At Press Time

Inspire Has Big Aspirations

$75 Million Warburg Pincus Investment Spurs Growth.

By Jerry Helzner, Senior Editor

■ In May, when private equity firm Warburg Pincus made its ultimately successful $3.7 billion offer to acquire Bausch & Lomb, the move drew headlines on Wall Street. In July, when Warburg Pincus made a $75 million investment in specialty pharmaceutical firm Inspire Pharmaceuticals, that major vote of confidence in Inspire's future went largely unnoticed.

However, the excitement at Inspire is palpable. The huge cash infusion, which gave Warburg Pincus an approximately 25% ownership stake in the Durham, N.C.-based company and a seat on Inspire's board of directors, has enabled Inspire to beef up its sales force, fund a strong launch of its new topical antibiotic AzaSite and pursue new opportunities to develop or license additional drug candidates.

"We are now able to function as a vertically integrated specialty pharmaceutical company," says Jenny Kobin, Inspire's vice president of corporate communications.

Prior to Warburg Pincus entering the picture, Inspire was already partnering with Allergan on two drugs, Restasis for dry eye Elestat for ocular allergies. However, with recently launched AzaSite, Inspire is for the first time totally responsible for all aspects of a drug's manufacturing, sales and marketing.

"AzaSite is a novel formulation of azithromycin that uses the DuraSite drug-delivery system," says Kobin. "It is a gel while in the bottle but comes out of the bottle in the form of a viscous eyedrop. It stays on the surface of the eye longer than a regular eye drop and is more effective and patientfriendly than an ointment. Because it stays on the eye longer it only needs to be applied twice on the first 2 days and q.d. thereafter. This gives it a major advantage over other topical antibiotics that need to be applied multiple times each day."

Inspire believes the less-frequent dosing of AzaSite will make it a popular choice for ophthalmologists, optometrists and pediatricians.

"The AzaSite launch was in August and sales are building," says Kobin. "We are doing a lot of physician education, explaining the of AzaSite. The feedback has been highly positive."

Inspire also has a dry eye drug, Prolacria, that completed a phase 3 trial and has been given "approvable" status from the FDA pending an additional confirmatory study.

Additionally, Inspire has a glaucoma treatment in a phase 1 trial. The drug was developed by Paul Kaufman, M.D., of the University of Wisconsin, a leading glaucoma specialist.

Kobin says Warburg Pincus held extensive exploratory meetings with Inspire management before making its financial commitment.

"They like our strategy. They saw what we have been doing," concludes Kobin. "They basically saw Inspire as an undervalued company with potential to grow into a fully integrated specialty pharmaceutical company."

Eye Care Comes in a Ship Shape

Ophthalmologists Take Their Humanitarian Efforts to Sea.

By Leslie Goldberg, Associate Editor

GIVING BACK:

■ Glenn Strauss, M.D., first became involved with Mercy Ships in 1997 through the church he was attending. He thought the idea of using a ship to provide eye care in the developing world was fascinating. "Having experienced what it is like to try to deliver ophthalmic surgical care where it is very spartan, the possibility of doing higher quality care on a ship was intriguing," says Dr. Strauss.

Mercy Ships had its beginnings in 1978 when Don and Deyon Stephens began the process of finding a vessel to fulfill their dream of creating a hospital ship serving the world's poor. The Anastasis was selected and purchased. The Stephens then began recruiting the crew and raising funding to bring the Mercy Ship into compliance with international standards. Four years later, the transformation of the passenger ship into a hospital ship was complete and the Anastasis served those in need for almost 30 years. Mercy Ships later added other vessels.

The Mercy Ship's system was designed to mirror what Dr. Strauss was already doing in his surgery center, providing a variety of surgeries, primarily ophthalmic and maxillofacial reconstruction.

The Africa Mercy, the world's largest charity hospital ship, came on line in July of this year. Dr. Strauss was on board to perform the first surgical procedure. The Africa Mercy is designed for ophthalmic surgical care as well as maxillofacial reconstruction and repair of fistula tears — orthopedics is also being added.

The Africa Mercy has two ophthalmic operating rooms. "This allows us to better meet the demand of the population," says Dr. Strauss. "As we go from developing nation to developing nation, we have found that 2,000 to 3,000 people will show up for a mass screening. It is very common that seven out of 10 people are there for eye problems. The most common is cataract blindness. So, the surgical suites are set up to really focus in on doing quality cataract surgery."

Dr. Strauss and his Mercy Ships eye team with the first surgical patient on the Africa Mercy.

The ship has an advance team, that comes in at the invitation of the government. They have access to media — radio being the main form. The church is a huge network and provides and distributes flyers in a wide area — including the interior of the country. "Patients have great determination and some travel 2 to 3 days in order to be seen," says Dr. Strauss.

At any one time, 12 to 15 doctors are on board the ship. Most doctors and surgeons volunteer for 2 to 4 weeks. Currently, there is one maxillofacial surgeon who lives on board full time. There is also a crew doctor and a hospital doctor, both of whom are scheduled to serve for 2 years.

Since 2005, Dr. Strauss has served full time with Mercy Ships. He has an administrative role as well and approximately half his time on the ship and half in Texas. Dr. Strauss travels with his wife Kim, who works with patients pre- and postoperatively.

"One of our great success stories — beside performing 1,500 to 1,800 cataract surgeries in an 8-month period — is our mentoring strategy," explains Dr. Strauss. "We select translators who work with us in our mobile eye clinic, where we provide medical eyecare and screening." The translators go out into the clinics, run by Mercy Ships, and serve four different communities each week. "Over time, these translators were taught about eyecare health awareness and are now able to run the clinics on their own," says Dr. Strauss.

"I worked with and mentored several ophthalmic surgeons in these countries," says Dr. Strauss. "Our emphasis is to get these surgeons ready to provide quality care with what they have — that's the priority. We show them how to get high-quality results with low-tech strategies."

Since Mercy Ships' first stop in Africa in 1990, it has conducted programs in 12 countries on that continent.

All surgeons and doctors are volunteers. For more information on Mercy Ships, visit the Web site at www.mercyships.org.

AMO Strengthens Its Management Team

Michael Lambert is Named CFO.

■ Advanced Medical Optics, Inc. (AMO) said that Michael J. Lambert, 45, has joined the company as chief financial officer. Before Lambert's appointment, Richard (Randy) A. Meier, 48, held the positions of chief financial officer and chief operating officer at AMO. Meier will continue as AMO's chief operating officer and assume responsibility for management of the company's cataract/implant business and global customer services function, while maintaining his existing management responsibilities for AMO's eye care business and the company's global manufacturing and supply chain operations.

The appointment of Lambert adds depth to AMO's senior management team, addressing concerns that AMO did not have a deep enough management team to handle another major acquisition while at the same time continuing the process of integrating two other recent acquisitions, VISX and IntraLase. Such criticism, coming from a major AMO shareholder, was seen as contributing to AMO withdrawing from the bidding for Bausch & Lomb.

AMO said Lambert is a seasoned executive who brings to the company approximately 20 years of experience and a diverse financial background. Most recently, he was senior vice president and CFO of Quest Software, Inc. Prior to joining Quest in November 2004, Lambert was CFO at Quantum Corporation, and Nervewire, Inc., an Internet services firm. He was also CFO for a division of Lucent Technologies. Lambert holds an M.B.A. from Harvard and a bachelor's degree from Stonehill College.

"Michael is an outstanding addition to our executive leadership team," said Jim Mazzo, AMO chairman, president and chief executive officer. "He is an experienced leader with an excellent reputation and a deep understanding of the financial requirements of a public company with a global presence."

At AMO, Lambert will oversee the company's finance, accounting, tax, treasury and information technology functions and report directly to Mazzo.

C. Russell Trenary, III, 50, who was previously president of the company's cataract/implant business, has been named executive vice president of global public policy and medical education, encompassing all of AMO's businesses and product lines.