Inhale Therapeutic Systems and Pfizer Inc Enter Into Pulmonary Insulin Product Development and License Agreement

Business Wire, Jan 19, 1995

PALO ALTO, Calif.--(HealthWire)--Jan. 19, 1995--Inhale Therapeutic Systems (Nasdaq:INHL) announced today that it has signed an agreement with Pfizer Inc (NYSE:PFE) to collaborate on the development of insulin products using Inhale's non-invasive pulmonary drug delivery system for macromolecules.

Pfizer will receive worldwide commercialization rights in exchange for funding further R&D efforts and providing Inhale an up-front signing payment, milestone payments, and royalties on sales of products. In addition, Pfizer will make a total of $10 million in equity investments in Inhale including an initial $5 million equity investment at a 25% premium to market price and a second $5 million equity investment, also at a 25% market premium, conditional on achievement of a specified milestone. Inhale will also manufacture for Pfizer certain components of the pulmonary delivery system and insulin products. Final consummation of the agreement is contingent on expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976.

Both Inhale and Pfizer will dedicate resources to the collaboration. Pfizer will lead the clinical development effort. Following up on Inhale's already completed initial Phase I clinical trial, Pfizer expects to initiate further human trials during 1995. Inhale will develop dry powder insulin formulations, the powder processing technology used to produce the powders, and a portable inhalation device for delivering the powders to the patient. Inhale and Pfizer will collaborate on developing the technology used to fill the powders for use in the inhalation device.

Insulin is currently administered by injection. Inhale believes that a pulmonary insulin product could provide increased user convenience and result in greater patient compliance by reducing or in some cases eliminating injections. Worldwide sales of insulin were estimated to be $1.7 billion in 1992.

"We are extremely pleased that one of the world's leading pharmaceutical companies will be collaborating with Inhale on developing pulmonary insulin," stated Robert Chess, president and chief executive officer of Inhale. "Pfizer has a strong commitment to developing therapeutic agents for the treatment of diabetes and other metabolic diseases. This agreement is a further validation of our pulmonary delivery approach for peptides, proteins, and other macromolecules and is consistent with our strategy of forming alliances for specific drugs with demonstrated leaders in their fields."

Inhale stated it has completed a 24-person, single-dose Phase I study comparing subcutaneous injection with pulmonary delivery using the Inhale system in fasted, normal volunteers. The study indicated that pulmonary insulin was absorbed systemically and lowered blood glucose. "This clinical trial is the first in which our pulmonary delivery system was tested in humans," added Mr. Chess. "The results give us confidence in the feasibility of our approach."

Inhale's pulmonary drug delivery system administers fine, dry aerosol powders to the deep lung. From the deep lung, the aerosolized macromolecules are transported through the lung tissue to the bloodstream for systemic distribution.

Like insulin, most peptides, proteins, and other biotechnology-based products currently can only be delivered by injection. In a number of early-stage studies conducted in conjunction with partners and by itself, Inhale has tested the viability of deep lung delivery of macromolecules. The company currently has programs underway for several drug macromolecules including among others interferon alpha, alpha-1 antitrypsin, calcitonin, and heparin. In addition, through a collaboration with Immunex, Inhale's macromolecule pulmonary delivery system is currently undergoing Phase I/II clinical testing for administration of IL-1 receptor for the treatment of asthma.

Inhale Therapeutic Systems is developing a pulmonary drug delivery system applicable to a wide range of peptides, proteins, and other macromolecules currently delivered by injection for systemic and lung diseases. Inhale is designing its delivery system to integrate customized formulations and proprietary fine dry-powder processing and packaging with a proprietary inhalation device for efficient, reproducible deep-lung delivery of macromolecule drugs. Inhale is engaged in early-stage research, feasibility, and development collaborations with eight pharmaceutical and biotechnology companies to develop therapeutic products using its pulmonary delivery system. Founded in July 1990, Inhale began trading as a public company in May 1994.

CONTACT: Inhale Therapeutic Systems

Ajit Gill, 415/354-0700 Ext. 223

Burns McClellan Jr.

Clarence Swearngan Jr., 212/505-1919 (investors)

Justin Jackson, 415/399-4525 (media)