8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported)               April 19, 2006

INSPIRE PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Charter)

Delaware                                    000-31135                            04-3209022
(State or Other Jurisdiction(Commission (IRS Employer
of Incorporation)File Number)Identification No.)

4222 Emperor Boulevard, Suite 200, Durham, North Carolina            27703-8466
(Address of Principal Executive Offices)(Zip Code)

Registrant's telephone number, including area code          (919) 941-9777

_____________________________________________
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

On April 19, 2006, Inspire Pharmaceuticals, Inc. issued a press release, attached to and made part of this report, announcing the receipt of a milestone payment from Santen Pharmaceutical Co., Ltd. related to the development of diquafosol tetrasodium ophthalmic solution for the therapeutic treatment of ocular surface diseases, including dry eye, in Asia. The milestone payment of $1.25 million resulted from Santen's completion of its Phase 2 clinical testing of diquafosol in the first quarter of 2006.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

No.            Description

99.1Press Release dated April 19, 2006

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Inspire Pharmaceuticals, Inc.


By: /s/ Christy L. Shaffer
Christy L. Shaffer,
President and Chief Executive Officer

Dated: April 20, 2006

EXHIBIT INDEX

No.            Description

99.1Press Release dated April 19, 2006

EX-99.1

For Immediate Release

Investor Contact:
Inspire Pharmaceuticals, Inc.
Jenny Kobin,
Senior Director, Investor Relations
(919) 941-9777, Extension 219

Media Contact:
BMC Communications
Dan Budwick
(212) 477-9007, Extension 14

INSPIRE ANNOUNCES RECEIPT OF MILESTONE PAYMENT
FROM JAPANESE DRY EYE PARTNER

DURHAM, NC -- April 19, 2006 -- Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today the receipt of a milestone payment from Santen Pharmaceutical Co., Ltd. related to the development of diquafosol tetrasodium ophthalmic solution for the therapeutic treatment of ocular surface diseases, including dry eye, in Asia. The milestone payment of $1.25 million resulted from Santen's completion of its Phase 2 clinical testing of diquafosol in the first quarter of 2006.

Christy L. Shaffer, Ph.D., President and CEO of Inspire, stated, "We are delighted to be partnered with Santen, one of the leading ophthalmic pharmaceutical companies in Japan, with extensive experience in developing and commercializing ophthalmic products. Santen estimates that there are eight million dry eye patients in Japan, with the prevalence expected to continue rising due to the increased use of personal computers and contact lens, and an aging population. According to Santen's 2005 Annual Report, they have captured approximately 80% of the Japanese market share for dry eye related treatments, including generating more than $130 million in fiscal 2005 sales of HyaleinÒ , the leading prescription product currently used for the treatment of dry eye in Japan. We look forward to Santen's continued progress in developing diquafosol for the treatment of dry eye patients in Asia."

In December 1998, Inspire entered into a development, license and supply agreement with Santen for the development of diquafosol for the therapeutic treatment of ocular surface diseases, such as dry eye disease, in Japan and nine other Asian countries. Santen is responsible for all development, regulatory submissions, filings and approvals, and the commercialization of potential products in such countries. Under the agreement, Inspire could receive additional development milestone payments and if the product candidate is approved, will receive royalties on net sales.

About Inspire

Inspire is a biopharmaceutical company dedicated to discovering, developing and commercializing prescription pharmaceutical products in disease areas with significant commercial potential and unmet medical needs. Inspire has significant technical and scientific expertise in the therapy areas of ophthalmology and respiratory and is a leader in the field of P2 receptors which are important drug targets in various therapeutic areas, including ophthalmology, respiratory disease and cardiovascular disease. Inspire's U.S. specialty sales force promotes ElestatÒ (epinastine HCl ophthalmic solution) 0.05% and RestasisÒ (cyclosporine ophthalmic emulsion) 0.05%, ophthalmology products developed by Inspire's partner, Allergan, Inc. Elestat and Restasis are trademarks owned by Allergan. For more information on Inspire, visit www.inspirepharm.com.

Forward-Looking Statements

The forward-looking statements in this news release relating to management's expectations and beliefs are based on preliminary information and management assumptions. Such 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 development, revenue, expense and earnings expectations, the seasonality of Elestat, intellectual property rights, adverse litigation developments, adverse developments in the U.S. Securities and Exchange Commission (SEC) investigation, 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 those in Asia and/or the U.S. Food and Drug Administration. There can be no assurance that Santen will be successful in the development and commercializatio n of diquafosol tetrasodium for the treatment of ocular surface diseases in Japan or other applicable Asian markets. There can be no assurance that Inspire will receive any future development milestones, or royalties on net sales, associated with diquafosol. Further information regarding factors that could affect Inspire's results is included in Inspire's filings with the SEC. Inspire undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof.

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