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After Cuts, Inspire to Pay Bonuses

After Cuts, Inspire to Pay Bonuses [the News & Observer, Raleigh, N.C.]

From News & Observer (Raleigh, NC) (March 19, 2011)

March 19--Inspire Pharmaceuticals plans to pay every remaining employee a retention bonus after the Raleigh drug-development company restructured its operations and slashed jobs.

The amount for each employee will be based on various factors, including current position and salary. Employees will receive the bonuses only if they stay with Inspire for at least the next year.

CEO Adrian Adams will be eligible for $812,500, on top of other compensation, Inspire reported in a Securities and Exchange Commission filing. Chief administrative and legal officer Andrew Koven will receive $398,400.

The company's board must believe that the bonuses were necessary to keep employees focused during a time of turmoil, said Irina Rivkind, an analyst who follows Inspire's stock for Duncan Williams in New York.

But with many large pharmaceutical companies, including Pfizer and GlaxoSmithKline, cutting salespeople, scientists and other staff, it's increasingly difficult for Inspire workers to find new jobs if they decide to leave.

"I'm not sure that retention bonuses were necessary to keep the company intact," Rivkind said.

Last month, Inspire announced it would cut about a quarter of its work force, or 65 jobs, after it abandoned efforts to develop an experimental treatment for cystic fibrosis. Most of those workers were let go at the end of February.

Before that drug had disappointing results in a clinical trial, Adams had projected that it would be a foundation for developing more respiratory medicines. It was a major setback for one of the Triangle's successful drug-development companies.

Inspire instead will redouble efforts to expand its existing eye care business. The bonuses are designed to make sure that it doesn't lose employees, including its team of sales representatives, as it shifts strategy.

"In light of recent events, including Inspire's revised strategic direction and recent restructuring, the Board wanted to provide financial incentives to employees to remain with Inspire during the implementation of the revised strategic direction," spokeswoman Cara Amoroso said in a statement.

She declined to comment on how much Inspire expects to pay in retention bonuses. Inspire had about $94 million in cash as of Dec. 31. The layoffs and restructuring are expected to save more than $40 million this year.

Inspire now employs about 175 people, including about 60 at its new headquarters, near the Brier Creek area of North Raleigh. The company shifted its operations from Durham in January.

Inspire shares closed unchanged Friday at $3.62. The stock is down 40 percent in the past year. or 919-829-4572

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Posted: March 2011