Inspire Withdraws From Allergan's Restasis Effort
Inspire has stopped co-promoting Restasis, the dry-eye drug launched by Allergan, according to the Triangle Business Journal. Inspire will still receive royalties on the drug at the same rate as before, but only as long as Allergan and Inspire continue work on a new dry-eye drug, Prolacria. That drug is currently stalled -- it's been turned down by the FDA twice and is now in its third attempt to get approval.
Inspire's SEC filing says that if the Prolacria joint-venture goes belly up, Inspire will regain the right to co-promote Restasis as long as it provides Allergan with 20 percent of Allergan's sales force. But that catch has a catch of its own:
If Inspire does not provide such number [of sales reps] the royalty payments due on net sales of Restasis® will be reduced by thirty percent (30%).Thus the deal provides a short-term advantage for Inspire -- it continues to receive the Restasis revenue without the expense of providing a sales force for it. But should Prolacria be abandoned by Allergan, it will be expensive for Inspire to jump back in with a sales force 20 percent the size of Allergan's. Thus Allergan may be in a position to force Inspire to accept the lower revenue rate. The Restasis franchise is a healthy one: Inspire's Restasis revenue in Q3 2008 was $7.8 million, compared to $6.5 million in 2007. Allergan's revenue for Restasis was $107 million, up 21.4 percent. Allergan forecast that Restasis sales would cap the year at $440 million.
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