By Randall Osborne

To move ahead with its programs for delivering drugs through pulmonary pathways, Inhale Therapeutic Systems Inc. plans a public offering of 1.5 million shares.

The Palo Alto, Calif.-based company could raise more than $48.5 million, based on the closing price of its stock (NASDAQ:INHL) Monday at $32.375. Inhale's shares ended the day up $2.125. After the offering, the company will have 15.3 million shares outstanding.

Inhale is adapting injected or infused large peptides and proteins for delivery in dry powder form through the lungs into the bloodstream. Four products are in clinical trials, including outpatient Phase II testing of inhaled insulin managed by one of Inhale's partners, Pfizer Inc., of New York.

Eleven other products in earlier stages of development include pulmonary treatments, already approved as injectables, for osteoporosis, genetic emphysema, reproductive disorders and hepatitis.

A broad collaboration with Baxter International, of Deerfield, Ill., uses the inhaler platform to deliver pulmonary forms of four undisclosed compounds. The pact, signed in March 1996 and worth up to $80 million, is the first to apply Inhale's technology to drugs other than peptides and proteins.

Inhale has 10 programs sponsored by partners including Pfizer; Baxter; Immunex, of Seattle; Eli Lilly and Co., of Indianapolis; and Centeon L.L.C., of King of Prussia, Pa.

The deal with Lilly for an osteoporosis treatment is worth up to $20 million, and a Phase I trial of the aerosolized drug was completed in January. (See BioWorld Today, Jan. 22, 1997, p. 3.)

The pact with Centeon, worth up to $15 million, is to develop a pulmonary drug for Alpha-1 antitrypsin deficiency, a genetic disorder that leads to potentially fatal neonatal cirrhosis in infants and emphysema in adults. (See BioWorld Today, Jan. 15, 1997, p. 1.)

Underwriters for Inhale's proposed offering are Lehman Brothers Inc., of New York; BancAmerica Robertson Stephens and Volpe Brown Whelan & Co., both of San Francisco; and Vector Securities International Inc., of Deerfield, Ill.

As of September 30, Inhale had $57.659 million in cash and equivalents. For the first nine months of 1997, the company recorded a net loss of $7 million. *