To: dgrebles who wrote (143 ) 5/17/2001 9:57:38 PM From: Skywatcher Read Replies (2) | Respond to of 179 LOS ANGELES, May 17 (Reuters) - Shares of Inhale Therapeutic Systems Inc. (NasdaqNM:INHL - news) fell as much as 15%percent on Thursday after a partner, Franco-German drug company Aventis SA AVE.N, said an experimental inhaled insulin therapy for diabetics may cause serious side effects, analysts said. San Carlos, California-based Inhale's shares are down $1.26, or more than 4 percent, to $27.50 after falling to $24.50 from $28.21. More than 5.6 million shares changed hands, considerably higher than the recent daily average of 687,365. Aventis SA , which makes the active ingredient in the inhaled insulin, Exubera, told analysts on Wednesday that one patient out of 1,000 that used the diabetes treatment, an alternative to injected insulin, had developed pulmonary thrombosis, or scarring of lung tissue. Exubera is being developed by Pfizer Inc. (NYSE:PFE - news), the largest U.S. drug maker. Pfizer and Aventis plan to file late this year with the U.S. Food and Drug Administration (FDA) for approval of the product. Earlier trials of Exubera, a dry powder form of insulin which is absorbed into the body through an aerosol made by Inhale Therapeutics, showed that it was as effective as injected insulin in patients with diabetes. ``We were aware of the one event and reported it to the FDA last year. Whether that was attributable to the drug is in question,'' Mariann Caprino, a spokeswoman for Pfizer, told Reuters. Pfizer's shares were up 24 cents at $44.86 on the New York Stock Exchange, while shares of Aventis were down 50 cents at $77.01. ``This disclosed observation could conceivably lead to a higher level of FDA scrutiny, potentially resulting in either a lengthier review time or even a request for additional safety data, which could involve further trials - a scenario that seems unlikely to us at this time,'' David Steinberg, an analyst at Deutsche Banc Alex. Brown, said in a report on Thursday. Responding to a question in a meeting with analysts, Aventis' research and development director said one patient had developed pulmonary thrombosis, a condition in which the air sacs of the lungs are gradually replaced by scar tissue. As the disease progresses, the increase in scar tissue interferes with the ability of the lungs to transfer oxygen to the bloodstream, making it harder to breath. ``This had been talked about in the industry, but yesterday was the first time it was acknowledged publicly,'' said Robert Hazlett, an analyst at Robertson Stephens, who has a ``long-term attractive'' recommendation on Inhale's stock and was at the analyst meeting. ``Our recommendation isn't stronger because we had been concerned about this type of side effect. We are cautiously optimistic that this therapy will work, but this is a new therapy and you are depositing an awful lot of insulin in the lung,'' he said. ``Using a risk benefit analysis, our view is that the incidence of pulmonary fibrosis in the Phase III program (based on Aventis' statement) appears to be the same rate as observed in the general population,'' Steinberg analyst said. He said Exubera was highly effective in studies done so far and maintained his ``strong buy'' rating on Inhale's stock. Diabetes affects 16 million people in the United States alone. The disease -- which leads to a decline in the body's level of insulin, needed to process sugar -- can lead to blindness and other afflictions. To date, it has been treated using insulin injections. I don't think this can hurt the IJX story...sounds like people are still going to need either injections or drug pumps. chris