MOUNTAIN VIEW, Calif.,
May 6, 2015 /PRNewswire/ -- Alexza
Pharmaceuticals, Inc. (Nasdaq: ALXA) today reported financial
results for the quarter ended March
31, 2015. The net loss and the loss from operations
for the first quarter were $0.4
million and $13.0 million,
respectively, compared to $10.7
million and $8.8 million
during the same quarter in 2014, respectively. At
March 31, 2015, Alexza had
consolidated cash, cash equivalents, marketable securities, and
restricted cash of $23.9 million.
"We continue to focus on ways in which to drive value in Alexza
and our validated Staccato® platform, including
continuing the development of AZ-002 (Staccato alprazolam)
and AZ-007 (Staccato zaleplon), and in evaluating licensing
opportunities for our Staccato technology and opportunities
to license ADASUVE in geographies that are not currently
partnered," said Thomas B. King,
President and Chief Executive Officer of Alexza
Pharmaceuticals. "Another key component to that strategy is
the need to reduce cost of goods for ADASUVE, which have been
unsustainably high during the launch stage of the product."
King continued, "To date, ADASUVE sales have been lower than
originally projected, reflecting the challenges of launching a
novel hospital-based product. We believe the sales during the
initial global launch of ADASUVE do not reflect the clinical
benefits ADASUVE can convey to patients, and we remain confident in
ADASUVE's long-term commercial prospects. At the same time,
we realize that we cannot sustain a commercial production facility
with capacity that exceeds the initial uptake of the product, and
we must look to increase efficiencies and reduce the costs of
producing ADASUVE."
During 2013 and 2014, Alexza completed production of ADASUVE for
commercial launch and initial stocking, which did not utilize
Alexza's full manufacturing capacity. In collaboration with
Teva and Ferrer, Alexza conducted an analysis to evaluate need for
the product and cost-effective strategies for ADASUVE commercial
production. The analysis included supply chain requirements,
production volume and timelines, commercial batch sizes and
possible scenarios to make global production more efficient and
cost-effective. Earlier this year, Teva and Ferrer provided
longer-term ADASUVE orders, allowing Alexza to manufacture ADASUVE
in a consistent manner to take advantage of the efficiencies of
continued batch production.
Alexza plans to produce ADASUVE until early in the third quarter
of 2015. Once existing orders are filled and shipped, the
Company intends to suspend ADASUVE commercial production operations
and resume commercial production in the future as additional
commercial product is required by Teva and Ferrer. As the
Company considers future commercial manufacturing strategies, it
may also seek third parties who could manufacture ADASUVE on a more
efficient basis, possibly in multi-product facilities.
Robert A. Lippe, Executive Vice
President, Operations and Chief Operations Officer of Alexza said,
"Balancing the manufacturing supply and demand can be challenging
during the launch stage of any drug. It is more important
with ADASUVE, as we have high manufacturing costs associated with
our production facility that is not being used at full
capacity. The shelf life of the product provides additional
flexibility in building longer-term inventories for Teva and
Ferrer. This, in turn, allows us to suspend production, which
we believe will reduce costs."
Antoni Villaró, Chief Operating Officer of Ferrer, commented,
"We are very pleased at Ferrer with Alexza's decision to increase
the efficiency of production. To campaign production of
specific products is a common practice at multiproduct
manufacturing sites and has impact on financial management of
industrial operations. On the commercial side, we continue to
receive positive feedback from the physicians that are using
ADASUVE and we strongly believe that sales will continue to grow as
the product is included progressively in hospital formularies."
Additional Alexza Business Updates
- Ferrer currently markets ADASUVE in 14 EU countries. As of
May 2015, Ferrer has also received
ADASUVE approval in seven Latin American countries and currently
markets the product in Guatemala.
Ferrer anticipates additional EU member states and Latin American
country approvals and launches in 2015 and 2016.
- During the first quarter, Teva continued its commercial efforts
with ADASUVE in the U.S., targeted to hospitals and healthcare
professionals.
- Five posters, prepared by EU physicians who have administered
ADASUVE on multiple occasions, were presented and positively
received at the 23rd European Congress of Psychiatry,
held in Vienna in March 2015. These posters describe case studies
of ADASUVE use in various patient populations where once
administered, ADASUVE effectively treated the agitation in these
patients.
- In January 2015, Alexza initiated
a Phase 2a study of AZ-002 (Staccato alprazolam), which is
being developed for the management of epilepsy in patients with
acute repetitive seizures (ARS). ARS occurs in a subset of patients
with epilepsy who regularly experience breakthrough seizures,
despite treatment with a regular regimen of anti-epileptic drugs.
Data from this study is expected later in 2015.
- During the first quarter, Alexza prepared its AZ-007
(Staccato zaleplon) program to initiate a Phase 2 study,
subject to receiving additional funding. AZ-007 is being developed
for the treatment of insomnia, including those patients with middle
of the night awakening who have difficulty falling back
asleep.
- Teva and Alexza completed enrollment in their clinical study to
assess the safety and pharmacokinetics of ADASUVE at doses of 2.5,
5 and 10 mg in adolescents. Teva and Alexza believe that data from
this Phase 1 study may provide dosing information for potential
follow-on efficacy and safety studies in adolescents.
- During the second quarter of 2014, Alexza initiated the ADASUVE
PASS (Post-Approval Safety Study) and DUS (Drug Utilization Study)
clinical trials in the EU. Both studies are part of the
post-approval requirements of the EMA approval for ADASUVE and are
active. Through pharmacovigilance reporting and these two studies,
there have been no identified safety concerns and no reported cases
of bronchospasm.
- In April, Alexza announced two management promotions. Dr.
Edwin S. Kamemoto was promoted to
the newly created position of Executive Vice President, R&D and
Quality. In this new role, Dr. Kamemoto will be responsible for
research and development, regulatory affairs, clinical research,
pharmacovigilance, and the quality functions at Alexza. Dr.
Lori H. Takahashi was promoted to
the newly created position of Vice President, Pharmaceutical
R&D and Quality. In this new role, Dr. Takahashi will be
responsible for product research and development, toxicology,
pharmacokinetics/ADME, analytical development, and day-to-day
leadership of the quality functions at Alexza.
Financial Results - Periods Ended March
31, 2015 and 2014
Alexza recorded revenues of $0.7
million and $2.2 million in
the quarters ended March 31, 2015 and
2014, respectively. Revenues consist of: i) product sales
from units of ADASUVE sold to Teva and Ferrer, ii) the amortization
of the upfront payments received from Ferrer, iii) milestone
revenues from Ferrer, iv) royalty revenues from Teva for U.S. sales
and v) licensing revenues.
|
Three Months
Ended
|
March
31,
|
(thousands)
|
2015
|
|
2014
|
Product
revenues
|
$
87
|
|
$
438
|
Amortization of
upfront payments
|
613
|
|
728
|
Milestone
revenue
|
-
|
|
1,000
|
Royalty
revenue
|
5
|
|
-
|
Total
revenues
|
$
705
|
|
$ 2,166
|
GAAP operating expenses were $13.7
million and $11.0 million in
the quarters ended March 31, 2015 and
2014, respectively.
Cost of goods sold were $6.1
million and $3.8 million
during the quarters ended March 31,
2015 and 2014, respectively. Alexza is in the early
stages of commercialization and has incurred significantly higher
than normal indirect costs in the production of its
inventory. These costs are associated with manufacturing
start-up costs and low production volumes, and Alexza expects to
continue to incur higher than normal indirect costs until it gets
closer to normal manufacturing capacity. In 2015, as a result
of the uncertainty of future production as a result of revised
sales forecasts, Alexza expensed $1.2
million of inventory with fixed expiration dates that would
not be utilized prior to the suspension of its commercial
production operations and it had an impairment charge of
$1.4 million related to its
manufacturing equipment.
Research and development expenses were $3.8 million and 3.1 million in the quarters
ended March 31, 2015 and 2014,
respectively. The increase in research and development expenses in
2015 as compared to 2014 is primarily due to the start of the Phase
2a clinical trial for AZ-002 and continued work related to the MAA
post-approval commitments.
General and administrative expenses were at $3.7 million and $4.0
million during the three months ended March 31, 2015
and 2014, respectively. This decrease was primarily due to a
decrease in share-based compensation expense, a result of fewer
equity awards outstanding.
In connection with Alexza's purchase of Symphony Allegro, Inc.,
or Allegro, in 2009, Alexza is obligated to make contingent cash
payments to the former Allegro stockholders related to certain
payments received by Alexza pertaining to ADASUVE/AZ-104
(Staccato loxapine) or AZ-002 (Staccato
alprazolam). In order to estimate the fair value of the
liability associated with the contingent cash payments, Alexza
prepared several cash flow scenarios for ADASUVE, AZ-104 and
AZ-002, which are subject to the contingent payment
obligation. Each potential cash flow scenario consisted of
assumptions of the range of estimated milestone and license
payments potentially receivable from such collaborations and
assumed royalties received from future product sales. Based
on these estimates, Alexza computed the estimated payments to be
made to the former Allegro stockholders. During the first quarter
of 2015, Alexza revised the projected uptake of ADASUVE in the U.S.
market. The change in product uptake, and the timing of related
sales milestone payments, resulted in Alexza recognizing a
non-operating, non-cash gain of $14.8
million.
Alexza believes that, based on its cash, cash equivalents,
marketable securities and restricted cash balances at March 31, 2015, estimated product revenues,
milestone payments associated with the sale of ADASUVE, and its
current expected cash usage, it has sufficient capital resources to
meet its anticipated cash needs into the fourth quarter of
2015. In light of its ongoing costs, investments in ADASUVE
manufacturing and product candidate development, and its projected
working capital needs, Alexza expects to need to source additional
capital to finance its ongoing operations in the next twelve
months. Changing circumstances may cause Alexza to consume
capital significantly faster or slower than it currently
anticipates, or to alter its operations.
Conference Call Information - 5:00 p.m.
Eastern Time on May 6,
2015
To access the webcast via the Internet, go to www.alexza.com, under
the "Investors" link. Please log onto the webcast prior to the
start of the call to ensure time for any software downloads that
may be required to participate in the webcast.
LIVE CALL:
1-877-870-4263 or +1-412-317-0790
(international)
Passcode: Please request the Alexza Pharmaceuticals conference
call
REPLAY:
1-877-344-7529 or +1-412-317-0088
(international)
Passcode: 10063923
A replay of the conference call may also be accessed at
www.alexza.com under the "Investors" link. A replay of the
call will be available for 7 days following the event.
About Alexza Pharmaceuticals, Inc.
Alexza Pharmaceuticals is focused on the research, development, and
commercialization of novel, proprietary products for the acute
treatment of central nervous system conditions. Alexza's
products are based on the Staccato® system, a hand-held
inhaler designed to deliver a drug aerosol to the deep lung,
providing rapid systemic delivery and therapeutic onset, in a
simple, non-invasive manner.
ADASUVE®, Alexza's first commercial product, is based
on the Staccato system and has been approved for sale by the
U.S. Food and Drug Administration, the European Commission,
and in several Latin American countries. ADASUVE is currently
being marketed in fourteen EU member countries, the United States, and one country in Latin
America. ADASUVE has been approved in seven additional
countries in Latin America.
Teva Pharmaceuticals USA, Inc.,
a subsidiary of Teva Pharmaceutical Industries Ltd., is Alexza's
commercial partner for ADASUVE in the United States. Grupo
Ferrer Internacional SA is Alexza's commercial partner for ADASUVE
in Europe, Latin America, and the Commonwealth of
Independent States countries.
ADASUVE® and Staccato® are registered
trademarks of Alexza Pharmaceuticals, Inc. For more
information, please visit www.alexza.com.
Safe Harbor Statement
Alexza's policy is to provide
guidance on product candidates and corporate goals only 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 and corporate milestones guidance is as of May 6, 2015 and financial guidance relating to
the Company's current cash, cash equivalents, and marketable
securities is based upon balances as of March 31, 2015.
This news release contains forward-looking statements that
involve significant risks and uncertainties. Any statement
describing the Company's 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, including the ability of
Alexza and its partners, Teva and Ferrer, to effectively and
profitably commercialize ADASUVE, estimated product revenues and
royalties associated with the sale of ADASUVE, the adequacy of the
Company's capital to support the Company's operations, and the
Company's ability to raise additional funds and the potential terms
of such potential financings. 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, 2014 and the
Company's other Periodic and Current Reports filed with the
Securities and Exchange Commission. Forward-looking statements
contained in this announcement are made as of this date, and the
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
ALEXZA
PHARMACEUTICALS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share amounts)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2015
|
|
2014
|
Revenue
|
705
|
|
2,166
|
|
|
|
|
Operating
expenses:
|
|
|
|
Cost of
goods sold
|
6,147
|
|
3,791
|
Research and development
|
3,824
|
|
3,130
|
General and administrative
|
3,737
|
|
4,048
|
Total operating
expenses
|
13,708
|
|
10,969
|
|
|
|
|
Loss from
operations
|
(13,003)
|
|
(8,803)
|
|
|
|
|
(Loss)/gain on change
in fair value of contingent consideration liability
|
14,833
|
|
(1,150)
|
Interest and other
income/ (expense), net
|
(5)
|
|
6
|
Interest
expense
|
(2,229)
|
|
(788)
|
Net
loss
|
$
(404)
|
|
$
(10,735)
|
Basic and diluted net
loss per share
|
$
(0.02)
|
|
$
(0.62)
|
ALEXZA
PHARMACEUTICALS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014(1)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 11,093
|
|
$
15,200
|
|
Marketable
securities
|
11,427
|
|
19,574
|
|
Receivables
|
99
|
|
173
|
|
Inventory
|
2,472
|
|
3,729
|
|
Prepaid expenses and
other current assets
|
2,169
|
|
3,109
|
Total current
assets
|
27,260
|
|
41,785
|
|
|
|
|
|
Property and
equipment, net
|
11,693
|
|
13,953
|
Restricted
cash
|
1,361
|
|
2,757
|
Other
assets
|
2,856
|
|
3,065
|
Total
assets
|
$ 43,170
|
|
$
61,560
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Total current
liabilities
|
8,241
|
|
11,517
|
Total noncurrent
liabilities
|
86,596
|
|
101,696
|
Total stockholders'
deficit
|
$ (51,667)
|
|
$
(51,653)
|
Total liabilities and
stockholders' deficit
|
$
43,170
|
|
$
61,560
|
|
|
(1)
|
Derived from the
audit financial statements on that date.
|
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SOURCE Alexza Pharmaceuticals, Inc.