Summary of Alexza Pharmaceuticals
(PART ONE - ALXA QUICK INFO)
Alexza Pharmaceuticals is traded on the Nasdaq Global Market under the stock ticker symbol ALXA. As of August 18, 2010, 3:59 PM ET, Alexza has 59,594,000 shares outstanding. Alexza has a drug, AZ-004 (Staccato Loxapine), up for FDA approval. The Prescription Drug User Fee Act [PDUFA] date for this New Drug Application [NDA] is set by the FDA for October 11, 2010.
Below is a link to a video of an animated demonstration of Alexza's Staccato System device:
JMP Securities rates Alexza as Market Outperform with a $12 price target (upgraded from $10). WBB Securities rates Alexza as Strong Buy (upgraded from Buy) with a $6 price target. Wedbush Morgan rates Alexza as Buy with a $12 price target. RBC Capital rates Alexza as Outpreform with a $13 price target.
Alexza Pharmaceuticals is listed on the Russell 3000 Index, the Russell 2000 Index, the Russell Global Index and the Russell Microcap Index.
(PART TWO - AZ-004: ITS NDA FILING)
The AZ-004 (Staccato Loxapine) NDA is a combination drug-device NDA (meaning that both drug and device will be up for approval-consideration together using the same New Drug Application). AZ-004 is the combination of the Staccato System (the device) and Loxapine (the drug). Since Alexza's first IND filing in 2004, the Staccato System device has about 3,000 administrations during all of its clinical trials. And since 2005 when AZ-004's Investigational New Drug [IND] application was filed, AZ-004 has a 1,600 patient NDA database from 13 clinical trials.
These 13 clinical trials are:
 Phase 1 Single-dose Pharmacokinetics [PK] Study
 Phase 2 Multi-dose PK Study
 Phase 1 Comparability Study
 Phase 1 PK - Smokers vs. Non-Smoker Study
 Phase 2 Schizophrenia Clinical Efficacy and Safety Study
 Phase 3 Schizophrenia Clinical Efficacy and Safety Study
 Phase 3 Bipolar Disorder Clinical Efficacy and Safety Study
 Phase 1 Lung Safety Study for Normal Healthy Volunteers [NHV]
 Phase 1 Lung Safety Study for Asthma
 Phase 1 Lung Safety Study for COPD
 Phase 1 Thorough QT Study
 AZ-104 Phase 2a Migraine Supportive Safety Study
 AZ-104 Phase 2b Migraine Supportive Safety Study.
The AZ-004 NDA is a state of the art electronic submission. The NDA has 1,400 electronic files meeting current eCTD standards. The NDA is a 505(b)(2) submission with original non-clinical and clinical studies. A 505(b)(2) NDA is a type of application that allows the drug sponsor (Alexza) to rely on the FDA's findings of safety and/or effectiveness for a previously approved drug. Loxapine, the drug in AZ-004 (Staccato Loxapine), is already approved by the FDA. Loxapine, as an FDA approved drug approved 35-years ago, has already been found to be safe and effective. Because of this, a 505(b)(2) application is generally an easier pathway toward FDA approval.
AZ-004 showed very strong and positive Phase 3 data from two pivotal studies for schizophrenia and bipolar disorder; 658 patients enrolled in two Phase 3 trials. Both Phase 3 trials met their primary and secondary endpoints. Rapid onset was established in both Phase 3 trial patient populations. Both Phase three trials showed a very strong safety profile in which the drug was well tolerated in patients.
(PART THREE - AZ-004: ITS PURPOSE)
AZ-004 targets the 22 billion dollar worldwide antipsychotic market (15 billion dollars in the United States alone). AZ-004 is indicated for the rapid treatment of agitation associated with schizophrenia or bipolar disorder. There are 2.4 million schizophrenia patients and 5.7 million bipolar disorder patients in the United States; agitation is a common and severe symptom of both diseases. AZ-004 has a possible 300 to 500 million dollar market for its initial indication for the bipolar and schizophrenia in just the United States.
Agitation is much more common than many people may think and is more than just a patient being upset or disturbed. Agitated patients can be a danger to themselves or others. Agitation is excessive verbal or motor activity that can express itself as being extremely aggressive, destroying property, screaming threats being physically violent and other similar behaviors. Acute agitation, characterized by unpleasant arousal, tension, irritability, hostility, aggression and violence is one of the most common and severe symptoms of many major psychiatric disorders, including schizophrenia and bipolar disorder. AZ-004 meets and fulfills an unmet medical need. Agitation is the continuation and escalation of a disease that has not been focused on until now with AZ-004.
Agitated patients themselves are usually very frightened during these episodes. Even though they are threatening people and breaking things, they are actually really scared. They are acting in a way they think is best, which in their confuses state can often be very destructive. For family and friends, it can also be very scary. Family and friends are the ones who are most at risk from people who are agitated and are the most likely to be injured during agitation episodes. As well, caregivers and medical staff can also be at risk of injury. 15-20% of medical staff at emergency rooms and psychiatric hospitals miss work each year due to injuries caused by agitated patients. Roughly two-thirds of these staff members are injured when they try to restrain the patient in order to treat them.
According to the National Institute of Mental Health [NIMH], bipolar disorder affects about 5.7 million American adults while schizophrenia afflicts about 2.4 million people in the United States. Market research among physicians and health-care providers indicates that over 90% of these patients will experience agitation during their lifetime and that about 70% of those who experience agitation will have one to six episodes per year. Research studies with schizophrenia patient caregivers and bipolar patients indicate these patients currently experience an average of 11 to 12 episodes of acute agitation each year. Of which, research indicates that approximately 50% of treated acute agitation episodes are treated in emergency settings, another approximately 35% of the treated agitation episodes suffered by schizophrenic and bipolar patients are treated in an inpatient setting (hospital and long-term residential settings), and approximately 15% are treated in a physician's office.
Agitation episodes are currently treated about 55% of the time with oral antipsychotics and about 45% of the time with intra-muscular, or IM, injections. Oral medications work relatively slowly but are easy to administer, painless and are less threatening to patients. IM injections have a faster onset of action and a higher predictability of drug effect, but because they are invasive, IM injections are usually the treatment option of last-resort. Currently, no non-invasive therapies are available that work faster than 30 minutes to help agitated patients in need of treatment. This is where AZ-004 comes into play. AZ-004 is an easy to administer and painless way to administer relief using an incredibly fast method.
(PART FOUR - THE STACCATO SYSTEM: HOW IT WORKS)
Click the link below to view an animated demonstration of the Staccato System device:
Alexza has developed AZ-004 to offer an acute agitation treatment option that provides a fast onset of effect, that is noninvasive and safer to administer than injections, and that allows patients to be active participants in choosing acceptable treatment options. They achieve this through the Staccato System.
AZ-004 is a combination drug and device. It used Alexza's proprietary technology, the Staccato System. The Staccato System device vaporizes unformulated drug to form a condensation aerosol that allows rapid systemic drug delivery through deep lung inhalation. The drug is quickly absorbed through the lungs into the bloodstream, providing speed of therapeutic onset that is comparable to intravenous administration, but with greater ease, patient comfort and convenience.
The Staccato System is used to deliver the drug Loxapine into the patient's lungs. This process works due to the heating element contained within the Staccato System inhalers. The heating element is coated with a thin layer of Loxapine. The Staccato System device is breath actuated; a single inhaled breath by the patient over the device's mouthpiece triggers the heating element, which vaporizes the Loxapine, allowing the patient to inhale the drug. The Loxapine is then rapidly absorbed through the lungs at a rate typically faster than oral and intravenous medications. Exactly the same dose with each use of the Staccato System device; not seen with other inhalation technology. There are no additives when it comes to the Staccato device. Everything that goes into the lungs is the pure drug and nothing else (good from a safety perspective).
(PART FIVE - THE STACCATO SYSTEM: ITS ADVANTAGES)
The device has the potential to change the treatment practices for acute agitation. AZ-004 meets the American Association for Emergency Psychiatry [AAEP] Treatment Guidelines for speed, predictability of onset and patient friendly ease of administration. AZ-004 advantages allows doctors, nurses and caregivers to being able to quickly, comfortably, easily and reliably calm down agitated patients.
Unlike other inhalation devices, Staccato does not require any complicated breathing maneuvers. With a device like an asthma inhaler, for example, you have to coordinate your breath with the activation of the device. You are never sure if you are getting the full dose; often requiring a second dose immediately after the first. This is not so with the Staccato device. The Staccato device is much simpler and more reliable. You do not need to coordinate your breath with the device. A patient's normal breathing-pattern is sufficient to get the full and complete dose of medicine into the lungs (making it very simple for agitated patients to use the device; as shown from feedback from clinical trial patients who express very positive experiences using the device). No other inhalation device can deliver a drug the way the Staccato device does.
Clinical trial data indicate that Alexza’s unique Staccato technology generates consistent distribution of aerosolized drug particles of 1 to 5 microns (the ideal size for absorption in deep lung tissue), providing peak plasma concentrations as quickly as an intravenous injection and rapid onset of therapeutic relief.
In addition to Loxapine, the Staccato System device has been tested with over 200 FDA-approved that have the ability to be used in such a manner with the Staccato System. Currently Alexza is engaging in clinical trials with 5 additional drugs; two of which have completed Phase 2 trials, one currently in Phase 2 trial right now and two more which have finished Phase 1 trials. These 5 additional drugs include treatment for migraine headaches, breakthrough pain, acute pain attacks, and insomnia. Since the filing of its first IND in 2004, Alexza has dosed more than 2,600 patient subjects have been administered about 3,000 times and with the Staccato device in 22 different clinical trials under six different INDs for Staccato-based product candidates.
(PART SIX - PHASE 3 STUDY FOR SCHIZOPHRENIA AND PHASE 3 STUDY FOR BIPOLAR DISORDER)
Alexza Pharmaceuticals successfully completed two separate Phase 3 trials for AZ-004: a 344-patient trial for schizophrenia and a 314-patient trial for bipolar disorder. In total, the AZ-004 NDA contains efficacy and safety data from more than 1,600 patients and subjects who have been studied in 13 different clinical trials. Both trials met primary and key secondary endpoints. The company submitted an NDA on December 11, 2009 and was accepted by the FDA on February 11, 2010. The FDA has set the Prescription Drug User Fee Act [PDUFA] goal date for October 11, 2010.
In September of 2008, Alexza announced positive results from the first Phase 3 clinical trial of AZ-004 in schizophrenic patients with acute agitation. This Phase 3 clinical trial was an in-clinic, multi-center, randomized, double-blind, placebo-controlled study and tested AZ-004 at two dose levels, 5 mg and 10 mg. It enrolled 344 schizophrenic patients with acute agitation at 24 clinical centers in the United States.
In December of 2008, Alexza announced positive results from the second Phase 3 clinical trial of AZ-004 in bipolar disorder patients with acute agitation. As with the previous clinical trial for schizophrenic patients, this Phase 3 clinical trial for bipolar disorder patients was also an in-clinic, multi-center, randomized, double-blind, placebo-controlled study and tested AZ-004 at two dose levels, 5 mg and 10 mg. It enrolled 314 acutely-agitated patients with bipolar disorder at 17 US clinical centers.
The results of both clinical trials for schizophrenia and bipolar disorder showed very positive results. Both doses of AZ-004 (5 and 10 mg) met the primary and key secondary endpoints of the studies, with highly statistically significant reductions in agitation, as compared to placebo. The primary endpoint was reduction in agitation as measured by the PEC at 2 hours. The key secondary endpoint was reduction in agitation as measured by the CGI-I at 2 hours.
Additionally, the 10 mg dose of AZ-004 exhibited a rapid onset of effect, with statistically significant reductions in agitation at 10 minutes post-dose, the first time point measured. The reduction of agitation was sustained through the 24-hour study period. The 10 mg dose sustained this statistically significant improvement at all measurement time points throughout the 24-hour study period, compared to placebo. In both studies, the administration of AZ-004 was generally safe and well tolerated. In 2009, Alexza initiated and completed five non-pivotal safety and NDA-supporting studies for AZ-004. Alexza believes these data, along with data from the other efficacy and safety trials conducted with AZ-004, adequately demonstrate the efficacy and safety of AZ-004 for the proposed indication.
(PART SEVEN - ALEXZA'S OTHER PRODUCT CANDIDATES)
In additional to Alexza's current 6 product candidates currently with INDs and clinical trials, there are 5 other compounds that haven't been publicly announced that are viable for use of the Staccato System, which Alexza is currently eventuating (along with other compounds).
Alexza has 5 other product candidates that have completed some level of clinical trials. These product candidates are AZ-001 (Staccato Prochlorperazine), AZ-104 (Staccato Loxapine; used for migraine headaches), AZ-002 (Staccato Alprazolam), AZ-003 (Staccato Fentanyl) and AZ-007 (Staccato Zaleplon). Alexza has completed an end-of-Phase 2 meeting with the FDA for AZ-001 (Staccato Prochlorperazine) and has completed two Phase 2 studies with AZ-104 (Staccato Loxapine, low-dose). Both product candidates are being developed for the acute treatment of migraine headache. AZ-002 (Staccato Alprazolam) has completed Phase 1 testing and one Phase 2a proof-of-concept clinical trial. Product candidates that have completed Phase 1 testing are AZ-003 (Staccato Fentanyl) for the treatment of breakthrough pain and AZ-007 (Staccato Zaleplon) for the treatment of insomnia. Alexza is also beginning development of Staccato Nicotine for to use of smoking cessation.
(PART EIGHT - AZ-007 STACCATO ZALEPLON)
On July 12, 2010, Alexza Pharmaceuticals announced that it has selected AZ-007 (Staccato Zaleplon) as the next product candidate to move forward into active development. Alexza is developing AZ-007 (Staccato Zaleplon) for the treatment of insomnia in patients who have difficulty falling asleep, including those patients who awake in the middle of the night and have difficulty falling back asleep. Zaleplon, a non-benzodiazepine hypnotic currently approved to treat insomnia, has a pharmacokinetic half-life of about one hour and is generally well tolerated in patients. Alexza is planning on doing two Phase 2 clinical studies in a sleep lab for AZ-007; currently anticipated to begin in 2011. Alexza is expecting to see data from at least one of the studies, and perhaps both studies, before the end of 2011.
In a Phase 1 clinical trial, AZ-007 delivered an IV-like pharmacokinetic profile with a median time to peak plasma concentration for the drug of 1.6 minutes. Pharmacodynamics, measured as sedation assessed on a 100 mm visual analog scale, showed onset of effect as early as 2 minutes after dosing with AZ-007. AZ-007 was dose-proportional across the four dosage strengths studied in this clinical trial, and was generally safe and well tolerated in this volunteer population.
(PART NINE - ADDICERE THERAPEUTICS AND STACCATO NICOTINE)
On June 12, 2010 Alexza Pharmaceuticals announced that they created Addicere Therapeutics, Inc, a wholly-owned subsidiary, to develop all applications of the Staccato technology for the pharmaceutical uses of nicotine. Accidere is independently perusing funding to develop Staccato Nicotine either through a traditional venture capital financing pathway or through a partnering collaboration. Post financing, Alexza intends to maintain a minority share holding in Accidere to allow Alexza stockholders the opportunity to participate in future successes of the development in Staccato Nicotine.
In 2008, Alexza scientists were able to create nicotine salts that yielded nicotine aerosols of high purity. Alexza, under Addicere Therapeutics, plans to develop a multi-dose Staccato Nicotine product for use in the smoking cessation market. Addicere Therapeutica plans to develop a Staccato Nicotine multi-dose device to address both the chemical and behavioral components of nicotine addiction by combining nicotine replacement with a user-friendly drug delivery device that will help smokers reduce or eliminate their smoking habit. Addicere believes the Staccato technology is capable of mimicking the pharmacokinetics of smoking cigarettes through the delivery of optimally-sized nicotine particles to the deep lung. Staccato nicotine may also provide some of the psychological aspects of smoking (e.g., hand-to-mouth movement, oral inhalation) and could allow smokers to self-administer and possibly titrate to the dose to treat cravings. Importantly, the electronics embedded within the Staccato delivery system could allow for the programmed, over-time reduction in the overall daily dose of nicotine, and ultimately may lead to the better management of nicotine cravings and eventual sustained smoking cessation.
(PART TEN - THE COMPANY FINANCES)
During Alexza's most recent earnings release and conference call on July 26, 2010, Alexza announced that they currently have enough money to fund their planned operations through the second quarter of 2011. If milestones are met under the Biovail Corporation (BVF) deal, they will have enough money to fund their operations into 2012. As of June 30, 2010, Alexza has 41.7 million dollars in consolidated cash, cash equivalents and marketable securities. On May 5, 2010, Alexza executed a 15 million dollar loan with Hercules Technology Growth Capital. Alexza is also eligible for up to 90 million dollars in milestones payments from Biovail Laboratories, explained below. On May 26, 2010, Alexza announced that they secured a 25 Million dollar Committed Equity Financing Facility, replacing their previous financing facility deal established in 2008. Alexza is free to execute all, some or none of this 25 million dollar financing facility deal anytime between now and May 2012.
On August 5, 2010, Alexza announced that they entered into definitive agreements with a select group of institutional investors to raise approximately $18.0 million in gross proceeds in a registered direct offering through the sale of common stock and warrants. Alexza estimates that net proceeds from the offering will be approximately $16.4 million, after deducting placement agents' commissions and estimated offering expenses. The Company intends to use the net proceeds from the sale of the securities primarily for general corporate purposes, including clinical trial, research and development, general and administrative and manufacturing expenses. Approximately $10.0 million has been earmarked for use in the clinical development of AZ-007.
Alexza Pharmaceuticals partnered with Biovail Corporation (BVF), Canada's single largest pharmaceutical company, operating internationally in all aspects of pharmaceutical products. In February 2010, Alexza established a collaboration with Biovail Laboratories International SRL, a subsidiary of Biovail Corporation, to develop and commercialize AZ-004 in the United States and Canada.
Under the terms of the collaboration, Alexza is entitled to receive an upfront cash payment of $40 million, up to $90 million in potential milestone payments contingent on the successful approval of the AZ-004 NDA and other milestones. These other milestones are first product shipment of AZ-004 and outpatient setting approval. Each separate milestone will trigger a separate milestone payment, with all three totaling $90 million.
Alexza is to manufacturer and supply Biovail with the finished AZ-004 product and will receive a fixed transfer price based on annual volume, as well as a royalty on sales of the AZ-004 product. Royalty payments for AZ-004 production sales range from 10% to 25%. These royalty payments increase as a function of sales. As sales of the AZ-004 product increase, so does the royalty percentage.
(PART ELEVEN - COMPANY EXECUTIVES)
Alexza Pharmaceuticals President and CEO, Thomas B. King, has over 16-years of experience working in the pharmaceutical industry. He has been President and CEO of Alexza Pharmaceuticals since 2003 (being with the company ever since its IND filing in 2004). Before he joined Alexza Pharmaceuticals, Mr. King served as President, Chief Executive Officer and a member of the board of directors of Cognetix, Inc., a biopharmaceutical development company. In addition, from January 1994 to February 2001, Mr. King held various senior executive positions at Anesta Corporation, a publicly-traded pharmaceutical company, including President and Chief Executive Officer from January 1997 to October 2000, and was a member of the board of directors until it was acquired by Cephalon, Inc., a publicly-traded biopharmaceutical company. Mr. King is a member of the board of directors of Achaogen, Inc., a privately-held biotechnology company.
Alexza Pharmaceuticals CFO August J. Moretti has served as Alexza's Senior Vice President and Chief Financial Officer since February 2005 and as their Secretary since December 2005. From August 2004 to February 2005, Mr. Moretti was their part time Chief Financial Officer. From January 2001 to January 2005, Mr. Moretti served as Chief Financial Officer and General Counsel at Alavita, Inc. (formerly known as SurroMed, Inc.), a biotechnology company. From January 1982 to December 2000, Mr. Moretti was a member of Heller Ehrman White & McAuliffe LLP, an international law firm.
(PART TWELVE - OTHER COMPANY BUSINESS)
Commercial manufacturing will be done by Alexza at their Mountain View facility in California. Currently Alexza's total annual capacity is 3.5 million units of AZ-004. With modifications and an additional manufacturing equipment suite, Alexza will be able to manufacture 7 million units of AZ-004 a year at their facility. Alexza is expected to begin purchasing manufacturing components and raw materials for AZ-004 after approval.
Alexza seeking to maximize the value of AZ-004 by looking to license AZ-004 outside or North America. The company is currently engages in ongoing discussion with multiple parties in order to sell AZ-004 in Europe. They are planning to file AZ-004 for approval in Europe and hope to do by in early 2011 and have a meeting already scheduled with the European authorities during early 2011. Alexza has previously had several meetings with the European authorities about both the Staccato System device and AZ-004 specifically.
Disclosure: Long ALXA
Summary of Alexza Pharmaceuticals