Specialty pharmaceutical Bentley Pharmaceuticals (NYSE:BNT) recently received a patent extending coverage for the company's technology to deliver drugs through the nose. Although Bentley's primarily a generic drug firm -- generating 90% of its revenue from generics -- it's also been trying to break into the potentially very lucrative diabetic-care market.

The new patent may allow Bentley to expand its presence in the intranasal drug delivery market, which is anticipated to grow to $2.6 billion by 2010. Yet Bentley's insulin formulation is also very acidic, which can cause irritation to the mucous membranes, a problem that has thwarted researchers for years.

The quest for non-injectibles
Perhaps nasal insulin delivery isn't the Holy Grail of diabetes treatments, but it may be akin to finding the Dead Sea scrolls. Diabetes is a huge health problem. According to the American Diabetic Association, nearly 21 million people have diabetes, and another 41 million are at risk. The disease's related drug market reaches at least $12 billion.

Roughly 90% of diabetics have the Type II form of the disease, which is usually caused by bad health. But the more serious Type I, in which pancreas does not produce insulin, is not considered preventable. Unfortunately, because injection is the only truly effective way to deliver insulin to the body, patients are reluctant to start such treatment, thus making doctors hesitant to prescribe it.

A nasal delivery system would overcome a lot of those objections, but also bring a host of new hurdles. Allergies or a cold, for example, could keep the patient from fully absorbing the insulin, and nasal absorption of insulin is already notoriously low. Because of its large molecules, no more than 10% of any given dose is absorbed through the nasal tissue. While Bentley says its technology allows for 20% absorption or more, the additional doses the treatment requires make it a more expensive alternative to injection.

Novo Nordisk (NYSE:NVO) has been trying for years to develop a nasal delivery system that doesn't cause inflammation; so far, it hasn't succeeded. The closest science has come to date is an inhaled version. Pfizer (NYSE:PFE) has won approval for Exubera, while Novo and Eli Lilly (NYSE:LLY) are in advanced stages of clinical trials of their own. While it's better than injections, inhaled insulin comes with its own issues -- including a potential for lung damage -- that won't make it a widespread alternative just yet.

Bentley's split personality
If Bentley can offer a viable nasal insulin delivery system -- a feat that so far has defeated the pharmaceutical giants -- it will be able to break free from being a simple generic drug company. An effective nasal delivery system for insulin will be a boon for patients and for Bentley, but the company's current patent doesn't offer that. Foolish investors should consider that as they sniff around this company.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. Eli Lilly is a recommendation of Motley Fool Income Investor. Pfizer is a recommendation ofMotley Fool Inside Value. The Motley Fool's disclosure policy clears the air.