Alexza Pharmaceuticals, Inc. (ALXA)

Alexza Pharmaceuticals, Inc. (ALXA) is a typical small-cap Pharmaceutical company with market capitalization of $ 97.38 million as of November 4, 2011.

The key technology that Alexa has is called Staccato system, which vaporizes unformulated drug to form a condensation aerosol that, when inhaled, allows for rapid systemic drug delivery.  The speed of therapeutic onset would be comparable to intravenous administration, and with greater ease, patient comfort and convenience.

In 2006, when this firm went public, there were already 4 main candidates in its pipeline: AZ-001 (Staccato prochlorperazine)to treat patients suffering from acute migraine headaches; AZ-002 (Staccato alprazolam) to treat panic attacks associated with panic disorder; Z-003 (Staccato fentanyl) to treat patients with acute pain; and AZ-004 (Staccato loxapine) to treat acute agitation in patients with schizophrenia.

In 2009, it turned out AZ-004 is the lead candidate, for which, the New Drug Application (NDA) was submitted to the FDA in December 2009. And in February next year, Alexza entered the agreement with Biovail Laboratories International SRL for the U.S. and Canadian commercial rights. The upfront fee was $40 million, and Alexa may be eligible to receive up to an additional $90 million in milestone payments upon achievement of predetermined regulatory, clinical and commercial manufacturing milestones.

However, in October 2010, the Complete Response Letter was received. End-of-view meeting with the FDA in December 2010 and a Risk Evaluation and Mitigation Strategy (REMS) guidance meeting with the FDA was held in April 2011. The NDA was resubmitted on August 4, 2011, and has a Prescription Drug User Fee Act (PDUFA) goal date of February 4, 2012.

In October 2011, Biovail Laboratories International SRL, which had a license agreement with Alexza for AZ-004, terminated this relationship upon the CRL from the FDA. However, Alexza established a commercial partnership for AZ-004 with Grupo Ferrer International, S. A in the same month. Alexa filed its Marketing Authorization Application (MAA) for ZA-004 with the European Medicines Agency (EMA) in October 2011.

The stock price has tumbled to $1.1 per share by the end of September 2011, while the price in the previous year was $3.1 per share. When one is verdict failure, It is very hard for a company or a person to rise up. This happens frequently in the relationship between Biopharmaceutical industry and the FDA. The important thing to do is not complaining but to look into the concerns stated in the Complete Response Letter and communicate to the FDA.

Here are the main issues raised by the FDA.

The primary safety concern is that the device, even in the placebo version, could damage lung function of patients. Alexza provided further data and analysis indicating that were likely background events in the population studied, where the repeated and extensive pulmonary function testing may have contributed to some of the observations.

Alexza also addressed the issue that patients who have asthma and chronic obstructive pulmonary disease (COPD) should be taken care of by specific labeling and a Risk Evaluation and Mitigation Strategy (REMS) program, where Alexza presented the way to identify patients at risk of side effects.

The third one is about the stabilities of the drug and Chemistry, Manufacturing and Controls (CMC). As the device is a crucial part to deliver the drug, Center for Devices and Radiological Health (CDRH) also is involved and it proposed that Alexza test the product under “worst-case” manufacturing scenario. Alexa did the test and believed that this issue was adequately addressed.

If all the data provided by Alexza is really substantial or statistically convincing, the chances are big that AZ-004 can be approved after resubmission. Accordingly, the stock price has picked up since October 2011.

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