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Local Tech Wire

DURHAM, N.C. – A treatment for dry eye disease that (Nasdaq: ISPH) has failed in a Phase III clinical trial, the company said before the markets opened Thursday.

The news triggered a selloff of Inspire shares in pre-market trading. Shares plummeted 20 percent, or $1.32, to $5.29. Inspire had closed at $6.61 on Wednesday.

When trading began Thursday, shares hit as low as $5.25 before rebounding to $5.66 by late morning,

Inspire is developing the drug that if approved would be called Prolacria along with Allergan. Inspire has tried before to win approval for the compound and failed.

In a statement, Inspire said the compound “did not meet its primary or its secondary endpoint.”

“We have provided the top-line results from this trial to our partner Allergan and we will be conducting a thorough review of the program before determining next steps, if any,” said Inspire Chief Executive Officer Christy Shaffer in a statement.

The drug was tested over six weeks in 490 patients.

Inspire had hoped that the compound would produce “clearing” or “reduction in staining” in the central region of the cornea in patients when compared to those people in the trial who received a placebo.

In December 2005, the FDA told Inspire that trial results had not demonstrated efficacy.

The FDA also rejected it in December of 2004.