Alexza Pharmaceuticals: Stock Moving Events for Second Half 2011

| About: Alexza Pharmaceuticals, (ALXA)

With Alexza Pharmaceuticals (NASDAQ:ALXA) expected to refile its AZ-004 for the rapid treatment of agitation in schizophrenia or bipolar disorder patients NDA by the end this month, I thought it would be a good time to review the company and the product candidate.


On October 11, 2010, the company received a Complete Response Letter (CRL) from the FDA regarding its New Drug Application (NDA) for AZ-004 (Staccato loxapine), submitted as Adasuve Staccato (loxapine) inhalation aerosol, 5 mg and 10 mg. In the CRL, the FDA stated that its primary clinical safety concern was related to data from the three Phase 1 pulmonary safety studies with AZ-004. This concern was primarily based on observed, dose-related post-dose decreases in forced expiratory volume in one second, or FEV1, a standard measure of lung function, in healthy subjects and in subjects with COPD and asthma. The agency also noted that decreases in FEV1 were recorded in subjects who were administered device-only, placebo versions of AZ-004.

The CRL also raised issues relating to the suitability of the stability studies undertaken by Alexza and certain other items relating to the agency’s recently completed pre-approval manufacturing inspection. Because AZ-004 incorporates a novel delivery system, the CRL also included input from FDA’s Center for Devices and Radiological Health (CDRH). CDRH requested a human factors study and related analysis to validate that the product can be used effectively in the proposed clinical setting. CDRH also requested further bench testing of the product under an additional “worst-case” manufacturing scenario. The stock dropped 54% in response to the news.

On January 18, 2011, Alexza announced that it completed an End-of-Review meeting with the FDA for the AZ-004 New Drug Application, and received the official FDA minutes from the meeting. The company also noted that in December, it held the End-of-Review meeting in response to the CRL. Based on the guidance received, Alexza believes that all of the issues raised in the CRL are resolvable.

In the information package submitted to the FDA in response to the CRL and in preparation for the End-of-Review meeting, Alexza presented evidence that the placebo device is safe, including a blinded expert review of the flow-volume loops data from the healthy subject study as further evidence that there appears to be no consistent pattern suggestive of airway obstruction in these subjects. Alexza also provided an analysis showing that there is no meaningful temporal relationship between placebo administration and decreases in FEV1. Alexza believes this evidence and analysis confirms that the changes seen were likely background events in the population studied, where the repeated and extensive pulmonary function testing may have contributed to some of the observations. Additionally, Alexza showed that the aerosol characterization does not indicate a basis for concern. The agency asked that Alexza reiterate these arguments in its resubmission.

In the information package, Alexza also showed that the pulmonary safety program in subjects with asthma and COPD had identified patients who may be susceptible to bronchospasm, the nature of this event, how it can be managed, and that Alexza believed the risk in these patients could be mitigated through labeling and a Risk Evaluation and Mitigation Strategy (REMS) program. At the End-of-Review meeting, the agency stated that it would be reasonable to propose a REMS program for the use of Staccato loxapine, and requested that as part of the company's resubmission, Alexza provide a detailed REMS proposal including labeling, a medication guide, a communication plan, and post-approval studies to manage the potential risks. In the resubmission Alexza must also show how to identify patients at risk of developing pulmonary side-effects, as well as a way to decide who should and should not be treated with Staccato loxapine when they are present for treatment.

The FDA stated in the meeting minutes that it would likely present the AZ-004 application to an advisory committee. Alexza further stated that it believes the AZ-004 NDA is a Class 2 resubmission and the review period will be six months.

The CRL also raised issues relating to the suitability of the stability studies undertaken by Alexza and certain other items relating to the agency's pre-approval manufacturing inspection, which was completed in August 2010. Alexza believes it understands these issues and that the issues can be adequately addressed in the AZ-004 NDA resubmission.

Since AZ-004 incorporates a novel delivery system, the CRL included input from FDA's Center for Devices and Radiological Health (CDRH). In the CRL, CDRH requested a human factors study and related analysis to validate that the product can be used effectively in the proposed clinical setting. Prior to the End-of-Review meeting, Alexza provided a human factors study draft protocol for review by CDRH, on which the FDA provided input and comments. Alexza expects to finalize the protocol with the FDA and complete this study in the coming months. Alexza is not required to conduct any additional efficacy or safety clinical trials.

CDRH also requested further bench testing of the product under an additional "worst-case" manufacturing scenario. Alexza completed this additional "worst-case" bench testing of the product, submitted data to the FDA and believes that this issue has been adequately addressed.

In April 2011, Alexza completed a Type C meeting with the FDA. The primary purpose of this meeting was to discuss preliminary draft labeling and initial REMS program proposals. In the information package submitted to the FDA in preparation for this guidance meeting, Alexza included updated draft labeling and a medication guide, and initial proposals for an AZ-004 REMS program, including a draft communication plan and draft post-approval study outline.

Following the REMS guidance meeting in April 2011, Alexza believes there is agreement with the FDA on the definition of the potentially "at-risk" patient population. Additionally, Alexza and the FDA discussed key elements of screening for these "at-risk" patients, noting that no screen is 100% effective, and components to post-dosing risk mitigation in the event an "at-risk" patient receives a dose of AZ-004. The FDA emphasized that there are two key components for a risk mitigation proposal: i) adequacy of monitoring, via patient observation, for a period of time relative to the likely occurrence of a respiratory adverse reaction, and ii) availability of rescue medication (e.g., inhaled albuterol) should an adverse reaction occur.

Alexza will address this updated guidance from the FDA in its draft REMS proposal contained within the AZ-004 NDA resubmission. The FDA indicated that a complete review of the proposed REMS in conjunction with the full clinical review of the resubmitted NDA will be necessary to determine whether the REMS will be acceptable. The FDA stated it would present the AZ-004 application to an advisory committee. The objective of this committee meeting would be to discuss the proposed approach for managing the risks of AZ-004 in relationship to its patient benefits.

On May 9, the company said that it believes the issues raised in the AZ-004 CRL are resolvable and it remains on track to re-file the AZ-004 NDA in late July this year. Alexza further said that its recent capital raise provides Alexza with the operational flexibility to continue its AZ-004 partnering discussions and operate the company beyond into 1Q12.

Alexza previously received notice that AZ-004 is eligible for submission of a Marketing Authorization Application (MAA) under the centralized registration procedure with the European Medicines Agency (EMA) and was also notified of the Rapporteur and co-Rapporteur appointments for the AZ-004 review. The company confirmed a filing target date with the EMA and plans to submit the MAA late in the third quarter of 2011.

According to the company there are 2.4 million schizophrenia patients and 5.7 million bipolar disorder patients in the United States. Furthermore, agitation is a common and severe symptom.

Details of AZ-004 Phase 3 Study

More on study here.

The phase III, randomized, double-blind, placebo-controlled, parallel-group study enrolled 344 individuals who received one, two or three doses of inhaled loxapine (5 or 10 mg) or a placebo. Lorazepam rescue was permitted after dose two. The primary efficacy end-point was change from baseline in Positive and Negative Syndrome Scale–Excited Component (PANSS–EC) 2 h after dose one. The key secondary end-point was Clinical Global Impression - Improvement scale (CGI–I) score 2 h after dose one.

The primary efficacy end-point – the change in the PANSS–EC score from baseline to 2 h after dose one – demonstrated the efficacy of both doses of inhaled loxapine compared with inhaled placebo. The overall treatment effect was highly statistically significant (P50.0001), and both the 5 and 10 mg doses resulted in significantly larger decreases in the PANSS–EC score from baseline to 2 h, relative to inhaled placebo (5mg group/placebo group, P= 0.0004; 10 mg group/placebo group, P50.0001). Furthermore, inhaled loxapine produced a rapid onset of effect as assessed by the PANSS–EC score (Fig. 4), with highly statistically significant differences between inhaled loxapine and inhaled placebo at 10 min after dose one, the earliest assessment time (10 mg group/placebo group planned comparison, P50.0001; 5mg group/placebo group post hoc comparison, P= 0.0003). A continued treatment effect was evident at all subsequent assessments throughout the 24 hour period after dose one (10 mg group/placebo group, P50.0001; 5mg group/placebo group, P50.05). The key secondary efficacy end-point – the CGI–I score at 2 h after dose one – provided additional evidence of the efficacy of inhaled loxapine.

Inhaled loxapine was well tolerated. The percentage of participants who had at least one adverse event was similar in the placebo and loxapine groups (placebo group: 44/115; 5mg group: 40/116; 10 mg group: 43/113), and most events were judged to be of mild or moderate severity and resolved without intervention.

The researchers concluded that the results support the conclusion that inhaled loxapine provides a rapid, effective and safe treatment option that may be more acceptable to some individuals with schizophrenia and staff than conventional parenteral administration.


AZ-004 has strong prospects. The product candidate is effective and safe, and there is a decent market size with about 8 million potential patients. The stock has strong prospects and provides a number of trading opportunities over the second half of the year with the numerous catalysts including the NDA submission, the FDA acceptance of the NDA, potential partnership, FDA committee meeting on the drug candidate, and a PDUFA date. Keep in mind, the stock was trading at $3, 75% higher than it was yesterday, just before the company received its CLR last year.

Disclosure: I am long ALXA.