Inhale Reports on Phase III Inhaled Insulin --Exubera-- Data Presented at American Diabetes Association Conference.

Business Editors/Health & Medical Writers

PHILADELPHIA--(BW HealthWire)--June 25, 2001

Inhale Therapeutic Systems, Inc. (Nasdaq:INHL) reported today on new data released from Phase III studies being conducted by Pfizer Inc. and Aventis Pharma with inhaled insulin (Exubera(TM)) using Inhale's advanced inhaleable technologies.

More patients with type 2 diabetes who were treated with inhaled insulin achieved the recommended blood glucose levels than patients who received only insulin injections, according to data presented by Priscilla Hollander, M.D., Ph.D., Medical Director at Baylor University Medical Center in Dallas and lead investigator for the multicenter Phase III clinical trial. The data were presented last evening at the American Diabetes Association's 61st Scientific Sessions in Philadelphia.

The six-month study involved 299 patients with type 2 diabetes who were divided into two groups. One group received inhaled insulin (Exubera(TM)) prior to meals plus a single bedtime dose of Ultralente (long-acting insulin); the other received a conventional regimen of insulin injections. The data showed that HbA1c levels decreased similarly in both groups and that inhaled insulin provided comparable glycemic control to that in the conventional subcutaneous insulin regimen. In addition, inhaled insulin achieved target HbA1c levels of less than 7.0% in a greater proportion of patients compared to injected insulin (46.9% of patients receiving inhaled insulin over 31.7% of patients receiving subcutaneous injections).

The HbA1c level reflects blood glucose readings over a period of several months; a level below 7.0% is the American Diabetes Association's recommended treatment target for patients with diabetes. Unless properly controlled, diabetes can result in serious medical complications that include kidney failure, blindness, impotence and cardiovascular and neurological disorders.

The frequency and nature of adverse events were comparable between groups. Pulmonary function tests showed no significant differences between patients receiving inhaled insulin versus those who received injections only. The most common respiratory clinical side effect reported among patients was cough, which was characterized as mild to moderate in nature. Patients who used inhaled insulin developed increased insulin antibody serum binding, but there did not appear to be any related clinical significance.

Conclusions reached by the study group suggested that treatment with inhaled insulin is effective and well tolerated in patients with type 2 diabetes. Further, the availability of inhaled insulin may lead to earlier introduction of insulin therapy and improved glycemic control in patients with type 2 diabetes.

Exubera(TM) is being developed for patients with type 1 and type 2 diabetes through a collaboration between Pfizer Inc and Aventis Pharma. The two companies have entered into a global agreement to co-develop, co-promote (where permitted by local law) and co-manufacture inhaled insulin. Pfizer is also in collaboration with Inhale, developers of the inhalation device and formulation process.

Inhale Therapeutic Systems, Inc. develops advanced drug delivery solutions for the biopharmaceutical industry. The Company is focused on two main opportunities: improved delivery of macromolecules, including peptides and proteins, such as insulin, and improved performance of drug powders. Inhale is pioneering inhaleable delivery of macromolecules, supercritical fluids processing for powder particle production and, upon approval of the acquisition of Shearwater, advanced PEGylation. The Company is currently collaborating with major pharmaceutical and biotechnology companies, including AstraZeneca, Biogen, Bristol-Myers Squibb, GlaxoSmithKline, Lilly and Pfizer.

This release contains forward-looking statements that reflect Inhale management's current views as to the company's business strategy, future products, product developments, and other future events and operations relating to the company. The forward-looking statements also involve uncertainties and risks that are detailed in Inhale's reports and other filings with the Securities and Exchange Commission, including its Form 10-K as amended for the year ending December 31, 2000 and its Form 10-Q for the quarter ended March 31, 2001. Actual results could differ materially from these forward-looking statements.