Pfizer

(PFE) - Get Report

has put off plans to seek regulatory approval for an inhaled form of insulin, known as Exubera, to conduct more safety tests, the drug giant told analysts at a meeting Tuesday.

That's a dose of bad news for biotech firm

Inhale Therapeutics

(INHL)

, which is codeveloping Exubera with Pfizer and French drugaker

Aventis

(AVE)

. Inhale is developing a broad menu of drug-delivery technologies, but Exubera is its most ambitious and important product.

Exubera was expected to be ready for consideration by the Food and Drug Administration by year's end. But in July, Pfizer said the product was delayed without offering much detail. Optimists were hopeful that the delay wouldn't last long and that Exubera would be filed with the FDA sometime in the first half of 2002. That appears unlikely now.

Tuesday, the drug giant said tests prove that Exubera delivers insulin just as well as traditional injections, but more safety testing is needed.

"Because Pfizer, its partner, Aventis, and regulators expect extensive and rapid early use of Exubera, the companies have decided to include in the NDA filing an increased level of controlled, long-term pulmonary safety data in the diabetic patients, an area where little data currently exist," the company said in a statement.

Pfizer added that a study would be completed in 2002 and that an NDA -- or approval application -- for Exubera would follow, although the company did not specify when that filing would occur.

More details are expected later today as the Pfizer analyst meeting progresses. Most important for Inhale shareholders will be any information on an exact timetable for an Exubera FDA filing. The hope, of course, is that the additional safety study would be completed in time to allow for a filing by the end of 2002.

Shares of Inhale were down 78 cents, or 4%, to $18.69 in recent Tuesday trading. Pfizer was up 82 cents, or 2%, to $41.15.