Inspire Shares Jump 10 Percent on Lower than Expected Loss

Durham, N.C. — Inspire Pharmaceuticals (Nasdaq: ISPH) jumped more than 11 percent Tuesday after the drug-development firm reported smaller than expected losses in the fourth quarter and for all of 2007.

Inspire shares sold at $4.26, up 43 cents, in early afternoon trading. By the close, shares dipped a bit to end the day at $4.23, up 40 cents.

The company reported a loss of $18.1 million, or 35 cents a share, in the fourth quarter and $63.7 for 2007. A 16-cent charge, or $8.3 million, related to the conversion of preferred stock to common stock, helped drive up the loss.

According to the Associated Press, Cowen and Co. analyst Ian Sanderson said lower-than-expected AzaSite sales accounted for the revenue shortfall, but that shouldn't come as a surprise, given that the rollout since August has been slower than expected.

Sanderson, who reaffirmed a “neutral” rating on the stock, also said the investment by Warburg Pincus, which triggered the stock conversion, is likely to boost the company. He also said partnership with Bausch & Lomb could boost Inspire’s eye-product line.

Revenues increased to $13.9 million in the fourth quarter, up from $8.5 million in 2006. For the year, Inspire’s revenues soared 31 percent to $48.7 million.

Analysts had forecast a loss of 39 cents per share excluding the one-time charge.

Inspire, which is marketing, selling and testing a variety of drugs, forecast revenues for 2008 to range between $62 million and $76 million. Analysts forecast revenues of $66.65 million. Inspire currently is co-marketing three drugs.

Costs also increased in 2007, jumping 37 percent to $114.5 million as Inspire increased the size of its sales staff by 50 percent, or 98 positions, and launched a managed care group to support the launch of eye treatment drug AzaSite.