Inspire Pharmaceuticals, its stock trading at one fifth its price of one month ago, told analysts today that its revenue picture for this year is unclear.

The company’s lead drug candidate, INS365, a treatment for dry eye disease, did not fare as well as expected in its first Phase III clinical trial last year. Patients receiving only placebos in the trials experienced better than expected results.

When those results were announced Jan. 16, Inspire stock fell 73 percent, or $11.36, in one day, to $4.15.

The company said the trial results make its revenue picture for 2002 unclear. Inspire’s revenues are largely based on milestone payments from its drug development partners as it moves drug candidates through clinical trials. The unexpected set back in the Phase III trials of INS365 means further milestone payments from Allergan Inc. for developing INS365 are in doubt.

Inspire (Nasdaq:ISPH) reported a net loss of $23.1 million or 90 cents a common share for 2001, 7 cents more than analysts expected, according to Zack’s Investment Research.

In an earnings conference call, company officials said at its present burn rate, Inspire has enough cash to last 2 ½ years. The company also said its net loss for 2001 was less than it told analysts it expected in August last year.

The company said advancing its drug candidates to clinical development accounts for the $18.3 million increase in 2001 net loss compared with its net loss of $4.8 million, or 19 cents a share for 2000.

Inspire Chief Executive officer and President Christy L. Shaffer said the company is analyzing the data from that trial with Allergan, but it will be several months before it meets with the FDA to determine how to proceed with further trials of the drug.

Inspire said it expects both revenues and expenses to be lower in 2002 than they were in 2001.

Inspire has several drug candidates to treat eye and respiratory diseases by stimulating the body’s natural mucosal defense mechanisms against dust, pollutants and bacteria. The experimental treatments are in various stages of clinical development.

Inspire stock traded at $3.03, up a penny, mid-morning Thursday. It is still well off it’s 52-week high of $16.59. It had a low of $2.90 in the same period.