Comparison of Technosphere Insulin Versus Technosphere Powder (Placebo) in Insulin-Naive Subjects With Type 2 Diabetes Mellitus

Inclusion Criteria:

- HbA1c > or = to 7.5% and < or = to 10.0%

- Body mass index (BMI) < or = to 45 kg/m2

- Non smoker for at least 6 months before Screening

- Clinical diagnosis of type 2 diabetes mellitus for more than 12 months

- Currently receiving as diabetes treatment only metformin or 2 or more OADs and on
stable doses for at least 3 months before enrollment

- Subjects receiving metformin must be on at least 1.5gm daily, or up to the
maximum tolerated dose

- Subjects treated with a sulfonylurea must be on at least 50% of the total
maximum approved dose for a given agent

- Subjects receiving a DPP-4 inhibitor must receive the maximum approved dose
specific for that agent

- Metiglinide and alpha-glucoside inhibitors must be taken at the highest
tolerated dose within the approved dose range

- No previous or current treatment with insulin, except during an acute illness,
gestational diabetes, or at time of initial diagnosis of diabetes

- Forced expiratory volume in one second (FEV1) > or = to 70% Third National Health and
Nutrition Examination Survey (NHANES III) predicted

- Forced vital capacity (FVC) > or = to 70% NHANES III predicted

- Forced expiratory volume in one second as a percentage of forced vital capacity
(FEV1/FVC) > or = to NHANES III lower limit of normal (LLN)

Exclusion Criteria:

- History of chronic obstructive pulmonary disease (COPD), clinically proven asthma, or
any other clinically important pulmonary disease (eg, pulmonary fibrosis)

- Any clinically significant radiological findings on screening chest x-ray

- Use of medications for asthma, COPD, or any other chronic respiratory conditions

- Evidence of serious complications of diabetes (proliferative retinopathy, autonomic
neuropathy with symptoms of gastroparesis or cardiac arrhythmia; sensory neuropathy
that makes manipulation of the Gen2C inhaler difficult)

- Renal disease or renal dysfunction

- Significant cardiovascular dysfunction or history thereof within 12 months of
screening; serious arrhythmia, treatment with medications to control/treat
arrhythmias; myocardial infarction; cardiac surgery; history of valvular heart
disease

- Previous or current use of amiodarone

- Treatment with glucagon-like peptide-1 (GLP-1) analogs, thiazolidinediones (TZD), or
weight loss drugs (eg, sibutramine, orlistat) within 3 months of screening

- History of pulmonary embolism or deep venous thrombosis in the 12 months before
Screening

- History of recent blood transfusion (within previous 3 months) or diagnosis of
hemoglobinopathies that may affect HbA1c measurements