Inhale Shares Fall 22% on Insulin Product Concerns

Inhale Therapeutic Systems Inc. shares fell 22% Monday after research raised concerns about the effects of an inhaled insulin product the company is developing with Pfizer Inc. and Aventis.

Shares of San Carlos-based Inhale fell $7.62 to close at $27.03 on Nasdaq. Inhaled insulin research from the final stage of testing on people was shown for the first time Sunday at the American Diabetes Assn.’s annual meeting.

Patients on a combination of inhaled and injected insulin produced more antibodies, a component of the immune system, to the drug than those who relied on only injections, the companies said. Analysts said the higher level of antibody production could be a sign of increased potential for side effects, although none were directly linked.

“It’s hard to interpret the data, and it makes you wonder if inhaled insulin causes some kind of systemic reaction,” said Tim Anderson, an analyst with Prudential Securities. “It raises more concern” about the product.

Shares of companies working on similar devices also fell. Alkermes Inc., which has a partnership with Eli Lilly & Co., fell $2.10 to close at $35 on Nasdaq. Aradigm Corp., which is working with Novo Nordisk, fell 53 cents to close at $6.57, also on Nasdaq.

Doctors and investors have been watching inhaled insulin studies for signs of potential side effects. One case of pulmonary fibrosis, a kind of lung scarring, was reported this year in the more than 1,000 inhaled insulin patients, although it wasn’t linked conclusively to the drug.