The purpose of this study is to assess the tolerability and efficacy of inhaled theophylline (ADC4022) on markers of pulmonary inflammation (white blood cells) in induced sputum and in bronchial biopsy samples in subjects with moderate to severe Chronic Obstructive Pulmonary Disease (COPD) when co-administered with budesonide and compared to placebo.

Inclusion Criteria:

• Confirmed diagnosis of COPD that has been symptomatic for at least 2 years
• The subject has moderate to severe COPD, as defined by the American Thoracic Society and the European Respiratory Society
• The subject can produce an adequate sputum specimen after induction
• The subject has a history of ≥ 10-pack years of cigarette smoking
• The subject has either a ≤15% increase or ≤200 ml increase in FEV1 from pre-dose following a fixed dose of bronchodilator therapy
• The subject is able to provide written, informed consent to participate

Exclusion Criteria:

• The subject has experienced a respiratory tract infection and/or an exacerbation of COPD within 30 days
• The subject uses systemic corticosteroids (oral or parenteral)
• The subject has received long term oxygen therapy within 30 days
• The subject has a previous history or diagnosis of asthma
• The subject has a chest x-ray within the past 12 months which is diagnostic of an active or clinically significant disease other than COPD
• The subject has a history or presence of active tuberculosis, cystic fibrosis, bronchiectasis, lung cancer or sarcoidosis or any other clinically important lung diseases
• The subject has had radiation or chemotherapy within the previous 12 months
• The subject has a history of anaphylaxis associated with medicinal products
• The subject is pregnant, intends to become pregnant, or is breast feeding
• The subject's alcohol intake is excessive.
• The subject participated in another study (for a marketed drug) within 3 months before the start of this study or (for an investigational drug) within 4 months before the start of this study.

Other inclusion/exclusion criteria may also apply