Alexza Reports 2008 Second Quarter Financial Results and Updates Development of Product Candidates
MOUNTAIN VIEW, Calif., Aug. 6 /EMWNews/ -- Alexza Pharmaceuticals, Inc. (Nasdaq: ALXA) reported today financial results for the quarter and six month period ended June 30, 2008 and provided an update on the Company's progress with its product development candidates. The net loss for the quarter and six month period ended June 30, 2008, as reported in accordance with accounting principles generally accepted in the United States (GAAP), was $14.1 million and $28.7 million, respectively, compared to a net loss of $10.3 million and $21.2 million in the comparable periods in 2007. Alexza had consolidated cash, cash equivalents and marketable securities (including investments held by Symphony Allegro) at June 30, 2008 of $95.3 million. "Alexza continues to make significant progress with our lead program, AZ-004 (Staccato(R) loxapine), which is being developed for the treatment of acute agitation in schizophrenic or bipolar disorder patients," said Thomas B. King, President and CEO of Alexza. "During the first seven months of 2008, we initiated and completed the dosing of our first AZ-004 Phase 3 clinical trial, and have initiated dosing of our second AZ-004 Phase 3 clinical trial. In addition, we had clinical readouts from clinical trials with AZ-104, AZ-007 and AZ-002. We are also scaling up our manufacturing, quality systems, regulatory affairs and commercial operations as we prepare for the future commercialization of AZ-004." Financial Results - Periods Ended June 30, 2008 and 2007 GAAP operating expenses were $20.5 million and $39.7 million in the quarter and six month period ended June 30, 2008, compared to $14.2 million and $28.0 million for the comparable periods in 2007. The increases resulted primarily from increased spending on AZ-004 and AZ-104 as the Company continued development of these product candidates under the Symphony Allegro agreement, increased spending on AZ-003 with continued development of this product candidate under the development agreement with Endo Pharmaceuticals, increased spending for device development and manufacturing process scale-up efforts, increased personnel-related costs to support these efforts, and increased share-based compensation costs. On January 1, 2006, Alexza adopted FAS 123R and reports employee share-based compensation expense based on the fair value of the award. Share-based compensation was $1,447,000 and $2,638,000 in the quarter and six month period ended June 30, 2008 compared to $557,000 and $1,276,000 in the comparable periods in 2007. Alexza's Consolidated Statements of Operations include the operations of Symphony Allegro, Inc., its variable interest entity. As the Company has no direct ownership in Allegro, it reduces its net loss by the losses incurred by Allegro. "Loss attributed to noncontrolling interest in Symphony Allegro, Inc." reduced net loss for the quarter and six month period ended June 30, 2008 by $5.9 million and $9.6 million, and reduced net loss by $2.6 million and $4.7 million in the comparable periods in 2007. Product Candidates Development Update -- AZ-004 (Staccato loxapine). Alexza is developing AZ-004 for the treatment of acute agitation in patients with schizophrenia or bipolar disorder. In June 2008, the Company completed enrollment in its first Phase 3 clinical trial of 344 schizophrenic patients with acute agitation at 24 U.S. clinical centers. The trial was an in-clinic, multi-center, randomized, double-blind, placebo-controlled study and tested AZ-004 at two dose levels, 5 and 10 mg. Patients received up to three doses of study drug in a 24-hour period, depending on their clinical status. The primary endpoint for the study is the change from baseline in the PANSS (Positive and Negative Symptom Scale) Excited Component (PEC) score, measured at two hours after the first dose. Various assessments of a patient's agitation state were conducted at serial time points using standard agitation scales over the first 4-hour post- dose time period, with follow-up assessments at the end of the 24-hour study period. Side effects were recorded throughout the 24-hour period. The Company expects to release initial results of this trial before the end of September 2008. A second Phase 3 clinical trial was initiated in July 2008 and is designed to enroll approximately 300 patients diagnosed with bipolar I disorder and acute agitation at 18 U.S. clinical centers. The trial is an in-clinic, multicenter, randomized, double-blind, placebo-controlled study and will test AZ-004 at two dose levels, 5 and 10 mg. Patients may receive up to three doses of study drug in a 24-hour period, depending on their clinical status. Patients eligible for the study include those who are admitted through an emergency department and those who are already in-patients in a hospital setting, as long as they have acute agitation at the time of patient randomization. This study is the first AZ-004 study enrolling bipolar disorder patients. The Company projects that this second Phase 3 clinical trial will take approximately 12 months to complete patient enrollment. The primary endpoint for the study is the change from baseline in the PEC score, measured at two hours after the first dose. Various assessments of a patient's agitation state will be conducted at serial time points using standard agitation scales over the first 4-hour post-dose time period, with follow-up assessments at the end of the 24-hour study period. Side effects will be recorded throughout the 24-hour period. AZ-004 has been licensed to Symphony Allegro, Inc., or Symphony Allegro, and Alexza has the right to repurchase all rights to this product candidate. -- AZ-001 (Staccato prochlorperazine). Alexza is developing AZ-001 to treat patients suffering from acute migraine headaches. Alexza requested an end of Phase 2 meeting with the FDA during the second quarter of 2008 and has been granted this meeting for the third quarter of 2008. -- AZ-104 (Staccato loxapine). Alexza is developing AZ-104 to treat patients suffering from acute migraine headaches. AZ-104 is a lower dose version of AZ-004. In March 2008, the Company announced initial results of an in-clinic, multi-center randomized, double-blind, single administration, placebo controlled Phase 2a proof-of-concept clinical trial in 168 migraine patients with or without aura. Three doses of AZ-104 (1.25, 2.5 and 5 mg) were evaluated against placebo in the clinical trial. Using the IHS 4-point rating scale, the primary efficacy endpoint was pain-relief response at 2 hours post-administration. AZ-104 met the primary efficacy endpoint of the clinical trial for the two highest doses of the drug compared to placebo. Statistically significant improvements in pain response were observed in 76.7% of patients at the 5 mg dose (p= 0.02), 79.1% of patients at the 2.5 mg dose (p = 0.01) and 67.4% of patients at the 1.25 mg dose (p = 0.18), compared to 51.3% of patients receiving placebo. Using survival analysis for pain relief response, all three dose groups were statistically superior (p http://www.alexza.com, under the "Investor Relations" link. Please join the call at least 15 minutes prior to the start of the call to ensure time for any software downloads that may be required. Interested parties may also pre-register to avoid pre-call delays at https://www.theconferencingservice.com/prereg/key.process?key=PHY9DE66U. To access the live conference call via phone, dial 888-680-0894. International callers may access the live call by dialing 617-213-4860. The reference number to enter the call is 37382979. The replay of the conference call may be accessed via the Internet, at http://www.alexza.com, or via phone at 888-286-8010 for domestic callers or 617-801-6888 for international callers. The reference number for the replay of the call is 47372481.
About Alexza Pharmaceuticals Alexza Pharmaceuticals is an emerging specialty pharmaceutical company focused on the development and commercialization of novel, proprietary products for the treatment of acute and intermittent conditions. The Company's technology, the Staccato system, 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. Alexza has six product candidates in clinical development. Alexza's lead program, AZ-004 (Staccato loxapine) for the treatment of acute agitation in schizophrenic or bipolar disorder patients, is in Phase 3 testing and completed the enrollment of its first Phase 3 clinical trial in June 2008. AZ-001 (Staccato prochlorperazine) for the acute treatment of migraine headaches has completed Phase 2 testing. AZ-104 (Staccato loxapine) for the acute treatment of migraine headaches and AZ-002 (Staccato alprazolam) for the acute treatment of panic attacks associated with panic disorder are in Phase 2 testing. Product candidates in Phase 1 testing are AZ-003 (Staccato fentanyl) for the treatment of breakthrough pain, which is partnered with Endo Pharmaceuticals in North America, and AZ-007 (Staccato zaleplon) for the treatment of insomnia. More information, including this and past press releases from Alexza, is available online at http://www.alexza.com. Safe Harbor Statement Alexza's policy is to only provide guidance on product candidates and corporate goals for the future one to two fiscal quarters, and to provide, update or reconfirm its guidance only by issuing a press release or filing updated guidance with the SEC in a publicly accessible document. Clinical guidance is as of August 6, 2008 and financial guidance relating to the Company's current cash, cash equivalents and investments is as of June 30, 2008. This press release includes forward-looking statements regarding the development of the Company's product candidates, projected clinical trial enrollment and data reporting timelines, and safety of the Company's products and technologies. Any statement describing a product candidate or Alexza's goals, expectations or beliefs is a forward-looking statement, as defined in the Private Securities Litigation Reform Act of 1995, and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of developing and commercializing drugs. The Company's forward-looking statements also involve assumptions that, if they prove incorrect, would cause its results to differ materially from those expressed or implied by such forward-looking statements. These and other risks concerning Alexza's business are described in additional detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, and the Company's other Periodic and Current Reports filed with the Securities and Exchange Commission including the risks under the headings "We have a history of net losses. We expect to continue to incur substantial and increasing net losses for the foreseeable future, and we may never achieve or maintain profitability.", "We will need substantial additional capital in the future. If additional capital is not available, we will have to delay, reduce or cease operations.", "Failure or delay in commencing or completing clinical trials for our product candidates could harm our business.", and "If our product candidates do not meet safety and efficacy endpoints in clinical trials, they will not receive regulatory approval, and we will be unable to market them." Forward-looking statements contained in this announcement are made as of this date, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Alexza Pharmaceuticals, Inc. (a development stage company) Condensed Consolidated Statements of Operations (unaudited, in thousands except per share data) Period from December 19, 2000 Three Months Ended Six Months Ended (inception) to June 30, June 30, June 30, 2008 2007 2008 2007 2008 Revenue $- $- $- $- $6,945 Operating expenses: Research and development 15,698 10,142 30,391 20,377 173,509 General and administrative 4,802 4,017 9,264 7,602 54,327 Acquired in-process research and development - - - - 3,916 Total operating expenses 20,500 14,159 39,655 27,979 231,752 Loss from operations (20,500) (14,159) (39,655) (27,979) (224,807) Interest and other income, net 729 1,481 1,809 2,538 13,001 Interest expense (242) (244) (533) (479) (3,179) Loss before noncontrolling interest in Symphony Allegro, Inc. (20,013) (12,922) (38,379) (25,920) (214,985) Loss attributed to noncontrolling interest in Symphony Allegro, Inc. 5,891 2,644 9,648 4,726 22,159 Net loss $(14,122) $(10,278) $(28,731) $(21,194) $(192,826) Basic and diluted net loss per share $(0.43) $(0.36) $(0.90) $(0.81) Shares used to compute basic and diluted net loss per share 32,532 28,480 31,879 26,175 Alexza Pharmaceuticals, Inc. (a development stage enterprise) Condensed Consolidated Balance Sheets (in thousands) June 30, December 31, 2008 2007 Unaudited (1) Assets Cash, cash equivalents and marketable securities $64,005 $69,391 Investments held by Symphony Allegro, Inc. 31,310 39,449 Other current assets 996 13,432 Total current assets 96,311 122,272 Property and equipment, net 25,302 26,156 Other non-current assets 666 697 Total assets $122,279 $149,125 Liabilities, noncontrolling interest and stockholders' equity Current liabilities $16,453 $16,180 Non-current liabilities 30,826 33,002 Noncontrolling interest in Symphony Allegro, Inc. 14,304 23,952 Stockholders equity 60,696 75,991 Total liabilities, non controlling interest and stockholders' equity $122,279 $149,125 (1) Derived from audited consolidated financial statements at that date.
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