (NASDAQ:ISPH), which dropped $3.21 Monday to $13.14.

But Inspire President Gregory Mossinghoff said that though the FDA's request slows any regulatory action on diquafosol, it does not necessarily signal a poor outcome.

"We are encouraged that we got an approvable letter, as this is a big step in the right direction," he told BioWorld Today. "The vast majority of products that [receive approvable letters] end up being approved products."

No other specific deficiencies were noted in the approvable letter, which also indicated that comments on proposed labeling would be provided by the FDA when the clinical issues have been addressed.

"There were no issues involving chemistry, manufacturing and controls, toxicology, pharmacology, clinical safety or any sort of preclinical issues," Mossinghoff said. "This is all around a central question of clinical efficacy, and we may already have enough information to address that."

He added that any delay could be short, about a half year beyond expected launch, or more in the order of a full year later. Inspire plans to meet with the FDA as soon as possible to determine whether a third pivotal study completed after the NDA was submitted would provide sufficient data to complete the review process. Called 03-108, the Phase IIIb study included assessments of both a conventional environmental component and an experimental controlled adverse-environment chamber designed to exacerbate dry eye.

The NDA was submitted on findings from two other pivotal studies, as well as a Phase IIb trial, all of which were designed to assess a primary endpoint of corneal surface staining.

"In a short-term delay scenario, we could submit study 03-108, as well as additional analyses from other clinical trials, and potentially that would be enough for the FDA," Mossinghoff said. "In that case, we would be looking for potentially a half-year delay from the original plan, which would have been a launch in the first half of next year."

Diquafosol was well tolerated with an incidence of adverse events similar to placebo. There were no treatment-related serious adverse events reported.

Should the company need to complete an additional confirmatory study, he said Inspire would work to complete it within a year, followed by a complete response to the agency. Such a schedule would lead the company to plan for a launch in the first half of 2005.

Diquafosol is partnered with Allergan Inc., with which Inspire also is paired in an arrangement to promote two other eye products - Elestat and Restasis. Inspire plans to begin co-promoting the latter, a dry eye treatment developed by Irvine, Calif.-based Allergan, next month through an internal 64-person sales staff. A month later, Inspire expects to begin promoting the former, a topical allergic conjunctivitis treatment also developed by Allergan.

Elsewhere in its pipeline, Inspire is developing a small molecule labeled INS-37217 in two Phase II programs. As an inhaled product, the compound is being evaluated for its use in treating cystic fibrosis. Used through an intravetrial injection, the compound is being evaluated for retinal disease.