Inspire Pharmaceuticals, Inc. Q2 2010 Earnings Call Transcript

Inspire Pharmaceuticals, Inc. Q2 2010 Earnings Call Transcript
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Inspire Pharmaceuticals, Inc. (ISPH)

Q2 2010 Earnings Call Transcript

August 5, 2010 8:00 am ET

Executives

Adrian Adams – President and CEO

Jenny Kobin – VP, IR and Corporate Relations

Tom Staab – EVP and CFO

Analysts

David Moskowitz – Madison Williams

David Amsellem – Piper Jaffray

Joseph Schwartz – Leerink Swann

Jon Stephenson – Summer Street Research

Presentation

O

perator

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Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Inspire Pharmaceuticals second quarter 2010 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions) As a reminder, ladies and gentlemen, this call is being recorded today, Thursday, August 5th, 2010. Thank you. I will now turn the conference over to Mr. Adrian Adams, president and chief executive officer. Please go ahead, sir.

Adrian Adams

Thank you, operator, and good morning, everyone. And thank you for joining us for Inspire's second quarter 2010 financial results webcast. With me this morning are Executive Vice President, Chief Financial Officer, and Treasurer Tom Staab; and, Vice President of Investor Relations and Corporate Communications Jenny Kobin. Before I proceed, I would like to ask Jenny to read our forward-looking statement. Jenny?

Jenny Kobin

Thank you, Adrian. Before we get started, I would like to remind everyone that we have a slide presentation to accompany our conference call this morning, which can be viewed at our Web site at inspirepharm.com. If you are listening to this call on your telephone, you may access a synchronized slide deck on our Web site by choosing the link on our webcast page that says Click Here to listen via phone.

This conference call and presentation contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, which convey management's expectations, beliefs, plans, and objectives regarding future performance. These forward-looking statements are subject to a wide range of risks and uncertainties that could cause results to differ in material respects, including those relating to product commercialization, product development, revenue, expense, earnings and cash utilization expectations, intellectual property rights, adverse litigation developments, competitive products, results and timing of clinical trials, success of marketing efforts, the need for additional research and testing, delays in manufacturing, funding, and the timing and content of decisions made by regulatory authorities including the US Food and Drug Administration.

Actual results could differ materially from those described in this conference call and presentation. Information on various factors that could affect Inspire's results is detailed in the reports we filed with the Securities and Exchange Commission. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements.

Now, I'll turn the call back over to Adrian to review today's agenda provided on slide three.

Adrian Adams

Thank you, Jenny. I'm pleased to provide an update this morning to our shareholders and analysts on the company's second quarter financial results, including our commercial accomplishments; progress in our research and development programs; and, corporate initiatives to structure, shape, and resource the organization to success. During the second quarter and first half of the year, the organization has remained tightly focused on executing against our key corporate strategic objectives that we believe will help build shareholder value over time. We are looking forward to providing you with our key accomplishments and updates throughout this webcast.

As always, I will begin by providing you with an overview of the main areas that we will cover during today's webcast. First, I will review a snapshot of our accomplishments to-date related to the corporate objectives we outlined at the beginning of this year. Second, I will review the continued commercial success of Inspire's sales force during the second quarter and first half of the year. Third, I will review the key updates in our late-stage research and development programs, including the AzaSite for blepharitis and denufosol for cystic fibrosis programs. Then I will turn the call over to Tom to review the financial results for the second quarter and review our revised 2010 financial guidance. I will then conclude the call with a review of our upcoming milestones for the second half of the year as they relate to our corporate objectives. And then, open the call up for your valued questions.

Please now refer to slide number four. This slide provides a representation of Inspire's core capabilities and our plans to build shareholder value over the course of time through focused execution against our strategic imperatives. Inspire's mission is to build and commercialize a sustainable plant line of innovative new products based on our technical, scientific, and commercial expertise. As many of you know, our focus of Inspire is in the two specialty pharmaceutical markets of ophthalmology, anchored by AzaSite and supported by a portfolio of revenue-generating products; and, pulmonology, anchored by denufosol, our potential breakthrough product for cystic fibrosis. Our five key strategic imperatives are aligned towards creating value for shareholders by building on these foundations for success and growing the business within both the ophthalmology and pulmonology areas.

Please now refer to slide number five, where I will discuss these five key strategic imperatives with a view towards providing you with a summary of Inspire's continued execution and accomplishments in each of these areas during the second quarter and first half of 2010.

First, I am pleased to report that in terms of Inspires commercial performance, our specialty ophthalmology sales force continues to drive increased revenue and prescription growth quarter-over-quarter for our anchor product AzaSite, a product indicated for bacterial conjunctivitis. We are delighted to report that AzaSite experienced sustained revenue growth of 27% and solid prescription growth of 32% over the second quarter of 2009 – and revenue growth of 33%, and prescription growth of 36% over the first half of 2009. Our sales force also continued generating the revenue stream we enjoyed from core promotion of ELESTAT. And we'll continue to promote this product until a generic version is launched. As we have previously disclosed, we still expect a generic epinastine product to be launched sometime before the end of this year.

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