Raising more money than first expected, Inspire Pharmaceuticals Inc. sold 5 million shares in a public offering that netted $63.1 million.

Last week, the Durham, N.C.-based company said it planned to publicly offer 4 million shares at $13.99 apiece for total proceeds of about $56 million. (See BioWorld Today, March 12, 2003.)

The per-share price drew down a bit, to $13.50, but Inspire's sale drew more buyers than originally anticipated.

"We're thrilled that we were able to generate this level of interest in this kind of market environment," Mary Bennett, Inspire's vice president of operations and communications, told BioWorld Today. "I think over the last several months there has been an increasing confidence in our programs, based on a number of milestones that we have met. So I think this interest has been growing for some time."

The shares, which garnered $67.5 million before fees, were offered under Inspire's currently effective shelf registration statement, originally filed in January covering $100 million in common stock.

"This amount could take us through to profitability," Bennett said. "That's not to say we wouldn't go back to the shelf, but at this point, if things go well we wouldn't need to."

Inspire's $63.1 million in net proceeds does not take into account an exercise of the underwriters' overallotment option to purchase up to 750,000 shares of common stock on the same terms and conditions. New York-based Deutsche Bank Securities acted as the offering's book-running manager, while Minneapolis-based U.S. Bancorp Piper Jaffray acted as co-lead manager.

Bennett said Inspire had $31.1 million in cash as of Dec. 31. In its prospectus, Inspire said it would have about 30.9 million shares outstanding following the offer, a figure that does not include the overallotment option.

The company said it would apply the added financing to fund drug discovery programs and for hiring a sales force. More specifically, Inspire said it would apply a portion of the funding to further develop its rhinitis program - a Phase III trial of the intranasal formulation of its INS37217 compound recently completed enrollment in perennial allergic rhinitis - and build a 60-person sales force during the fourth quarter if the company elects to exercise an option to co-promote the products Restasis and diquafosol.

"The primary use is for our allergic rhinitis program," Bennett said, adding that the company expects to run at least two more Phase III trials in order to secure approval in both perennial and seasonal allergic rhinitis. "Another significant use of the cash is to develop a specialty sales force by the end of this year so that we can take advantage of that co-promotion option."

Restasis, Allergan Inc.'s dry-eye product that received marketing clearance in December, is expected to be launched next month. A year and a half ago, Inspire and Irvine, Calif.-based Allergan entered a deal for Restasis and Inspire's diquafosol tetrasodium (INS365), another dry-eye product. Inspire would receive royalties on Restasis worldwide, excluding larger Asian markets. (See BioWorld Today, June 28, 2001.)

Bennett said Inspire expects to receive approval for diquafosol during the first half of next year.

Its INS37217 product also is being studied for cystic fibrosis and retinal disease, while Inspire also has developed another late-stage dry eye product, INS365. The company said it expects to submit a new drug application for the compound by the middle of the year. (See BioWorld Today, Oct. 31, 2002.)

Bennett said Inspire also would allocate some of its proceeds toward general development costs for other programs, including discovery efforts. All of its candidates are P2Y2 receptor agonists.

Inspire's stock (NASDAQ:ISPH) gained 37 cents Friday to close at $14.37.