(Durham, N.C.)  Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today financial results for the second quarter ended June 30, 2009, reporting a net loss of $9.5 million or ($0.17) per share. The company also announced today that President and CEO, Dr. Christy L. Shaffer, has informed the Board of Directors that she plans to step down once a successor is in place.

Based on Dr. Shaffer’s plan, Inspire’s Board has initiated an external CEO search process, which is well underway. Dr. Shaffer has committed to the Board that she will remain in place during the hiring of her successor, ensure a smooth and orderly transition process and be available in an advisory role, as needed.

Inspire’s Chairman of the Board, Kenneth B. Lee, Jr., commented, “As Inspire’s first full-time employee in 1995 and CEO since 1998, Christy has been the driving force in the Company’s development and she will be greatly missed. We respect Christy’s decision to transition leadership from her entrepreneurial, scientific expertise to a chief executive with strong global commercial biopharmaceutical experience. We believe our current portfolio of marketed products and multiple potential product approvals related to late-stage clinical programs position Inspire very well for future growth.”

Total revenue for the second quarter of 2009 was $23.1 million, as compared to $22.0 million for the second quarter of 2008, reflecting an increase of 5%. Revenue from AzaSite® (azithromycin ophthalmic solution) 1% totaled $7.6 million in the second quarter of 2009, an increase of 86% compared to $4.1 million in the second quarter of 2008. Total revenue for the second quarter of 2008 included $1.25 million of collaborative research and development revenue.

Total product co-promotion and royalty revenue for the second quarter of 2009 was $15.5 million, comprised of co-promotion revenue from net sales of Elestat® (epinastine HCl ophthalmic solution) 0.05% and royalty revenue from net sales of Restasis® (cyclosporine ophthalmic emulsion) 0.05%, compared to $16.7 million in the second quarter of 2008. Royalty revenue from Restasis was $8.9 million and co-promotion revenue from Elestat was $6.6 million, as compared to $8.9 million and $7.8 million, respectively, recognized in the second quarter of 2008. In addition, the Company has deferred $3.3 million of revenue from net sales of Elestat that occurred in the first six months of 2009, which compares to $2.6 million of deferred revenue for the same period in 2008. Under the co-promotion agreement for Elestat, Inspire is entitled to a percentage of net sales based upon predetermined calendar year net sales target levels. A portion of Elestat co-promotion revenue has been recorded as deferred revenue and will be until the Company has achieved its 2009 annual minimum net sales target level. All deferred revenue is expected to be recognized by the end of 2009 when the annual minimum net sales target level is achieved.

Total revenue for the six months ended June 30, 2009 was $37.4 million and represented an 18% increase over the total revenue of $31.7 million for the same period in 2008. Total revenue for the six months ended June 30, 2009 was comprised of $23.6 million of co-promotion and royalty revenue on net sales of Restasis and Elestat and $13.8 million of AzaSite revenue, as compared to $24.1 million and $6.4 million, respectively, recognized for the six months ended June 30, 2008.

Operating expenses for the second quarter of 2009 totaled $31.9 million, as compared to $27.9 million for the same period in 2008. The increase in second quarter 2009 operating expenses, as compared to 2008, was primarily due to higher research and development expenses associated with ongoing programs.

Operating expenses for the six months ended June 30, 2009 were $64.9 million, as compared to $63.4 million for the same period in 2008. The increase in six month 2009 operating expenses, as compared to 2008, was primarily due to $2.0 million in restructuring charges that occurred with the elimination of preclinical and drug discovery activities in the first quarter of 2009.

For the second quarter ended June 30, 2009, Inspire reported a net loss of $9.5 million, or ($0.17) per common share, as compared to a net loss of $6.4 million, or ($0.11) per common share, for the same period in 2008. The net loss for the six months ended June 30, 2009 was $28.9 million, or ($0.51) per common share, as compared to a net loss of $32.3 million, or ($0.57) per common share for the same period in 2008. Cash, cash equivalents and investments totaled $42.5 million at June 30, 2009, reflecting a $30.4 million utilization of cash and investments during the first half of 2009.