In June 2001, Inspire entered into a joint license, development and marketing agreement with Allergan to develop and commercialize Prolacria™, the proposed U.S. trade name for diquafosol tetrasodium ophthalmic solution 2%. The agreement also granted Inspire the right to co-promote Restasis^® in the United States. Under the terms of the agreement, Allergan obtained an exclusive license to develop and commercialize Prolacria worldwide, with the exception of Japan and nine other Asian countries. In return, Inspire will receive co-promotion revenue from Allergan on net sales of Restasis and Prolacria, if any, worldwide, excluding most larger Asian markets. In December 2002, Restasis was approved for sale by the FDA and Allergan launched Restasis in the United States in April 2003. Inspire began receiving co-promotion revenue on net sales of Restasis in April 2004, and has received milestone payments under this agreement. In the third quarter of 2003, Inspire exercised the right under the Allergan agreement to co-promote Restasis and Prolacria. Inspire began promoting Restasis in January 2004 and will promote Prolacria if and when FDA approval is received.

In December 2003, Inspire entered into an agreement with Allergan to co-promote Elestat^® to ophthalmologists, optometrists and allergists in the United States. Elestat was approved by the FDA in October 2003 for the prevention of itching associated with allergic conjunctivitis. Inspire has the primary responsibility for selling, promotional and marketing activities of Elestat in the United States and are responsible for the associated costs. Inspire works with Allergan collaboratively on overall product strategy and management in the United States. Allergan records sales of Elestat and remains responsible for all other product costs, as well as retaining responsibility for all international marketing and selling activities. Allergan is responsible for supply chain management, managed healthcare, customer order processing and regulatory compliance. Under the terms of the agreement, Inspire paid Allergan an up-front payment and Allergan pays co-promotion revenue to Inspire on U.S. net sales of Elestat.

In February 2006, Inspire entered into a development and license agreement with Boehringer Ingelheim. The agreement grants Inspire certain exclusive rights to develop and market an intranasal dosage form of epinastine, in the United States and Canada, for the treatment or prevention of rhinitis.

In October 2002, Inspire entered into a study funding agreement with the CFFT, a non-profit drug development affiliate of the Cystic Fibrosis Foundation, for the funding of one Phase 2 clinical trial of the investigational drug denufosol tetrasodium, also referred to as INS37217 Respiratory, for the treatment of cystic fibrosis. Under the agreement, the CFFT provided the majority of funding of external costs for one Phase 2 clinical trial of denufosol in exchange for post-commercialization development and sales milestone payments.

In February 2007, Inspire entered into an exclusive licensing agreement with InSite Vision Incorporated for the U.S. and Canadian commercialization of AzaSite^® (azithromycin ophthalmic solution) 1%, a topical anti-infective product for the treatment of bacterial conjunctivitis. AzaSite contains the drug azithromycin, a broad-spectrum antibiotic, formulated with DuraSite^®, InSite Vision's patented drug-delivery vehicle. AzaSite was approved by the U.S. Food and Drug Administration (FDA) for the treatment of bacterial conjunctivitis in April 2007.

Inspire paid InSite Vision an upfront license fee of $13 million and an additional $19 million milestone payment that was contingent upon FDA approval. Inspire will pay a royalty on net sales of AzaSite for ocular infections in the U.S., as well as Canada if and when approved. The royalty rate will be 20% on net sales of AzaSite in the first two years of comercialization and 25% thereafter.

Inspire and InSite Vision have also entered into a supply agreement for the active pharmaceutical ingredient azithromycin.

Inspire's original technology was licensed from the University of North Carolina (UNC) based on respiratory research conducted by scientists in UNC's Cystic Fibrosis Research Center. Since 1995, there have been three licensing agreements between Inspire and UNC relating to the use of P2Y receptor agonists and antagonists.