Clinical Development Program Anne B. Cropp, Pharm.D. Global Clinical Leader

2 Agenda Clinical Development Program Overview Clinical Pharmacology Efficacy Safety

3 Agenda Clinical Development Program Overview Clinical Pharmacology Efficacy Safety

4 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase E 103 E 104 E Phase 1 Studies Developmental 1001/ Phase 1 Studies Final Formulation FDA InteractionsPre- NDA Phase 3 Group II Phase 3b Exploratory Efficacy Long-term Safety

5 Clinical Development Program Adults – All Studies Study TypeINHSCOral Agents Total Clinical Pharmacology Studies Non-Diabetic Subjects Subjects with DM Subtotal Controlled Phase 2/3 Studies Type 1 Subjects Type 2 Subjects Subtotal All Phase 2/3 Studies Type 1 Subjects Type 2 Subjects Subtotal All Studies

6 Demographic Characteristics: INH-treated Adults in All Phase 2/3 Studies Type 1 N = 918 Type 2 N = 1580 Gender N (%) Male Female 513 (55.9) 405 (44.1) 991 (62.7) 589 (37.3) Age (Yr) Mean Range – – 80 Race N (%) White Hispanic Black Asian Other 825 (89.8) 48 (5.2) 27 (2.9) 7 (0.8) 11 (1.2) 1266 (80.1) 127 (8.0) 113 (7.2) 29 (1.8) 45 (2.9) BMI (kg/m 2 ) Mean Range – – 51

7 Duration of Exposure: INH-treated Adults in All Phase 2/3 Studies ExposureType 1 N = 918 Type 2 N = 1580 Total N = 2498 > 0 months > 3 months > 6 months > 1 year > 2 years > 3 years > 7 Years9615 Median Exposure (Subject-years) Overall Exposure (Subject-years)

8 Agenda Clinical Development Program Overview Clinical Pharmacology Efficacy Safety

9 Clinical Pharmacology Studies Using the Phase 3 Formulation of INH Study Type/CategoryStudy Number Pharmacokinetics and Relative Bioavailability Healthy Subjects 016, 017, 023, 1005, 1006, 1012, 1014, 1015, 1016, 1020 Subjects with type 1 DM021, 018 Subjects with type 2 DM1003, 1004, 1007 Special Populations Children/Adolescents with type 1 DM018 Elderly, Obese Subjects with type 2 DM1004 Gestational DM1007 Nondiabetic Subjects with COPD1005 Smokers Nondiabetic016, 1020 Type 2 DM1003 Japanese Subjects023, 1016 Pharmacodynamics Healthy Subjects017, 1016 Subjects with DM1003, 1004, 1007, 021, 1026 (Phase 3)

10 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

11 Oral Inhalation of INH Bioavailability 10% Relative to SC Insulin ~30% retained in blister/device ~20% deposited in oropharynx ~10% tracheobronchial ~40% to alveolar spaces Insulin absorption site Enzymatic degradation No preclinical or clinical evidence for accumulation

12 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

Mean Glucose Infusion Rate (% of Maximum) Time (min) INH 6 mg Insulin lispro 18 U Regular insulin 18 U INH Absorbed More Rapidly than SC Regular; as Rapidly as SC Lispro - Study 017 Diabetologia 2000;43(Suppl 1):A46.

14 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

15 Linear Increase in AUC with INH Dose Study x 3 mg 1 x 1 mg + 1 x 3 mg 3 mg 2 x 1 mg 1 mg Dose (mg) AUC (µU.min/mL) Arithmetic meansIndividual AUC values

16 Individual AUC Study 1012

17 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

18 3 X 1 mg  1 X 3 mg Median Changes in Concentrations of Serum Insulin Over Time by Treatment Median Concentration (uU/ml) Time (minutes) Ratio AUC 140% (90% Cl %) Ratio C max 127% (90% Cl %) 3x1 mg 1x3 mg

19 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

20 Clinical Pharmacology Bioavailability is approximately 10% relative to SC Absorbed more rapidly than SC regular insulin and as rapidly as SC insulin lispro Dose-separated and dose-linear exposure over 1 to 6 mg Three 1 mg blisters should not be substituted for one 3 mg blister Age, gender, race, and BMI have no effects on PK Smoking increases absorption rate and extent Bioavailability higher in COPD, lower in asthma Intra-subject variability of PK and PD comparable to SC regular insulin in subjects with DM

21 Agenda Clinical Development Program Overview Clinical Pharmacology Efficacy Safety

22 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase E 103 E 104 E 1001/ FDA InteractionsPre- NDA Phase 3 Group II Phase 3b Phase 1 Studies Developmental Phase 1 Studies Final Formulation 1017 Exploratory Efficacy Long-term Safety

23 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase E 103 E 104 E 1001/ FDA InteractionsPre- NDA Phase 3 Group II Phase 3b Phase 1 Studies Developmental Phase 1 Studies Final Formulation Type 1 DM Intensive Standard Exploratory Efficacy Long-term Safety

24 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase E 103 E 104 E 1001/ FDA InteractionsPre- NDA Phase 3 Group II Phase 3b Phase 1 Studies Developmental Phase 1 Studies Final Formulation 1017 Exploratory Efficacy Long-term Safety Type 2 DM Insulin Using INH Rx Basal-bolus

25 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase E 103 E 104 E 1001/ FDA InteractionsPre- NDA Phase 3 Group II Phase 3b Phase 1 Studies Developmental Phase 1 Studies Final Formulation Exploratory Efficacy Long-term Safety Type 2 DM Oral Agents INH Rx INH alone INH + OA /1002

26 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) 102 Type 1 Favors INHFavors Comp

27 Type (  18 years) 107 (  18 years) 102 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) Favors INHFavors Comp

28 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Type 1 Type 2 Insulin Using Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) (  18 years) 107 (  18 years) 102 Favors INHFavors Comp

29 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Type 1 Type 2 Insulin Using Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) (  18 years) 107 (  18 years) Favors INHFavors Comp

30 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Type 1 Type 2 Insulin Using Type 2 Non-Insulin Using Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) (  18 years) 107 (  18 years) Favors INHFavors Comp

31 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) (  18 years) 107 (  18 years) Type 1 Type 2 Insulin Using Type 2 Non-Insulin Using (INH + OA vs. OA) 109 (INH vs. OA) 1001 High Stratum High Stratum Favors INHFavors Comp

32 Primary Endpoint: HbA 1c Change from Baseline Mean Treatment Group Differences, 95% CI Adjusted Treatment Group Differences (INH-Comparator) in Change from Baseline in HbA 1c (%) (  18 years) 107 (  18 years) Type 1 Type 2 Insulin Using Type 2 Non-Insulin Using (INH + OA vs. OA) 109 (INH vs. OA) 1001 High Stratum High Stratum 1001 Low Stratum 1002 Low Stratum Favors INHFavors Comp

33 Clinical Development Program IND 43313NDAEOP 2 Phase 2 Phase 3 Group I Phase Phase 1 Studies Developmental 1001/ Phase 1 Studies Final Formulation FDA InteractionsPre- NDA Phase 3 Group II Phase 3b E 103 E 104 E Exploratory Efficacy Long-term Safety

34 Efficacy Sustained Over 2 Years - Type 1 DM HbA 1C Secondary Endpoint - Study 1022 INH N SC N INH-SC (95% CI): Month (0.14, 0.40) Month 24 LOCF 0.25 (0.11, 0.39) Mean HbA1c % (SD) INH SC Insulin BaselineLOCF Months

35 Efficacy Sustained Over 2 Years – Type 2 DM Insulin Using HbA 1C Secondary Endpoint – Study 1029 INH N SC N INH-SC (95% CI): Month (-0.06, 0.22) Month 24 LOCF 0.09 (-0.07, 0.25) INH SC Insulin Mean HbA 1c % (SD) Months BaselineLOCF

36 INH N OA N Mean HbA 1c % (SD) Baseline Efficacy Sustained Over 2 Years – Type 2 DM Oral Agents HbA 1C Secondary Endpoint – Study 1001/1002

37 INH N = SC N = Prospective Pharmacodynamic Study in Type 1 DM Using Intensive Insulin Regimen - Study 1026 Maximum Postprandial Glucose Concentration (mg/dL) (Mean +/- SD) BaselineWeek 12Week 24 Mean HbA 1c % (SD) INH 6.79 (0.70)6.63 (0.79)6.73 (0.87) SC 7.13 (0.56)7.19 (0.85)7.08 (0.95) Heise T, Bott S, Tusek C, et al. The effect of insulin antibodies on the metabolic action of inhaled and subcutaneous insulin. Diabetes Care 2005;28:2161-9

38 Burden Convenience Flexibility Hassle Interference Pain Social Standardized Treatment Satisfaction Scale ranges from 0 to 100. Satisfaction Score: Mean Change (Baseline to Month 6) Diabetes Treatment Satisfaction Type 1 DM - Study 107, Intensive Insulin Regimen Regimen Outcomes Net Benefit WorsenedImproved Side Effects Efficacy Advocacy Preference General Satisfaction

39 Diabetes Treatment Satisfaction Type 2 DM - Study 109 WorsenedImproved Satisfaction Score: Mean Change (Baseline to Month 6) Standardized Treatment Satisfaction Scale ranges from 0 to 100. Burden Convenience Flexibility Hassle Interference Pain Social Regimen Outcomes Net Benefit Side Effects Efficacy Advocacy Preference General Satisfaction

40 Efficacy As effective as SC regular insulin in the treatment of patients with type 1 and insulin requiring type 2 DM Effective in type 2 DM used alone, in combination with basal insulin, and in combination with oral agent Sustained efficacy INH is patient - preferred therapy

41 Agenda Clinical Development Program Overview Clinical Pharmacology Efficacy Safety

42 Safety Adverse Events, Serious Adverse Events, and Deaths Hypoglycemia Pulmonary Safety Insulin Antibodies

43 Adverse Events - All Causality Patients with Type 1 DM - Controlled Phase 2/3 Studies Number (%) Subjects Preferred term INH N=698 SC N=705 Hypoglycemia676 (96.8)678 (96.2) Respiratory tract infection297 (42.6)292 (41.4) Cough increased204 (29.2)62 (8.8) Pharyngitis126 (18.1)112 (15.9) Tremor125 (17.9)129 (18.3) Flu syndrome114 (16.3)115 (16.3) Headache109 (15.6)113 (16.0) Rhinitis100 (14.3)72 (10.2) Accidental injury85 (12.2)83 (11.8) Asthenia82 (11.7)92 (13.0) Sinusitis70 (10.0)51 (7.2) Sweating62 (8.9)76 (10.8)

44 Adverse Events - All Causality Patients with Type 2 DM - Controlled Phase 2/3 Studies Number (%) Subjects Preferred term INH N=1279 SC N=488 OA N=644 Hypoglycemia792 (61.9)364 (74.6)185 (28.7) Respiratory tract infection365 (28.5)172 (35.2)127 (19.7) Cough increased275 (21.5)41 (8.4)24 (3.7) Tremor221 (17.3)96 (19.7)58 (9.0) Flu syndrome170 (13.3)64 (13.1)59 (9.2) Headache168 (13.1)36 (7.4)67 (10.4) Asthenia161 (12.6)70 (14.3)59 (9.2) Sweating148 (11.6)64 (13.1)42 (6.5) Dizziness142 (11.1)66 (13.5)38 (5.9) Back Pain103 (8.1)57 (11.7)40 (6.2) Accidental injury102 ( 8.0)62 (12.7)41 (6.4) Diarrhea93 (7.3)31 (6.4)68 (10.6)

45 Serious Adverse Events – All Causality Controlled Phase 2/3 Studies Patients with type 1 DM Number (events/1000 subject-months) Preferred TermINH N=698SC N=705 Hypoglycemia25 (3.5)36 (4.8) Loss of consciousness8 (1.1)12 (1.6) Myocardial infarction3 (0.4) Diabetic ketoacidosis3 (0.4)1 (0.1) Convulsion2 (0.3)8 (1.1) Depression05 (0.7) Patients with type 2 DM INH N=1279SC N=488OA N=644 Myocardial infarction11 (0.8)5 (0.8)7 (1.1) Chest pain7 (0.5)1 (0.2)4 (0.6) Angina6 (0.4)2 (0.3)5 (0.8) Hypoglycemia5 (0.4)13 (2.1)2 (0.3) Coronary artery disease5 (0.4)3 (0.5)0 Cellulitis4 (0.3)3 (0.5)0 Loss of consciousness3 (0.2)6 (1.0)1 (0.2)

46 Deaths 32 Total Deaths 28 Deaths During or  30 days of Dose 4 Deaths >30 days of Dose INH: 1 Comparator: 3 *Incidence Rate: Deaths/1000 Subject-Months Controlled Phase 2/3 INH: 9/1977 (0.44*) Comparator: 7/2012 (0.35*) Uncontrolled Extensions INH: 12/1449 (0.41*) Comparator: 0/45 (N/A*)

47 Safety Adverse Events, Serious Adverse Events, and Deaths Hypoglycemia Pulmonary Safety Insulin Antibodies

48 Hypoglycemic Events Controlled Phase 2/3 Studies N=487N=480N=757N=617 Events/Subject-Month N=691N=686 Type 1Type 2 Insulin Using at Entry Type 2 Non-Insulin Using at Entry INH Comparator 79.2%77.7%27.1%25.6%10.2%3.1% Proportion of Patients Reporting Hypoglycemia

49 HbA 1C and Hypoglycemic Events in Studies Using Intensive Insulin Regimens - Studies 107, 1022, 1026, and 1027 Events/Subject-Month Mean Baseline and End-of-Study HbA 1c (%) 107 w, w/o= with, without subject Events/100 Subject-Months IA INHSCINHSCINHSCINHSC N=103 N=288N=286N=23N=19N=95N=101 Baseline End-of Study Protocol-defined SHE INH Protocol-defined SHE SC FDA-defined HE INH FDA-defined HE SC w/o pooled pooled w

50 Hypoglycemic Event Rates in Patients with Type 1 DM – Presented by Duration of Study Participation INH SC Insulin Controlled Phase 2/3 Studies Events/ Subject-month Weeks since Randomization INH N SC N

51 Hypoglycemic Event Rates in Adults with Type 1 DM – Onset Time of Day Hour of Onset Controlled Phase 2/3 Studies Patients with Type 1 DM Age  18 Years INH N=691 SC N=686

52 Safety Adverse Events, Serious Adverse Events, and Deaths Hypoglycemia Pulmonary Safety Insulin Antibodies

53 Pulmonary Safety Pulmonary Function Tests Chest X-ray and High Resolution Computerized Tomography (HRCT) Respiratory Adverse Events

54 Pulmonary Function Tests Measurements of Lung Function: – Spirometry FEV 1, FVC, FEV 1 /FVC, PEFR, FEF25-75 – Lung Volumes TLC, VC, RV, FRC, RV/TLC – Diffusing Capacity DLco, VA (alveolar volume), DL/VA Forced Expiratory Volume in 1 second (FEV 1 ) – Standard spirometric endpoint sensitive to changes in airway function and lung volume – Expressed in liters (L) Carbon Monoxide Diffusing Capacity (DLco) – Standard clinical test performed to assess the gas exchanging capacity of the lung – Expressed in mL/min/mmHg

55 FEV 1 Change from Baseline (L) Adjusted Mean Treatment Group Differences and 95% CI Type 1 and Type 2 DM - Phase 2 Studies 102, 103, 104 Adjusted Mean Change from Baseline in FEV 1 (L) Type 2 Type 1 Favors ComparatorFavors INH

56 FEV 1 Change from Baseline (L) Adjusted Mean Treatment Group Differences and 95% CI for 3- and 6-Month Controlled PFT Phase 2/3 Studies Adjusted Mean Change from Baseline in FEV 1 (L) (  18 yrs) 107 (  18 yrs) (INH vs. OA) 109 (INH + OA vs. OA) Type 2 Type 1 Favors ComparatorFavors INH

57 Range of Percent Change from Baseline in FEV 1 Range of Percent Change from Baseline in FEV 1 Type 1 DM - Controlled PFT Phase 2/3 Studies 3 Months INH Comparator

58 Change from Baseline in FEV 1 (L) (Mean +/- SD) Visit (months) Baseline LOCF INH months: L/yr SC months: L/yr INH - SC (90% CI): (-0.022, 0.022) INH N SC N Change from Baseline in FEV 1 – Patients with Type 1 DM - Study 1022 INH 3-24 months: L/yr SC 3-24 months: L/yr INH - SC (90% CI): (-0.023, 0.002) INH SC Insulin INH 3-12 months: L/yr SC 3-12 months: L/yr INH - SC (90% CI): (-0.035, 0.016)

59 Change from Baseline in FEV 1 - Patients with Type 2 DM Insulin Using - Study 1029 INH 3-24 months: L/yr SC 3-24 months: L/yr INH-SC (90% CI): (-0.016, 0.016) INH N SC N Visit (months) BaselineLOCF Change from Baseline in FEV 1 (L) (Mean +/- SD) INH 3-12 months: L/yr SC 3-12 months: L/yr INH - SC (90% CI): (-0.010, 0.054) INH months: L/yr SC months: L/yr INH - SC (90% CI): (-0.030, 0.021) INH SC Insulin

60 Change from Baseline in FEV 1 – Patients with Type 2 DM Non-insulin Using - Studies 1001/1002 INH N Comparator N Change from Baseline in FEV 1 (L) (Mean +/- SD) Visit (Months) Comparative Baseline INH 6-24 months: L/yr Comp 6-24 months: L/yr INH-Comp (95% CI): (-0.032, 0.033) INH 6-12 months: L/yr Comp 6-12 months: L/yr INH-Comp (95% CI): (-0.013, 0.206) INH months: L/yr Comp months: L/yr INH-Comp (95% CI): (-0.069, 0.026) INH Comparator

61 Comparative 12 weeks Withdrawal 12 weeks FEV 1 Change Characterization – Onset and Resolution in Type 1 DM - Study 1027 Randomization INH TID + BasalSC SC BID-TID + Basal SC

62 FEV 1 Change Characterization – Onset and Resolution in Type 1 DM - Study 1027 Comparative Baseline Visit (weeks) INH N SC N Mean Change from Baseline in Preinsulin FEV 1 (L) (Mean +/- SD) INH SC Insulin

63 FEV 1 Change Characterization – Onset and Resolution in Type 1 DM - Study 1027 ComparativeWithdrawal Baseline Visit (weeks) INH N SC N Mean Change from Baseline in Preinsulin FEV 1 (L) (Mean +/- SD) INH SC Insulin INH SC Insulin

64 Comparative Change from Baseline in FEV 1 – Patients with Type 2 DM Non-insulin Using - Studies 1001/1002 INH Comparator INH N Comparator N Visit (Months) Baseline Change from Baseline in FEV 1 (L) (Mean +/- SD)

65 Comparative Change from Baseline in FEV 1 – Patients with Type 2 DM Non-insulin Using - Studies 1001/1002 INH Comparator INH N Comparator N Withdrawal Phase INH Comparator Visit (Months) Baseline Visit (Weeks) Change from Baseline in FEV 1 (L) (Mean +/- SD)

66 INH Withdrawal 6 months SC insulin or OA FEV 1 Change Characterization – Withdrawal in Patients with Type 1 and Type 2 DM - Study 111 Studies 106, 107, 108, 109, 110, and 1009 Study 111 Uncontrolled Extension 3 months - 3 years Controlled Phase 3 Group I Studies month

67 FEV 1 Change Characterization – Increases Following Withdrawal in Adult Patients with Type 1 and Type 2 DM - Study 111 Continued N = 115, Discontinued N = 122, Type 1Type 2 Continued INH Discontinued INH Change from Baseline in FEV 1 (L) Mean +/- SD) 1 1 Continued N = 198, Discontinued N = 203, Duration of Treatment (Months)

68 Pulmonary Function Tests – Summary INH-associated decreases in FEV 1 – Occur early upon initiation of INH therapy – Are small in magnitude (approximately 1 to 1.5 % of baseline) – Are not driven by outlier subjects with large changes – Are non-progressive with long-term INH administration – Resolve upon discontinuation of INH

69 Pulmonary Safety Pulmonary Function Tests Chest X-ray and High Resolution Computerized Tomography (HRCT) Respiratory Adverse Events

70 Chest X-ray Changes - Baseline to Last Observation Controlled Phase 2/3 Studies Less Abnormal N = 2 More Abnormal N = 52 Change at Last Observation 1 : INH 54/1505 (3.6%) SC 15/909 (1.7%) Oral Agent 11/420 (2.6%) 1 NDA cut-off, ongoing and completed studies

71 Follow-Up Imaging: 25 Resolved 22 On INH 18 Off INH 4 Lung CA 1 Thymoma 1 Mild Fibrosis 1 6 Resolved 6 On INH 3 Off INH 3 6 Chest X-ray Changes - Baseline to Last Observation Controlled Phase 2/3 Studies Localized to: Lung Parenchyma 29 Lung Vasculature 6 Extra- Pulmonary 6 Less Abnormal N = 2 More Abnormal N = 52 Abnormal at Last Observation: INH 54/1505 (3.6%) SC 15/909 (1.7%) Oral Agent 11/420 (2.6%) Healed Fx 5 Hiatal Hernia 1 LVH/ 9 Cardiomegaly Pacemaker 1 Widened 1 Mediastinum Mediastinal Structures 11

72 HRCT Results – 6-month Substudy in Patients with Type 1 and Type 2 DM Controlled Phase 3 Studies 106, 107 (type 1 DM) and 108 (type 2 DM) HRCT results INH (n = 53) SC insulin (n = 63) Normal at Baseline Normal at End of Study (LOCF) Yes 43 (81.1)49 (77.8) YesNo 3 (5.7)4 (6.3) NoYes 02 (3.2) No 7 (13.2)8 (12.7) No Significant Change 5 (9.4)6 (9.5) More abnormal 1 (1.9)2 (3.2) Less abnormal 1 (1.9)0

73 HRCT Results – 24-Month Substudy in Patients with Type 2 DM Insulin Using Controlled Phase 3 Study 1029 HRCT results INH (n = 98) SC insulin (n = 98) Normal at Baseline Normal at End of Study Yes 62 (63.3) YesNo 9 (9.2)15 (15.3) NoYes 8 (8.2)7 (7.1) No 19 (19.4)14 (14.3) No Significant Change 19 (19.4)10 (10.2) More abnormal 02 (2.0) Less abnormal 02 (2.0)

74 Pulmonary Safety Pulmonary Function Tests Chest X-ray and High Resolution Computerized Tomography (HRCT) Respiratory Adverse Events

75 Respiratory Adverse Events - All Causality Type 1 and Type 2 DM - Controlled Phase 2/3 Studies Preferred term Number (%) of Subjects Type 1 DMType 2 DM INH N=698SC N=705INH N=1279SC N=488OA N=644 All respiratory AEs520 (74.5)440 (62.4)741 (57.9)287 (58.8)219 (34.0) Asthma9 (1.3) 26 (2.0)11 (2.3)3 (0.5) Bronchitis22 (3.2)29 (4.1)62 (4.8)17 (3.5)26 (4.0) Cough increased204 (29.2)62 (8.8)275 (21.5)41 (8.4)24 (3.7) Dyspnea31 (4.4)6 (0.9)44 (3.4)9 (1.8)9 (1.4) Edema pharynx02 (0.3)1 (0.1)00 Epistaxis9 (1.3)3 (0.4)15 (1.2)2 (0.4)5 (0.8) Laryngitis8 (1.1)3 (0.4)7 (0.5)2 (0.4)2 (0.3) Lung disorder1 (0.1)04 (0.3)1 (0.2)0 Pharyngitis126 (18.1)112 (15.9)119 (9.3)44 (9.0)38 (5.9) Pneumonia6 (0.9)8 (1.1)11 (0.9)7 (1.4)4 (0.6) Respiratory disorder51 (7.3)29 (4.1)70 (5.5)45 (9.2)11 (1.7) Respiratory tract infection297 (42.6)292 (41.4)365 (28.5)172 (35.2)127 (19.7) Rhinitis100 (14.3)72 (10.2)107 (8.4)48 (9.8)19 (3.0) Sinusitis70 (10.0)51 (7.2)67 (5.2)46 (9.4)15 (2.3) Sputum increased27 (3.9)8 (1.1)34 (2.7)4 (0.8)3 (0.5) Voice alteration1 (0.1) 16 (1.3)02 (0.3)

76 Cough in Controlled Phase 2/3 Studies Incidence and prevalence greatest during 1st month Decreases with continued INH administration Mainly mild in severity 1% of INH-treated subjects discontinued due to cough Cough assessment instrument was used in Phase 3 Studies 1022, 1027 and 1029 – Occurs within seconds to minutes after dosing – Occurs rarely at night – Rarely productive Not associated with decreases in FEV 1 Preferred term Number (%) of Subjects Type 1 DMType 2 DM INH N=698 SC N=705 INH N=1279 SC N=488 OA N=644 Cough increased204 (29.2)62 (8.8)275 (21.5)41 (8.4)24 (3.7)

77 Dyspnea in Controlled Phase 2/3 Studies Majority of cases mild in severity Standardized dyspnea assessment instrument BDI/TDI was used in Phase 3 Studies 1022, 1027 and 1029 – No clinically important change with exposure of up to 2 years Five SAEs of dyspnea – 4 comparator – 1 INH Preferred term Number (%) of Subjects Type 1 DMType 2 DM INH N=698 SC N=705 INH N=1279 SC N=488 OA N=644 Dyspnea31 (4.4)6 (0.9)44 (3.4)9 (1.8)9 (1.4)

78 Serious Respiratory Adverse Events – All Causality Patients with Type 2 DM - Controlled Phase 2/3 Studies Preferred term INH (13,384 SME) N (events/10,000 SME) Comparator (12,512 SME) N (events/10,000 SME) Asthma3 (2.24)0 Bronchospasm1 (0.75)0 Cough1 (0.75)0 Dyspnea1 (0.75)4 (3.20) Epistaxis1 (0.75)0 Pneumothorax1 (0.75)1 (0.80) Respiratory distress01 (0.80) Respiratory failure1 (0.75)1 (0.80) Vocal cord polyp1 (0.75)0

79 Asthma as an Adverse Event – All Causality Controlled Phase 2/3 Studies Number (%) of Subjects with Asthma Treatment GroupTotalMildModerateSevereDiscontinued Type 1 DM INH N=6989 (1.3)3512 SC N=7059(1.3)7200 Type 2 DM INH N= (2.0) SC N=48811(2.3)9200 OA N=6443(0.5)0300 There are more reports of severe asthma and asthma causing discontinuation in patients receiving INH treatment Asthma is reported infrequently and rarely causes discontinuation in patients receiving INH treatment

80 Pleural Effusion in Phase 2/3 Studies No cases in controlled 2-year studies Eight INH-treated patients experienced pleural effusion – 7 in Phase 2/3 Uncontrolled Extension Studies – 1 in COPD Study 1030 StudyAgeGenderTypeDay of OnsetEtiology yrmale1Day 351Idiopathic 103E60 yrmale2Day 411AIDS yrmale2Day 524Pulmonary edema yrmale2Day 589Post Cardiac Surgery yrmale2Day 472Surgical/iatrogenic – left nephrectomy yrmale2Day 562Post Cardiac Surgery yrmale2Day 433Unknown yrmale2Day 35Pneumonia

81 Malignant Lung Neoplasm Treatment group Number of cases Cases per 10,000 SME INH30.94 Comparator10.80 Observed number of casesExpected number of cases* (95% CI: ) Observed vs. expected number of lung cancer cases among INH treated subjects. *Ferrara A:The incidence of lung cancer, COPD, and Pneumonia, among persons with diabetes mellitus, Oakland, CA: Kaiser Permanente, 2004.

82 Intercurrent Respiratory Illness Glycemic Control and Hypoglycemic Events Without Intercurrent Illness With Intercurrent Illness Patient GroupINHComparatorINHComparator Mean Fasting Plasma Glucose (mg/dL)[N] Type [170]171.6 [159]170.6 [177]175.8 [164] Type 2 insulin-using138.1 [111]151.5 [95]136.5 [115]144.4 [99] Type 2 non-insulin- using [98]191.0 [65]183.6 [102]192.5 [70] Hypoglycemic Event Rate (Events/Subject-Month)[N] Type [414]0.950 [383]1.049 [416]1.294 [384] Type 2 insulin- using [260]0.151 [232]0.074 [261]0.213 [234] Type 2 non-insulin- using [296]0.101 [189]0.142 [296]0.047 [191]

83 Clinical Experience Among Patients with Mild/Moderate Asthma (INH vs Comparator with Asthma) Efficacy and Hypoglycemia – Equivalent changes in HbA 1C – Similar hypoglycemia event rate Respiratory Adverse Events (AE) and Serious Adverse Events (SAE) – Similar number of patients with asthma AE – Increased INH patients with AEs of bronchitis, cough, dyspnea, pharyngitis, RTI and increased sputum – 1 Comparator with SAE of asthma exacerbation Study 1028: Asthma Exacerbations FEV 1 changes – INH-associated treatment group differences similar in magnitude to those observed in patients without asthma Non-SevereSevere INH (N=72)Comp (N=67)INH (N=72)Comp (N=67) Patients Events

84 Clinical Experience Among Patients with Mild/Moderate COPD (INH vs Comparator with COPD) Efficacy and Hypoglycemia – Equivalent changes in HbA 1C – Decreased hypoglycemia event rate Respiratory Adverse Events (AE) and Serious Adverse Events (SAE) – Increased INH patients with AEs of bronchitis, cough, dyspnea, pharyngitis, respiratory disorder, sinusitis and sputum increased – 2 INH patients with SAE of COPD exacerbation (1 each), 1 INH patient with SAE of vocal cord polyp, 1 INH patient with SAE of epistaxis Study 1030: COPD Exacerbations FEV 1 changes – INH-associated treatment group differences similar in magnitude to those observed in patients without COPD Non-SevereSevere INH (N=35)Comp (N=32)INH (N=35)Comp (N=32) Patients10410 Events14910

85 Safety Adverse Events, Serious Adverse Events, and Deaths Hypoglycemia Pulmonary Safety Insulin Antibodies

86 Insulin Antibodies INH associated increases in insulin antibodies were first observed in the Phase 3 Group I studies A semi-quantitative radioligand binding (RLB) assay was used to measure antibodies in these studies A quantitative RLB was developed and validated for use in the Phase 3 Group II studies Results using these assays have been used to extensively characterize and analyze INH-associated antibodies

87 Insulin Antibodies – Patients with Type 1 DM - Study 1022

88 Insulin Antibodies – Patients with Type 2 DM - Study 1029

89 Insulin Antibodies Following INH Withdrawal in Patients with Type 1 DM - Study 1027

90 Insulin Antibodies Following INH Withdrawal in Adult Patients with Type 1 DM - Study 111 N =

91 INH - Associated Insulin Antibodies (IAB) Methods to Examine Potential Clinical Impact Scatter plots – IAB levels and selected clinical parameters Binary distribution plots – IAB levels in subjects with and without selected clinical findings Time plots of FEV 1 decreases and IAB levels Specific review of all adverse events of an allergic nature

92 Insulin Antibodies No Clinical Impact Identified No correlation of insulin antibody levels and – HbA 1c – Hypoglycemia – Insulin dose – PFTs IAB distributions no difference in subjects with – Cough – Dyspnea – Notable PFT declines

93 Change in HbA 1c vs Change in Insulin Antibodies Type 1 - Study Months Change in HbA 1c (%) Change in IAB (  U/ml) Excluding 4 INH patients

94 Potential Allergic Adverse Events Overall incidence of specific all-causality adverse events of an allergic nature was comparable among treatment groups in the Controlled Phase 2/3 studies One INH patient with type 2 diabetes experienced an apparent hypersensitivity reaction characterized by bronchospasm 1 month following initiation of INH therapy – Peak serum antibody level of 632 µU/ml 2 months after initiating INH therapy – 35% eosinophilia – Symptoms resolved promptly after discontinuation of INH and receipt of standard treatment – No accompanying skin rash or angioedema

95 Change from Baseline in Pre Insulin Dosing FEV 1 (L) Change from Baseline in Insulin Antibodies (µU/mL) INH Withdrawal Insulin Antibodies Do Not Correlate with Decreases in FEV 1 – Study 1027 INH SC INH Ins AB Baseline ComparativeWithdrawal +12 Visit (weeks)

96 Insulin Antibodies Summary INH is associated with higher insulin antibody levels compared to SC insulin, more so in patients with type 1 than type 2 DM and women than men Mean antibody levels plateau after 6-12 months INH-associated insulin antibodies are of the IgG class, as are SC insulin-associated antibodies Insulin antibodies are not associated with changes in HbA 1c, hypoglycemic event rates, insulin doses, or PFTs Insulin antibody levels decline after discontinuation of INH

97 Agenda Dr. Neville Jackson Introduction Dr. Anne Cropp Overview of Clinical Program Dr. William Cefalu Medical Need Dr. Neville JacksonBenefit and Managing the Risk

98