Aradigm Corporation has developed an inhaled form of insulin using its proprietary AERx®drug delivery system. The system uses liquid insulin that is converted into an aerosol containing very small particles (1–3μ in diameter), and an electronic device suitable for either the rapid transfer of molecules of insulin into the bloodstream or localised delivery within the lung. The AERx®insulin Diabetes Management System (iDMS), AERx®iDMS, instructs the user on breathing technique to achieve the best results.Aradigm Corporation and Novo Nordisk have signed an agreement to jointly develop a pulmonary delivery system for insulin [AERx®iDMS, NN 1998].Under the terms of the agreement, Novo Nordisk has exclusive rights for worldwide marketing of any products resulting from the development programme. Aradigm Corporation will initially manufacture the product covered by the agreement, and in return will receive a share of the overall gross profits from Novo Nordisk's sales. Novo Nordisk will cover all development costs incurred by Aradigm Corporation while both parties will co-fund final development of the AERx®device.Both companies will explore the possibilities of the AERx®platform to deliver other compounds for the regulation of blood glucose levels. Additionally, the agreement gives Novo Nordisk an option to develop the technology for delivery of agents outside the diabetes area.In April 2001, Aradigm Corporation received a milestone payment from Novo Nordisk related to the completion of certain clinical and product development stages of the AERx®drug delivery system.Profil, a CRO in Germany, is cooperating with Aradigm and Novo Nordisk in the development of inhaled insulin.Aradigm and Novo Nordisk initiated a pivotal phase III study with inhaled insulin formulation in September 2002. This 24-month, 300-patient trial is evaluating inhaled insulin in comparison with insulin aspart. Both medications will be given three times daily before meals in addition to basal insulin administered once or twice daily.[1]In 2003, the US FDA adopted new GMP guidelines requiring sterile production of inhalation products and their devices. Novo Nordisk, therefore, will need to repeat phase III studies following device optimisation. These studies may begin at the end of 2004 and will include efficacy studies for 6–12 months and safety studies for up to 2 years (Lehman Brothers, Equity research, 7 August 2003).A phase IIb, 12-week clinical trial in 107 patients with type 2 diabetes was completed in the US. This trial was designed to compare the safety and efficacy of pulmonary insulin delivered via AERx®iDMS, with intensified treatment with subcutaneous insulin administered at mealtimes. The results of the study positively compared pulmonary insulin with intensified subcutaneous insulin.Aradigm Corporation has a total of 85 patents pertaining to its proprietary AERx®drug delivery system. Among those granted patents, 18 patents cover pulmonary insulin formulation including the method of patient breathing technique during pulmonary delivery of insulin. This patent guides patients on how to breathe in certain defined ways to achieve an effective amount and reproducibility of blood levels of insulin.