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<p align="center" style="border:none;margin:0in 0in .0001pt;padding:0in;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:16.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="border:none;margin:0in 0in .0001pt;padding:0in;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:16.0pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></b></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington, D.C.&#160; 20549</font></b></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:16.0pt;font-weight:bold;">FORM 8-K</font></b></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Current Report
Pursuant to Section 13 or 15(d) of the</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Securities
Exchange Act of 1934</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in 30.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date of Report (Date of earliest event reported): <b><font style="font-weight:bold;">March 19, 2002</font></b></font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:16.0pt;font-weight:bold;">Inhale
Therapeutic Systems, Inc.</font></b></p>

<p align="center" style="margin:0in 0in 24.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of registrant as specified in its charter)</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Delaware</font></b></p>

<p align="center" style="margin:0in 0in 56.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other jurisdiction of incorporation)</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:'Times New Roman';width:100.0%;">
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  <td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.36%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">000-23556</font></b></p>
  </td>
  <td width="7%" valign="top" style="padding:0in 0in 0in 0in;width:7.06%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:justify;">&nbsp;</p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">94-3134940</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.36%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File
  No.)</font></p>
  </td>
  <td width="7%" valign="top" style="padding:0in 0in 0in 0in;width:7.06%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:justify;">&nbsp;</p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(IRS Employer
  Identification No.)</font></p>
  </td>
 </tr>
</table>

<p align="left" style="margin:0in 0in 48.0pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">150 Industrial Road</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">San Carlos, CA 94070</font></b></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of principal executive offices and zip code)</font></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s telephone number, including area code: <b><font style="font-weight:bold;">(650)
631-3100</font></b></font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


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<p align="left" style="border:none;margin:0in 0in 12.0pt;padding:0in;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<!-- ZEQ.=1,SEQ=1,EFW="2074128",CP="INHALE THERAPEUTIC SYSTEMS, INC",DN="1",CHK=70864,FOLIO='',FILE="DISK032:[02PAL3.02PAL1423.EDGAR]8K_1423.CHC",USER="ILEONG",CD='Mar 20 18:23 2002' -->
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<p align="left" style="margin:0in 0in 12.0pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 5.&#160; Other Events</font></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On March 19, 2002, Inhale
Therapeutic Systems, Inc. (&#147;Inhale&#148;) and Alliance Pharmaceutical Corp.
(&#147;Alliance&#148;) announced that the two companies have expanded their agreement
regarding the PulmoSphere<sup>&#174;</sup> particle and particle processing
technology, aspects of which Inhale initially acquired from Alliance in
November, 1999.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inhale&#146;s press release,
dated March 19, 2002, titled &#147;Inhale Therapeutic Systems, Inc. and Alliance
Pharmaceutical Corp. Announce Supplemental Agreement for PulmoSphere<sup>&#174;</sup>
Technology&#148; is attached hereto as Exhibit 99.1.</font></p>

<p align="left" style="margin:0in 0in 12.0pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in 12.0pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 7.&#160; Financial Statements and Exhibits</font></b></p>

<p align="left" style="margin:0in 0in 12.0pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(c) Exhibits</font></b></p>

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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit Number</font></b></p>
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  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="85%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;width:85.7%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Description</font></b></p>
  </td>
 </tr>
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  <td width="11%" valign="top" style="border:none;padding:0in 5.4pt 0in 5.4pt;width:11.02%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 5.4pt 0in 5.4pt;width:3.3%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="85%" valign="top" style="border:none;padding:0in 5.4pt 0in 5.4pt;width:85.7%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Press Release titled
  &#147;Inhale Therapeutic Systems, Inc. and Alliance Pharmaceutical Corp. Announce
  Supplemental Agreement for PulmoSphere<sup>&#174;</sup> Technology&#148; dated March
  19, 2002.</font></p>
  </td>
 </tr>
</table>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURE</font></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
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  <td width="52%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:52.22%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">INHALE THERAPEUTIC SYSTEMS, INC.</font></b></p>
  </td>
 </tr>
 <tr>
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  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
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  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.44%;">
  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.78%;">
  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated: March 20, 2002</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.94%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.44%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="47%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:47.78%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Brigid A. Makes</font></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="top" style="padding:0in .7pt 0in .7pt;width:38.84%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.94%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.44%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="47%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:47.78%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Brigid A. Makes</font></p>
  </td>
 </tr>
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  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.94%;">
  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.44%;">
  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.78%;">
  <p align="left" style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
 </tr>
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  <td width="38%" valign="top" style="padding:0in .7pt 0in .7pt;width:38.84%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.94%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.44%;">
  <p align="left" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:left;">&nbsp;</p>
  </td>
  <td width="47%" valign="top" style="padding:0in .7pt 0in .7pt;width:47.78%;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer
  and Vice President (Principal Financial and Accounting Officer)</font></p>
  </td>
 </tr>
</table>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>a2074128zex-99_1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 99.1</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Contacts:</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gwen Rosenberg,
Alliance, Vice President, Corporate Communications, (858) 410-5275;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joyce Strand, Inhale, (650) 631-3138</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;layout-grid-mode:char;margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">Inhale
Therapeutic Systems, Inc. and Alliance Pharmaceutical Corp.</font></b></p>

<p style="font-weight:bold;layout-grid-mode:char;margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">Announce
Supplemental Agreement for PulmoSphere&#174; Technology</font></b></p>

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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">San Diego, CA, and San Carlos, CA, March 19, 2002</font></b><font size="2" style="font-size:10.0pt;">  <b><font style="font-weight:bold;">---</font></b>
Alliance Pharmaceutical Corp. (Nasdaq:ALLP) and Inhale Therapeutic Systems,
Inc. (Nasdaq:INHL) announced today that the two companies have expanded their
agreement regarding the PulmoSphere<sup>&#174;</sup> particle and particle
processing technology, aspects of which Inhale initially acquired from Alliance
in November, 1999.&#160; The<i><font style="font-style:italic;">  </font></i>PulmoSphere<i><font style="font-style:italic;">  </font></i>technology
is a particle formation method designed to enhance the performance of drugs
delivered via the lung in propellant-based metered-dose inhalers and dry powder
inhalers.&#160; As a result of the
supplemental agreement, Inhale has paid to Alliance $5.25 million in exchange
for rights beyond inhaleable applications and other considerations.</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under the terms of the supplemental
agreement, Inhale has the right to use the PulmoSphere technology for
alternative methods of delivery in addition to inhaleable applications.&#160; Further, Alliance assigned five new patent
applications covering methods of producing microparticles to Inhale.&#160; Alliance retains the rights to use the
technology on products to be instilled directly into the lung, and obtains the
rights to commercialize up to four products administered with inhalers, two of
which will be royalty-free.&#160; Inhale will
pay Alliance future milestone or royalty payments on a reduced number of
products developed by Inhale or its licensees utilizing the technology.&#160; Inhale has also purchased chemicals from
Alliance in accordance with the 1999 agreement and obtained an option to
purchase additional such material through September 2003.&#160; These chemicals are used in the production
of the PulmoSphere technology, and this purchase will allow Inhale to
accelerate its product development efforts.</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;Inhale has been very pleased with the
performance of the PulmoSphere technology for inhaled products.&#160; We have seen improved efficiency and
reproducibility results in several clinical trials, including, inhaled
tobramycin, a drug used in the treatment of cystic fibrosis; inhaled budesonide
for the treatment of asthma; and inhaled leuprolide for the treatment of
prostate cancer and endometriosis,&#148; said Ajit Gill, President and CEO of
Inhale.&#160; &#147;The expanded use of the
technology will enable us to offer the performance-enabling PulmoSphere to our
partners for a variety of indications and for different delivery routes.&#160; Such expansion will further Inhale&#146;s goal of
being a broad drug delivery company.&#148;</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;The PulmoSphere<i><font style="font-style:italic;">  </font></i>technology
was developed by Alliance as an outgrowth of our expertise with surface
chemistry, perfluorochemicals, emulsions, and spray dry manufacturing
processes,&#148; said Duane J. Roth, Chairman and CEO of Alliance.&#160; &#147;We are pleased that Alliance&#146;s continued
advancement of the technology has furthered our collaboration with Inhale.&#160; The supplemental agreement allows us to
obtain immediate financing and to participate in Inhale&#146;s success through</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">potential future
milestones and royalties.&#160; We also look
forward to developing our own products using this promising technology.&#148;</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Alliance
Pharmaceutical Corp. is developing therapeutic and diagnostic products based on
its perfluorochemical and surfactant technologies.&#160; Alliance&#146;s products are intended primarily for use during acute
care situations, including surgical, cardiology, and respiratory applications. </font><i><font size="2" style="font-size:10.0pt;font-style:italic;">Oxygent</font></i><sup><font size="2" style="font-size:10.0pt;">TM</font></sup><font size="2" style="font-size:10.0pt;"> (perflubron
emulsion), an intravenous oxygen carrier, is being developed in the United
States, Canada, and Europe in conjunction with Baxter Healthcare
Corporation.&#160; <i><font style="font-style:italic;">Imavist</font></i><sup>TM</sup>, an
ultrasound contrast agent awaiting final FDA approval, is being developed jointly by Alliance and Schering
AG, Germany, and will be marketed in the U.S. in partnership with Cardinal
Health, Inc.&#160; Additional information about the Company is
available on Alliance&#146;s web site at <u>www.allp.com</u>.</font></p>

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<p style="margin:0in -.9pt .0001pt 4.5pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inhale Therapeutic Systems,
Inc., provides a portfolio of leading performance-enabling drug delivery
technologies and expertise to help pharmaceutical and biotechnology companies
maximize the performance of their compounds. Inhale offers three leading drug
delivery platforms: a suite of technologies for the inhaleable delivery of
macromolecules and small molecules for systemic and local lung delivery;
supercritical fluid powder particle engineering to easily control particle size
for a variety of drug delivery applications; and PEGylation for enhanced
delivery performance of most major drug classes. The company is collaborating
with major pharmaceutical and biotechnology companies, including Amgen,
AstraZeneca, Aventis Behring, Bristol-Myers Squibb, Chiron, Enzon, GlaxoSmithKline,
Johnson &amp; Johnson, Lilly, Pfizer, Pharmacia, Roche, Schering-Plough and
Serono.&#160; Additional information about
Inhale is available on the company&#146;s web site at <u>www.inhale.com</u>.</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except
for historical information, the matters set forth in this release are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth herein,
including the availability of funding for development, the uncertainties
associated with the conduct of preclinical or clinical studies and the timing
or ability to investigate scientific data. Alliance refers you to cautionary
information contained in documents the Company files with the Securities and
Exchange Commission from time to time, including the last Form 10-K and Form
10-Q, and those risk factors set forth in the most recent registration
statement on Form S-3 (File No. 333-47032) and Form S-4 (File No.
333-49676).&#160; Alliance is under no
obligation (and expressly disclaims any obligation) to update or alter its
forward-looking statements, whether as a result of new information, future
events, or otherwise.</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This release contains
forward-looking statements that reflect the current views of Inhale management
as to future products, product development, and other future events and
operations. These forward-looking statements involve uncertainties and other
risks that are detailed in reports and other filings with the Securities and
Exchange Commission, including Forms 10-K, as amended for 2000. These documents
identify important factors that could cause the company&#146;s actual performance to
differ from current expectations, including the outcome of clinical trials,
regulatory review, manufacturing capabilities and marketing effectiveness.</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"># # #</font></p>

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