SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                  FORM 8-K
  
                               CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934


                               February 6, 1997
                         ----------------------------
                 Date of Report (Date of earliest event reported)


                          INHALE THERAPEUTIC SYSTEMS
                         -----------------------------
               (Exact name of registrant as specified in its charter)


        California                0-23556           94-3134940
- ----------------------------    -----------      -------------------
(State or other jurisdiction    (Commission      (I.R.S. Employer
     of incorporation)          File Number)     Identification No.)


                          1060 East Meadow Circle
                           Palo Alto, CA 94303
                        ----------------------------
                  (Address of principal executive offices)


                              (415) 354-0700
                        ----------------------------
             (Registrant's telephone number, including area code)




ITEM 5. OTHER EVENTS.

     THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT 
INVOLVE RISK AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER 
MATERIALLY FROM THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR CONTRIBUTE 
TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO THOSE DISCUSSED UNDER THE 
HEADING "RISK FACTORS" IN THE COMPANY'S REGISTRATION STATEMENT ON FORM S-3 
(NO. 333-20787). READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE 
FORWARD-LOOKING STATEMENTS, WHICH REFLECT MANAGEMENT'S ANALYSIS ONLY AS OF 
THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO RELEASE THE RESULTS 
OF ANY REVISION TO THESE FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO 
REFLECT EVENTS OR CIRCUMSTANCES OCCURRING AFTER THE DATE HEREOF OR TO REFLECT 
THE OCCURRENCE OF UNANTICIPATED EVENTS.


                           RECENT DEVELOPMENTS

     During the past 12 months, Inhale has entered into strategic 
relationships with four new collaborative partners, moved the pulmonary 
insulin product development program into a Phase IIb clinical trial and two 
additional product development programs into Phase I testing, strengthened 
its balance sheet by adding $25 million of equity financing from corporate 
partners and expanded its technology and manufacturing development activities 
as well as its management team.

COLLABORATIVE PARTNERS

     In March 1996, Inhale and Baxter Healthcare Corporation (a subsidiary of 
Baxter International) ("Baxter") entered into a broad strategic partnership 
to use Inhale's dry powder pulmonary delivery system as a technology platform 
for developing and launching therapeutic products. In April 1996, Baxter made 
a $20 million equity investment in Inhale at a 25% market premium based on 
the average market price prior to the signing of the agreement. Baxter will 
receive worldwide commercialization rights in exchange for research and 
development funding and milestone payments for the first four molecules, 
estimated at up to $60 million. Baxter also has an option to add molecules to 
the collaboration that could result in additional funding and milestone 
payments to Inhale. Inhale will receive royalties and manufacturing revenue 
on sales of products that are successfully commercialized as a result of this 
collaboration.

      In July 1996, the Company entered into an agreement with Genzyme 
Corporation to examine the feasibility of developing dry powder formulations 
of gene vectors for pulmonary applications.

      In January 1997, Inhale and Centeon (a company of Armour and Behring) 
entered into a collaboration to develop a pulmonary formulation of alpha-1 
proteinase inhibitor to treat patients with alpha-1 antitrypsin deficiency, a 
genetic disorder which can lead to emphysema. Centeon will receive 
commercialization rights worldwide with the exception of Japan, and Inhale 
will receive royalties and manufacturing revenue on product sales, an 
up-front signing fee and up to an estimated $15 million in research and 
development funding and milestone payments. Inhale and Centeon completed 
preclinical work indicating that Inhale's dry powder formulation of Centeon's



alpha-1 proteinase inhibitor has the potential to significantly improve the 
efficiency of delivery compared to current infusion therapy.

      Also in January 1997, Inhale and Eli Lilly and Company ("Lilly") 
entered into a development and license agreement to develop a pulmonary 
delivered product for an osteoporosis drug. Inhale will receive up to an 
estimated $20 million in initial fees, research funding and milestone 
payments. Lilly will receive global commercialization rights for the 
pulmonary delivery of the products with Inhale receiving royalties and 
manufacturing revenue on any marketed products. Inhale successfully completed 
the Phase I clinical trial of this drug conducted with ALZA that indicated 
that the drug was systematically absorbed when delivered with Inhale's system.

      Each of the foregoing collaborative arrangements are terminable by the 
partner. Therefore, there can be no assurance that the Company will receive 
additional payments as described.

CLINICAL TRIALS

      In March 1996, Pfizer Inc. ("Pfizer") began Phase II clinical trials of 
pulmonary insulin using Inhale's pulmonary delivery system. Pfizer advanced 
these trials to the next step in late October 1996 by initiating a multi-site 
outpatient trial that may include up to 240 patients. At that time, Pfizer 
made an additional $5 million equity investment in Inhale at a 25% premium to 
the market price of Inhale stock at the time. Pfizer had made an initial $5 
million equity investment in February 1995, also at a 25% premium to 
market price.

      In May 1996, Inhale announced the start of a Phase I clinical trial of an 
aerosolized form of a drug to treat osteoporosis using Inhale's pulmonary 
delivery system as part of a collaboration with ALZA. In early January 1997, 
Inhale announced the completion of that trial.

      In July 1996, Inhale initiated a Phase I clinical trial of an 
aerosolized form of salmon calcitonin as a potential treatment for 
osteoporosis, Paget's disease, hypercalcemia, and other bone diseases.

TECHNOLOGY DEVELOPMENT AND MANUFACTURING SCALE-UP

      Inhale continued to advance the development of its core technologies 
and manufacturing capabilities in 1996. The Company developed a prototype 
device suitable for the home clinical trials and also scaled-up its powder 
processing and automated powder filling systems for production of later stage 
clinical supplies. In late 1996, the Company entered into a 15-year lease 
agreement on a third facility. The Company intends to consolidate its 
operations into this facility over the next eighteen months and intends to 
use the facility as its early commercial manufacturing site.

MANAGEMENT TEAM

      Inhale expanded its management team in 1996. Judi R. Lum joined the 
Company in the fourth quarter to become Inhale's Chief Financial Officer. 
Judi most recently served as Vice President of Finance and Administration for 
an ophthalmic start-up company and previously was Director of Corporate
Development for GenPharm International. She also served as Director of 
Finance for the Industrial Sector of Raychem Corporation, Pilot Operations 
Manager for



Advanced Cardiovascular Systems, and an Assistant Vice President of Crocker 
National Bank. She received her B.A. and M.B.A. degrees from Stanford 
University.

      Lynn Van Campen, Ph.D., joined the Company as Vice President, 
Pharmaceutical Development. She previously was Director of Pharmaceutics for 
Boehringer Ingelheim Pharmaceuticals, Inc. Christopher L. Searcy, Pharm. D., 
joined the company as Vice President, New Business Opportunities. Prior to 
joining Inhale, Dr. Searcy was Vice President of Business Development at 
GalaGen, Inc., and served as Director, Licensing and Development for Pfizer.

      Promotions and changes of responsibilities in the executive staff 
during the past year included: Ajit Gill, former CFO, became Executive Vice 
President of Technical Operations. Mr. Gill, who has a vast amount of 
experience in building new businesses, will focus on managing Inhale's 
growth. Stephen L. Hurst, J.D., Vice President of Intellectual Property and 
Licensing, took on additional responsibility for Business Development 
following the departure of Jack Anthony. Mr. Michael Glembourtt was recently 
promoted to Vice President, Project Management. Mr. Glembourtt has held a 
variety of project management and research positions at Syntex Development 
Research (now Roche Biosciences), California Biotechnology (now Scios 
Corporation), Cetus Corporation (now Chiron Corporation), and the Stanford 
University School of Medicine.



                                 SIGNATURES

     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.



                                       INHALE THERAPEUTIC SYSTEMS


Dated: February 6, 1997                By:    /s/ Robert B. Chess
                                            ------------------------------
                                            Robert B. Chess
                                            President and Chief Executive
                                            Officer