Inspire Pharmaceuticals (ISPH) revealed on Tuesday a widened first-quarter loss, though it still landed ahead of Wall Street estimates and said it looks forward to its pending merger with Merck (MRK).

The Durham, N.C.-based biopharmaceutical company posted a net loss of $17.6 million, or 21 cents a share, compared with a loss of $14.8 million, or 18 cents a share, in the same quarter last year, ahead of average analyst estimates polled by Thomson Reuters of a 22-cent loss.

Revenue for the maker of prescription drugs for ophthalmic and pulmonary diseases was $21.2 million, down slightly from $22.1 million in the year-earlier period, though still beating the Street’s view of $20.4 million.

Sales for the three months ended March 31 were assisted by a 26% improvement of Azasite. The drug was used as a substitute therapy in hospitals during a temporarily supply shortage of erythromycin ophthalmic ointment.

Offsetting the results were higher operating expenses due to the company’s overhaul, the discontinuation of its pulmonary therapeutic operations and fewer promotional revenues.

“During the quarter, we made progress towards achieving our 2011 objectives,” Inspire CEO Adrian Adams said in a statement. “We increased AZASITE prescription and revenue growth, continued enrollment in the Phase 2 blepharitis trial, completed a corporate restructuring and reorganization and delivered another quarter of strong financial performance.”

The company said last month that it has agreed to be acquired by Merck for about $420 million. Adams said the company was pleased to announce the proposed transaction and believes it offers the best prospect for enhancing shareholder value.

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