Shares in Inspire Pharmaceuticals fell 10 percent, or 71 cents, Wednesday after the company disclosed that losses in the first quarter soared.

Inspire also revised its financial guidance for the year, forecasting a sharp increase in revenues as well as expenses.

The news sent Inspire (NASDAQ: ISPH) down to a closing price of $6.52. More than 800,000 shares were traded, which was more than double the normal volume.

Revenues in the first quarter increased to $7.2 million compared with $5.5 million a year ago based on increasing sales of two eye drugs (Elestat and Restasis) as well as research revenues.

However, expenses soared 64 percent to $33.9 million from $20.7 million.

The biggest factor in the increase was a $13 million payment to InSite Vision for U.S. and Canadian rights to the eye drug AzaSite. The Food and Drug Administration approved the drug last week. Inspire plans to add personnel and launch sales of AzaSite in the third quarter.

The first-quarter loss of $26.1 million, or 62 cents per share, was nearly double the $14 million/33 cent per share loss of a year ago.

“We believe 2007 will be an exciting year for Inspire, as we add to our revenue base with the launch of AzaSite later this year,” Chief Executive Officer Christy Shaffer said in a statement. “We are also progressing our product pipeline with numerous activities in clinical development, including initiating and completing various trials and conducting meetings with the FDA related to several programs.”

Inspire forecast revenues for 2007 to be between $45 million and $57 million, based on the approval of AzaSite and current sales trends for Elestat and Restasis.

It also said expenses would range between $120 million and $145 million, including a $19 million payment due to InSite now that AzaSite has received FDA approval.