8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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) June 19, 2007

INSPIRE PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-31135	04-3209022
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer 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 1.01 Entry into a Material Definitive Agreement.

On June 19, 2007, Inspire Pharmaceuticals, Inc. (“Inspire”) and FAES Farma, S.A., a publicly-traded Spanish pharmaceutical company (“FAES”), entered into a letter amendment (the “Amendment”) to the license agreement between Inspire and FAES dated October 31, 2006 (the “License Agreement”). Under the terms of the Amendment, FAES will be responsible, at its sole cost and expense, and for using commercially reasonable efforts to conduct certain development activities relating to its oral bilastine product candidate. Until the completion of such development activities, all obligations of Inspire with respect to the development and commercialization of oral bilastine products shall be suspended in all respects. Commencing on December 1, 2007, FAES may terminate such development activities prior to their completion by giving Inspire thirty (30) days notice. Pursuant to the terms of the Amendment, commencing on December 1, 2007, Inspire may terminate the License Agreement, in part or in its entirety, upon thirty (30) days notice to FAES prior to the first commercial sale of an applicable bilastine product, or upon one hundred eighty (180) days notice after the first commercial sale of an applicable bilastine product.

In addition, under the terms of the Amendment, certain milestone payment obligations relating to an oral bilastine product candidate have been amended. Specifically, Inspire will no longer be required to pay Eight Million Dollars ($8,000,000) to FAES upon the submission by FAES to Inspire of acceptable final QT study results. However, the milestone payment to be made by Inspire to FAES upon regulatory approval in the United States of an applicable oral bilastine product for the treatment of allergic rhinitis with an acceptable primary label will be increased by Eight Million Dollars ($8,000,000). Also, Inspire’s obligation to pay FAES a milestone payment of Two Million Dollars ($2,000,000) upon completion of the first Phase 3 clinical trial of an oral bilastine product candidate has been deleted and replaced with an obligation that Inspire pay FAES Two Million Dollars ($2,000,000) upon Inspire’s receipt of notice from the U.S. Food and Drug Administration (“FDA”) that its New Drug Application seeking regulatory approval of an applicable oral bilastine product has been deemed acceptable for filing and filed by the FDA.

Item 8.01 Other Events.

On June 20, 2007, Inspire issued a press release, attached to and made part of this report, announcing the Amendment.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

No.	Description
99.1	Press Release, dated June 20, 2007

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, 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: June 20, 2007

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EXHIBIT INDEX

No.	Description
99.1	Press Release, dated June 20, 2007

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EX-99.1

Exhibit 99.1

For Immediate Release

Investor Contact:	Media Contact:
Inspire Pharmaceuticals, Inc.	BMC Communications
Jenny Kobin,	Dan Budwick
VP, Investor Relations and Corporate Communications (919) 941-9777, Extension 219	(212) 477-9007, Extension 14

INSPIRE AND FAES FARMA AMEND BILASTINE LICENSING AGREEMENT

DURHAM, NC – June 20, 2007—Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) and FAES Farma, S.A. have amended their licensing agreement for the U.S. and Canadian development and commercialization of oral bilastine for the treatment of allergic rhinitis, based on a meeting with the Pulmonary Division of the U.S. Food and Drug Administration (FDA) in which the existing clinical data and recent QT/QTc trial results were discussed.

In consultation with Inspire, FAES has agreed to conduct additional clinical work and an expanded QT/QTc comparative trial, which will likely include an FDA-approved antihistamine. These additional trials are intended to strengthen the overall clinical package, based on feedback from the FDA.

Inspire will have no financial obligations for the oral program while FAES is conducting the additional clinical work. As a result, Inspire expects to decrease estimated cash expenditures by approximately $14 million in 2007, including an $8 million milestone payment that had been anticipated in 2007.

Inspire completed the initial licensing agreement with FAES Farma in October 2006 for the exclusive rights to develop and commercialize both the oral and ophthalmic formulations of bilastine in various territories. Inspire will continue to hold the U.S. Investigational New Drug (IND) application for oral bilastine and will work with FAES over the next year to evaluate the additional clinical data that will determine the appropriate NDA filing strategy. Beginning in December 2007, FAES has the option to discontinue the additional oral bilastine clinical work. Beginning at the same time, Inspire has the option to terminate the agreement, in whole or in part, with no further expense.

Inspire plans to continue to fund the preclinical development of an ophthalmic formulation of bilastine for the treatment of allergic conjunctivitis.

4222 Emperor Boulevard, Suite 200 ·Durham, North Carolina 27703 Telephone 919.941.9777 · Fax 919.941.9797

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 employs a U.S. sales force for the promotion of AzaSite^™ (azithromycin ophthalmic solution) 1% for bacterial conjunctivitis, Elestat^® (epinastine HCl ophthalmic solution) 0.05% for allergic conjunctivitis and Restasis^® (cyclosporine ophthalmic emulsion) 0.05% for dry eye. Inspire is focused on the therapeutic areas of ophthalmology and respiratory/allergy, and is developing products for dry eye, cystic fibrosis, allergic rhinitis and glaucoma. Elestat and Restasis are trademarks owned by Allergan, Inc. AzaSite is a trademark owned by InSite Vision Incorporated. For more information, 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. Specifically, no assurances can be made with respect to: the timing, structure or outcome of FAES’s additional clinical work including any QT/QTc comparative trial, the inclusion of an FDA-approved antihistamine in such trial, the timing of future financial obligations for the oral bilastine program, the timing of any termination of the license agreement, as amended, or any portion thereof, between Inspire and FAES, actual decreases in 2007 cash expenditures, and the timing or outcome of preclinical development of an ophthalmic formulation of bilastine. 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 the amount of net sales of Restasis recorded by Allergan in 2007, the Company’s 2007 financial results, including without limitation aggregate revenue, aggregate expenses, research and development expenses, selling and marketing expenses, general and administrative expenses, as well as the impact of the anticipated AzaSite launch, including without limitation headcount changes, related stock-based compensation expense changes, a draw on the Company’s existing debt facility, the timing of any revised guidance, the timing and success of any additional capital raising activities, 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 the U.S. Food and Drug Administration. 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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4222 Emperor Boulevard, Suite 200 ·Durham, North Carolina 27703 Telephone 919.941.9777 · Fax 919.941.9797

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