2008-05-16 13:36:56 -

www.inspirepharm.com - Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today the receipt of a $1.25 million milestone payment from its Asian dry eye partner, Santen Pharmaceutical Co., Ltd., related to the completion of Santen's Phase 3 testing of diquafosol tetrasodium, referred to as DE-089, for the treatment of dry eye. Santen has announced that it expects to file

an application by the end of June 2008 for marketing approval in Japan.

Inspire and Santen have a collaborative agreement for the license, development and supply for diquafosol for the therapeutic treatment of ocular surface diseases, including dry eye, in Japan, China, South Korea, the Philippines, Thailand, Vietnam, Taiwan, Singapore, Malaysia and Indonesia. If the product is approved by regulatory authorities, Santen will be responsible for commercialization of the product in the designated countries and Inspire will receive royalties on net sales of the product, based on undisclosed rates specified in the agreement.

Christy L. Shaffer, Ph.D., President and CEO of Inspire, stated, "Santen has been successful in developing and commercializing ophthalmic products in Japan. We are pleased that Santen is moving rapidly toward a Japanese marketing application, which could lead to a meaningful royalty stream for Inspire, if the product is approved."

About Inspire

Inspire is a biopharmaceutical company dedicated to discovering, developing and commercializing prescription pharmaceutical products for diseases in the ophthalmic and respiratory areas. Inspire is currently developing products for dry eye, cystic fibrosis and glaucoma. Inspire employs a U.S. sales force for the promotion of AzaSite(R) (azithromycin ophthalmic solution) 1% for bacterial conjunctivitis, Elestat(R) (epinastine HCI ophthalmic solution) 0.05% for allergic conjunctivitis and Restasis(R) (cyclosporine ophthalmic emulsion) 0.05% for dry eye. Elestat, Restasis and Prolacria 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 or outcome of Santen's regulatory application for marketing approval for diquafosol in Japan, the success of a product if marketing approval is received in Japan, including without limitation, the size or meaningfulness of the royalty stream, any decision by Santen to seek regulatory approval in any other Asian country, the timing or outcome of any application for approval in any other jurisdiction, and the success of a product if marketing approval is sought and received in any other applicable Asian country. 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 commercialization of AzaSite, Restasis and 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.

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