Inspire hit as partner Genentech drops drug

Inspire Pharmaceuticals suffered a share-price lashing followingGenentech's decision to pull out of a collaboration on a new class of drugs for respiratory diseases. Inspire's stock lost 38% of its value on the day of the announcement (June 20), with shares falling $2.41 to $12. Genentech's share price, however, was boosted by the news and rose $1.60 to $54.14.

Inspire has reacquired all rights to the P2Y2 agonist compounds, which include INS365 for the treatment of chronic bronchitis (in Phase II trials) and INS37217 for cystic fibrosis (in Phase I/II), at no cost. Genentech stressed that decision was not an indictment of the potential of the drugs, but was based on a strategic review of it own development portfolio and competing priorities.

Inspire has received more than $16 million in equity investments and cash payments from Genentech since the alliance was established in 1999 (Marketletters passim). Christy Shaffer, Inspire's chief executive, said that "though this news is unexpected and disappointing, we are very pleased to be regaining rights to these potentially valuable and important products. Inspire has the resources to move these programs aggressively forward to add substantial value to the company."