Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Why I'm Buying Up Alexza Pharmaceuticals (ALXA)

|Includes:Alexza Pharmaceuticals, Inc. (ALXA)

Here's the second in a series of write-ups for several biotech companies I'm actively monitoring, and which have great upside potential in the near-term.  Our first write-up was on ACHN which got us some great feedback via email.

My style is to buy undervalued companies based off fundamentals, but I'll occasionally buy significant blocks of stock and trade on the momentum.  ALXA is one of these.  I've been buying ALXA since after they announced their Biovail deal, which disheartened investors and sent shares down.  For a few weeks, ALXA pps was in the $2.60-2.70s range which is when I started buying.  I sold a bit at 3.30 (and took the nice 20% profit) but still have a good amount in.  Volume has remained steady and the pps has been increasing on no news.


1. Two huge hurdles have been eliminated: a partnership which did provide some weight to the commercialization potential, and the NDA acceptance.

2. Plenty of time to buy-in ahead of any FDA action (Oct 11, 2010), and before typical pre-PDUFA trading momentum heats up.

3. Financed into early 2011. The company finished off Q1 with about $20M in cash and a $40M upfront payment from Biovail.

4. I don't anticipate an AdComm.  Loxapine is already an approved entity and ALXA is delivering the active in smaller doses than what is commercially available.

In a nutshell, the coast is (relatively) clear to buy-in.

My only concerns ahead of approval (which I can't say yay or nay at this point) are the fact that ALXA is still finalizing the commercial manufacturing process scale-up for AZ-004 (which can always encounter issues), and the potential for any FDA issues with the Staccato inhaler/device.

Nonetheless, I still see ALXA trading up to $4 in the near term and possibly passing $6 in the weeks ahead of the PDUFA date.  Of note, both Wedbush and RBC have "Buy" ratings on ALXA.

My firm, Andrew Nava, LLC, provides institutional and retail healthcare investors with buy-side equity research tools which focus on value-driven investment ideas and clinical, commercial, and regulatory catalysts. Our research is supported by consulting with KOL's, industry professionals, company management, and our database of clinical trial data and upcoming company milestones.  For more information, please visit

Disclosure: Long ALXA

Stocks: ALXA