According to the Patent Office the patent application for Novo Nordisk's AERx device was rejected because it "did not contribute anything new to the field," said a report in Danish newspaper daily Boersen.
However the Danish drug firm refutes this, accusing the Patent Office of "misinterpreting data, evidence and legislation" and has vowed to fight the decision.
Novo Nordisk's sensitivity on this issue is not surprising. Insulin is the company's lifeblood - last year the firm finally knocked its long time insulin rival Eli Lilly out of the way to steal the market leadership position and the company's current and future armoury of drug products is heavily invested in this field.
However, Novo's reign may only be short lived, as the number of revolutionary non-injectable insulin treatments coming through the R&D pipelines are posing an ever-increasing threat to the company's market domination.
Indeed, inhaled insulin devices have been one of the hottest topics of drug development this year, with the launch of Pfizer's Exubera, the first inhaled insulin to enter the market. Eli Lilly's AIR Insulin system is also looking likely to follow.
Not wanting to be left behind, Novo has also been developing its version of an inhaled insulin product - the AERx insulin Diabetes Management System.
This product is lagging well behind Exubera in the development stages, currently still in Phase III trials, with an eventual launch not expected until at least 2009.
Even then the product's marketability is under question. AERx is the only inhaled insulin device currently in clinical trials that uses a liquid formulation, requiring the insulin to be refrigerated. It is also quite large - about the size of a paperback book.
These factors may disadvantage the product, although using a liquefied version of insulin and a battery-powered device, AERx can deliver more minutely metered doses of insulin, which may potentially prove a selling point for some patients.
Meanwhile, the firm said that its current patent problems would have no bearing on the success of the product, although it still wanted its intellectual property on this invention covered, particulary considering the market potential of such a product.
The development of newly-formulated insulin products that can avoid injection as a delivery method have long been touted as a potential money-spinner - some figures being thrown around have been in the range of $1.5bn (€1.2bn).
Others disagree and claim that the demand for such products has been overestimated - at least until further advances in the technology of such products are made.
A recent Datamonitor report predicted that the inhalable insulin is unlikely to achieve the blockbuster status the industry had hoped for, although it did expect there to be enough of a consumer demand to at least offer a commercial future large enough to accommodate the four devices at the forefront of the competition, Exubera, AIR, AERx and Technosphere.
And so the inhaled insulin battle continues…