Novo Nordisk and Aradigm Corporation announced the completion of a Phase 2b clinical trial with the AERx insulin Diabetes Management System (iDMS) that shows that the product may be successfully used to treat Type 2 diabetes patients with insulin delivered via the pulmonary route. It was also announced that Novo Nordisk has increased its commitment to invest in Aradigm Corporation with a new share investment agreement of up to USD 25 million in common stock.

The Phase 2b trial was designed to investigate the safety and efficacy of pulmonary insulin via the AERx iDMS compared to intensified treatment with subcutaneous insulin in people with Type 2 diabetes. This type of intensified treatment with insulin, delivered at mealtimes has long been advocated by leading diabetologists for prevention of long-term complications of the disease. We believe this is the first time pulmonary insulin has been evaluated against intensified subcutaneous insulin therapy. Approximately 100 patients were included for a twelve-week period in this study.

The results of the study showed the AERx iDMS to be at least as effective as intensified subcutaneous injections of insulin. The detailed study results will be presented at scientific conferences during 2002.

Preparation for the initiation of Phase 3 with the AERx iDMS project is ongoing.

Pursuant to the announced share investment agreement Aradigm Corporation has the right, but not the obligation, to sell to Novo Nordisk an additional USD 25 million of common stock, subject to certain conditions.

The agreement limits the purchase per quarter to a maximum of USD 10 million, starting in the first quarter of 2002. Each purchase will be based on the market price prevailing around the time of each transaction. Novo Nordisk will hold the shares to be purchased under the agreement for at least two years from the effective date of each purchase, subject to certain conditions. No shares are being sold to Novo Nordisk at this point in time and the agreement will not impact Novo Nordisk's expectations for its financial results for 2001.

This new investment agreement is in addition to the agreement announced October 25, 2001 in which Novo Nordisk purchased USD 20 million in Aradigm common stock.

Aradigm and Novo Nordisk have been collaborating on the development of the AERx iDMS since 1998. The AERx iDMS uses a liquid solution of insulin, which allows for lower cost manufacturing, and includes automatic breath control to ensure that patients are inhaling each dose of insulin correctly.