Based on the aggregated intelligence of 160,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, baby biotech Inspire Pharmaceuticals (Nasdaq: ISPH) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Inspire's business and see what CAPS investors are saying about the stock right now.

Inspire facts

Headquarters (Founded)

Durham, N.C. (1993)

Market Cap

$572.4 million



Trailing-12-Month Revenue

$92.2 million


CEO Adrian Adams (since February 2010)
CFO Thomas Staab, II (since May 2003)

Return on Capital (Average, Past 3 Years)


1-Year Return



Novartis (NYSE: NVS)
Alcon (NYSE: ACL)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 18.5% of the 108 members who have rated Inspire believe the stock will underperform the S&P 500 going forward. These bears include All-Stars zzlangerhans and TSIF, both of whom are ranked in the top 1% of our community.

Two weeks ago, zzlangerhans showed skepticism over Inspire's recent approval for its dry-eye treatment diquafosol in Japan:

Is there an epidemic of dry eye in Japan I haven't heard about that will give the hundreds of millions in sales necessary to drive that kind of increase in market cap? I have a feeling that small victory won't outweigh the failures of Azasite and Prolacria earlier this year, and the share price will sink back down into the 5's where it belongs.

In a pitch from four days later, TSIF echoed that bearishness. Here's an excerpt:

Unfortunately, Inspire has not generated sufficient revenue on released products to maintain positive cash flow. ...

Regarding diquafasol in Japan, I believe the market is limited for and accrual to Inspire's bottomline is also limited. New drugs in the pipeline are facing a year or most likely longer for FDA review, and any approvals require lead time to profit. While Inspire has some revenue generating products and they are well ahead of some of their peers in cash flow, the 16% pop leaves me less than "inspired".

What do you think about Inspire, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Novartis is a Motley Fool Global Gains recommendation. The Fool's disclosure policy always gets a perfect score.