EXHIBIT 99.1

INHALE AND BAXTER ANNOUNCE
COMPLETION OF RE-NEGOTIATION OF
COLLABORATIVE AGREEMENT

APRIL 1, 1998 4:45 PM EST

SAN CARLOS, Calif. -- (BW HealthWire) -- April 1, 1998 -- Inhale Therapeutic 
Systems (NASDAQ:INHL) and Baxter International Inc. (NYSE:BAX) announced 
today that they have completed a review of their two-year old collaboration.

The two companies have agreed to focus their efforts on the one compound that 
the parties believe has the largest commercial potential.

Two additional compounds remain in the collaboration and may be developed 
further in the future. Inhale will receive all rights to work done on a 
fourth compound from the collaboration, currently in preclinical development, 
and will be free to develop further or partner it independently of Baxter. In 
a separate press release, Inhale announced today that the compound of primary 
focus going forward has successfully completed a Phase I pulmonary delivery 
clinical trial and that a second compound has successfully completed a Phase 
II study.

The initial agreement, signed on March 1996, called for the development of 
pulmonary delivery for four compounds outside of Inhale's traditional peptide 
and protein focus. Under the revised terms, Inhale and Baxter will focus on 
the product which entered Phase I testing in November 1997 and continue to 
pursue its commercialization. The two companies believe that this drug has 
the most promising commercial potential, and, as a result, Baxter funding 
will be targeted on this program.

Inhale will continue to have primary responsibility for development of the 
selected therapeutics. Baxter will continue to provide research funding and 
milestone payments. Inhale will receive royalties and manufacturing revenue 
on any products marketed through the collaboration. Baxter will be 
responsible for the worldwide commercialization of products resulting from 
the collaboration.

Dr. Kshitij Mohan, Baxter's Corporate Vice President of Research and 
Technical Services, said, "By focusing on the product with the greatest 
commercial potential, we can direct the development efforts to maximum 
advantage."

Robert Chess, President and CEO of Inhale, said, "The technical and clinical 
work to date leads us to believe that the Inhale system could provide a 
significant improvement in patient care for this product."

Baxter International is a global medical-products and services company that 
is a leader in technologies related to the blood and circulatory system. 
Through its subsidiaries, Baxter has market-leading positions in four global 
businesses: biotechnology; cardiovascular medicine, renal; and intravenous 
systems/medical products.

Inhale is developing a pulmonary delivery system to enable a wide range of 
drugs, including peptides and proteins, to be delivered by the pulmonary route 
for systemic and local lung indications. The company has six drugs in human 
clinical trials using its delivery system and has feasibility and development


  



partnerships with several pharmaceutical, biotechnology, and medical 
technology companies, including Baxter, Pfizer, Lilly, and Centeon.

This release contains forward-looking statements that reflect management's 
current views as to the Company's collaborative arrangements, clinical 
trials, product developments, manufacturing scale-up, and other future events 
and operations. These forward-looking statements involve uncertainties and 
other risks that are detailed in Inhale's reports and other filings with the 
SEC, including its Form 10-K for the year ending December 31, 1997. Actual 
results could differ materially from these forward-looking statements.