Inspire Pharmaceuticals, Inc., a biopharmaceutical company, and FAES Farma, S.A., a publicly traded Spanish pharmaceutical company, announced the signing of a licensing agreement for the US and Canadian development and commercialization of bilastine, a phase 3 oral antihistamine compound for the treatment or prevention of allergic rhinitis, a condition affecting approximately 40 million people in the United States.

Under the terms of the agreement, Inspire has acquired exclusive rights to further develop and commercialize oral formulations of bilastine in the United States and Canada, as well as the exclusive right to develop and commercialize the ocular formulation in various markets worldwide.

The agreement provides that Inspire will pay FAES an upfront license fee of $7 million and up to an additional $82 million of payments, contingent upon achievement of various development, regulatory and sales milestones. Inspire will also pay a royalty of 14-16 per cent on net sales of the oral formulations of bilastine in the United States and Canada, if approved by regulatory authorities.

Christy L. Shaffer, Ph.D., president and CEO of Inspire, commented, "Our collaboration with FAES represents an ideal strategic opportunity for Inspire. Bilastine expands our allergy franchise and will leverage our clinical development expertise and historical success of our commercial team. We have the opportunity to develop and commercialize multiple formulations of the compound for oral and ocular uses. We expect that bilastine can generate significant near-term revenues and bridge to the commercialization of other compounds in our pipeline. Based on the clinical profile to date, we believe that the oral formulations of bilastine, if approved by regulatory authorities, could generate more than $200 million dollars in peak sales in the $3 billion annual oral antihistamine market in the United States."

Dr. Francisco Quintanilla, managing director of FAES Farma, commented, "We are pleased to establish this partnership with Inspire, which will enable us to leverage the global opportunity for bilastine, an important compound that came from our internal research and development efforts. The allergy market in the United States represents a large and attractive revenue opportunity."

Bilastine is a new chemical entity (NCE) that is a non-sedating, highly selective H1-antihistamine with a U.S. composition of matter patent through 2017. FAES has assessed the efficacy, tolerability and safety of bilastine in the once-daily oral tablet formulation in multiple clinical trials, including two large, potentially pivotal Phase 3 seasonal allergic rhinitis trials in Europe that had positive outcomes. In these trials, bilastine appeared to have an attractive tolerability profile. Nearly 4,000 subjects have been studied in clinical trials to date. Multiple studies have been completed in the development of this compound, including standard toxicology, carcinogenicity, cardiac safety, and food and drug interaction studies. FAES announced the acceptance of an Investigational New Drug (IND) application by the US Food and Drug Administration (FDA) in April 2006 and there is currently an ongoing thorough QT/QTc study in the United States, which is frequently recommended by the FDA for oral antihistamines to confirm the cardiac safety profile. The results of this study are expected to be reported in the second quarter of 2007.

Inspire expects to request a meeting with the Pulmonary division of the FDA to discuss various aspects of the program. Following this meeting, Inspire plans to provide an update on requirements for approval and target timing for a New Drug Application (NDA) filing. Inspire anticipates conducting at least one additional trial in the United States to broaden the experience with the compound and to enhance the competitive position of the potential product.

Under the terms of the agreement, Inspire granted to FAES a right of first negotiation for commercialization in Spain and Portugal of Inspire's cystic fibrosis development compound, denufosol tetrasodium, if Inspire chooses to out-license the cystic fibrosis product on a regional basis.

Inspire and FAES intend to enter into a supply agreement in which FAES will supply to Inspire the bulk bilastine as active pharmaceutical ingredient (API) for Inspire's use in manufacturing, developing and commercializing the bilastine compound in final form. The parties will initiate negotiations of a supply agreement in good faith promptly after the closing. The supply agreement will contain commercially reasonable, mutually acceptable supply terms and provisions typical of similar supply arrangements.