Inspire Pharmaceuticals (Nasdaq: ISPH), which recently drew back on drug exploration efforts outside of eye-related products, is being sold.

Drug giant Merck (NYSE: MRK) and Inspire, which recently moved to Raleigh from Durham, said Tuesday morning that Merck would acquire Inspire in a deal worth $430 million.

The deal set off a frenzy on Wall Street with 55 million Inspire shares being traded. The average daily volume was 1.8 million.

Merck already has a strong presence in the Triangle, operating a huge vaccine production plant in Durham.

The share price of Inspire collapsed in January when Inspire announced a cystic fibrosis drug had failed in a clinical trial. Shares fell 59 percent to under $3.50, and the company shortly thereafter reorganized, cutting scores of jobs.

The boards at both firms as well as Warburg Pincus Private Equity, a major Inspire investor, have already approved the deal. The private equity firm owns 28 percent of Inspire’s shares.

Inspire shareholders will receive $5 per share, which represents a 26 percent premium over the closing price on April 4.

The news sent Inspire shares up 25 percent in late-morning trading to $4.97, up 99 cents. Shares opened at $4.98, up $1 from Monday’s close. The high for the day was $4.99.

“Merck continues to build upon its long-term commitment to improving therapeutic options for the treatment of eye diseases,” said Beverly Lybrand, senior vice president and general manager, neuroscience and ophthalmology at Merck, in a statement. “This acquisition combines the talented commercialization organization at Inspire with the excellent team already in place at Merck thereby strengthening our ophthalmology business and positioning us for future growth with an expanded portfolio. This deal helps address the needs of patients and customers in ophthalmology and creates value for both companies.”

Inspire’s most important product is Azasite, which fights pinkeye.

Azasite had $13.2 million in revenue during the fourth quarter. Inspire also makes the dry-eye treatment Restasis, which is sold by Allergan, and Elestat, which treats itchiness caused by allergy-related pinkeye.

The company had overall revenue of $30.2 million during the fourth quarter. In January, it said it would cut 65 jobs, or 27 percent of its work force, and concentrate on eye care drugs after the failure of an experimental cystic fibrosis treatment. The move followed the failure of denufosol in a late-stage clinical trial. Denusofol was designed to treat cystic fibrosis, a genetic condition that causes thick mucus buildup in the lungs.

Inspire shares have traded as low as $3.43 and as high as $8.74 over the past year.

“As one of the world’s leading healthcare companies, Merck is the ideal partner to enhance the long-term potential of Inspire’s portfolio of ophthalmic assets,” said Inspire Chief Executive Officer Adrian Adams in a statement.

Get the latest news alerts: Follow WRAL Tech Wire at Twitter.

(The Associated Press contributed to this report.)