MOUNTAIN VIEW, Calif.,
March 28, 2016 /PRNewswire/
-- Alexza Pharmaceuticals, Inc. (Nasdaq: ALXA, "Alexza", or
the "Company") today reported financial results for the quarter and
year ended December 31, 2015.
The net loss for the fourth quarter was $3.0
million compared to $6.7
million during the same quarter in 2014. The net loss
for the years ended December 31, 2015
and 2014 was $21.3 million and
$36.7 million, respectively. At
December 31, 2015, Alexza had
consolidated cash and cash equivalents of $7.8 million.
"We continue our efforts to increase the value of ADASUVE, our
pipeline and of Alexza," said Thomas B.
King, President and CEO of Alexza Pharmaceuticals. "In
the last six months, we have decreased our costs, repositioned our
management team, secured additional financing and continued to work
with Guggenheim to explore strategic options."
King continued, "We continue our discussions with Ferrer
regarding the non-binding letter of intent we executed with them in
February. This transaction would be Ferrer's proposed
acquisition of all outstanding shares of our common stock."
King added, "We recently completed the reacquisition of the
ADASUVE U.S. commercial rights from Teva. We continue to
remain confident in the long-term commercial prospects for ADASUVE
globally. For the ADASUVE U.S. commercial rights, we are
looking into different options for product commercialization.
In the interim, we are managing the commercial and regulatory
aspects of ADASUVE for the U.S. market. We will continue to
evaluate all of our options and pursue the strategy that we believe
will allow us to maximize value for our stockholders."
Alexza believes that, based on its cash and cash equivalent
balances at December 31, 2015, the
additional $1.0 million drawn in
March 2016 under the promissory note
issued to Ferrer in September 2015,
and it's expected cash usage, it has sufficient capital resources
to meet its anticipated cash needs until the end of April 2016. Changing circumstances may
cause the Company to consume capital significantly faster or slower
than currently anticipated, or to alter the Company's operations.
Even if circumstances do not cause Alexza to consume capital
significantly faster or slower than currently anticipated, Alexza
may be forced to significantly reduce operations if its business
prospects do not improve. If Alexza is unable to source
additional capital, it may be forced to shut down operations
altogether.
Alexza Business Updates
- In March 2016, the Nasdaq Listing
Qualifications Panel issued a determination granting Alexza's
request for the continued listing of its common stock on The Nasdaq
Capital Market. Alexza's continued listing on The Nasdaq Capital
Market is subject to, among other things, evidence of Alexza's
compliance with the minimum $35
million market value of listed securities requirement by
June 14, 2016.
- In February 2016, Alexza
announced that it had entered into a non-binding letter of intent
with Ferrer with respect to Ferrer's proposed acquisition of all
outstanding shares of Alexza's stock. The non-binding letter of
intent does not constitute a binding agreement to consummate such
acquisition and it entitles both Alexza and Ferrer to terminate
discussions at any time in either party's sole discretion.
- In February 2016, Alexza
announced that it reacquired the U.S. commercial rights for
ADASUVE® (loxapine) inhalation powder from Teva
Pharmaceuticals USA, Inc., a
subsidiary of Teva Pharmaceutical Industries Ltd. (Teva). Alexza
and Teva also restructured the obligations under the outstanding
note from Teva. In conjunction with the reacquisition of U.S.
commercial rights for ADASUVE, Alexza and Teva have completed a
transition agreement, which is intended to provide continued
availability of ADASUVE by Alexza to patients and health care
providers.
- In December 2015, Alexza
announced interim results of its Phase 2a study of AZ-002
(Staccato® alprazolam) in epilepsy patients. AZ-002
produced a dose-related decrease in mean Standardized
Photosensivity Range, which is the primary endpoint in the study.
There were also dose-related changes in two visual-analogue scales
for sedation and for alertness, which are established
pharmacodynamic markers of benzodiazepine drug activity.
Importantly, in both measures the pharmacodynamic effect was
demonstrated at the two-minute time point, which was the first
assessment in the study, demonstrating the rapid onset of effect of
alprazolam as delivered by the Staccato technology.
- In December 2015, a supplemental
New Drug Application (sNDA) was submitted to the FDA, seeking
certain changes in the product labeling and REMS. The review period
for this sNDA is projected to be six months. In Europe, Ferrer and Alexza have met with
various EU regulatory authorities to explore the potential
expansion of the ADASUVE label in Europe.
- In September 2015, Alexza issued
a promissory note to Ferrer, due and payable upon Ferrer's demand
on May 31, 2016. The terms of the
note provide that Alexza can borrow up $5.0
million from Ferrer. To date, Alexza has made two draws
against the note, (i) a draw for $3.0
million in September 2015 and
(ii) a second draw for $1.0 million
in March 2016.
Financial Results - Periods Ended December 31, 2015 and 2014
Alexza recorded revenues of $0.7
million and $5.0 million in
the quarter and year ended December 31,
2015, respectively, compared to $1.5
million and $5.6 million in
the same periods in 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, and iv) royalty revenues from Teva
for U.S. sales.
Revenues for the quarter and year ended December 31, 2015 and 2014 were as follows (in
thousands):
|
Three Months
Ended
|
|
Twelve Months
Ended
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Product
revenue
|
$ (39)
|
|
$ 918
|
|
$2,355
|
|
$2,564
|
Milestone
revenue
|
—
|
|
—
|
|
—
|
|
1,000
|
Amortization of
upfront payments
|
712
|
|
530
|
|
2,666
|
|
1,987
|
Royalty
revenue
|
—
|
|
6
|
|
5
|
|
10
|
Total
revenues
|
$673
|
|
$1,454
|
|
$5,026
|
|
$5,561
|
GAAP operating expenses were $10.7
million and $45.0 million in
the quarter and year ended December 31,
2015, respectively, and $8.7
million and $43.0 million in
the same periods in 2014, respectively.
Cost of goods sold were $7.2
million and $21.1 million
during the quarter and year ended December
31, 2015, compared to $4.0
million and $15.9 million in
the same periods in 2014, respectively. During the year ended
2015, Alexza completed the fulfillment of the Teva and Ferrer
orders and the suspension of the ADASUVE commercial production
operations in the third quarter of 2015. During the fourth
quarter of 2015, the Company recognized an additional non-cash
impairment charges of $7.2 million
after concluding that the carrying amounts of its
production-related long-lived assets, inventory, and prepayments
exceeded their fair values given its continued operating losses,
the uncertainty of when it will resume commercial production, the
limited ability to sell the capitalized equipment, and its basic
ability to continue as a going concern. The aggregate amount
of non-cash impairment charges in the year 2015 were $10.8 million. There were no impairment
charges in the year ended 2014.
Beginning in the fourth quarter of 2015, though fixed overhead
costs decreased, they were not allocated to cost of goods sold as
production operations were suspended. Larger percentages were
allocated to research and development expenses.
In 2015, Alexza shipped 86,903 units of ADASUVE to Ferrer and
25,341 units of ADASUVE to Teva. In 2014, Alexza shipped
21,209 units of ADASUVE to Ferrer for the EU and Latin American
markets and 74,097 to Teva for the U.S. market.
Research and development expenses were $1.7 million in the quarter and $11.7 million in the year ended December 31, 2015, compared to $3.2 million and $13.7
million in the same periods in 2014, respectively. The
decrease in the fourth quarter and during the year ended 2015 as
compared to the same periods in 2014 was primarily due to the
transfer of certain MAA post-approval commitments for ADASUVE to
Ferrer in June 2015, and a reduction
in Alexza employee headcount. Alexza received a refund of
approximately $0.8 million from a
service provider to settle its account prior to transitioning
certain MAA obligations for ADASUVE to Ferrer. Alexza
anticipates continuing to incur expenses related to its AZ-002
Phase 2a clinical trial, and, if financing is secured, expenses
related to the clinical development of AZ-007. With the
suspension of commercial ADASUVE production operations in the third
quarter of 2015, larger percentages of fixed overhead costs were
allocated to research and development expenses, beginning in the
fourth quarter of 2015.
General and administrative expenses were $1.8 million in the quarter and $12.2 million in the year ended December 31, 2015, as compared to $1.6 million and $13.3
million in the same periods in 2014, respectively. The
decrease in general and administrative expenses during the year
2015 as compared to the year 2014 was primarily due to its
reduction in employee headcount, decreased accounting fees due to
the change in auditors and lower consulting expenses.
In connection with the exercise of Alexza's option to purchase
all of the outstanding equity 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 from future collaboration agreements
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. Payments were
assumed to terminate in accordance with current agreement terms or,
if no agreements exist, upon the expiration of the related
patents.
In 2015, Alexza updated the discounted cash flow model to
reflect the impact of its reacquisition of the U.S. commercial
rights for ADASUVE from Teva by updating the U.S. ADASUVE sales
estimates and partnership milestones, and changing the probability
weightings. Additionally, it updated the estimated sales of
ADASUVE in the Ferrer Territories and changed the timing and amount
of certain milestones for ADASUVE sales outside of the United States and the Ferrer Territories,
and AZ-002. These changes resulted in its recognizing a
non-operating, non-cash gain of $27.1
million in 2015.
In 2014, Alexza modified the assumptions associated with the
amount and timing of milestones and royalties projected for ADASUVE
and AZ-002, the probability that AZ-002 would be licensed or sold
by Alexza, and the effects of the passage of one year on the
present value computation. In addition, it increased the
discount rate used to compute the fair value of the contingent
consideration liability from 16.5% to 20% to reflect an increase in
its estimated weighted average cost of capital. These changes
resulted in a non-operating, non-cash gain of $8.1 million in 2014.
Conference Call Information - 5:00 p.m.
Eastern Time on March 28,
2016
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:
1-844-492-3732 or +1-412-542-4199
(international)
Passcode: Please ask to be joined into the Alexza
Pharmaceuticals call
REPLAY:
1-877-344-7529 or +1-412-317-0088
(international)
Passcode: 10082706
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 conference
call.
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 and development pipeline are based on the
Staccato® system, a hand-held inhaler designed to
deliver a pure drug aerosol to the deep lung, providing rapid
systemic delivery and therapeutic onset, in a simple, non-invasive
manner. Active pipeline product candidates include AZ-002
(Staccato alprazolam) for the management of epilepsy in
patients with acute repetitive seizures and AZ-007 (Staccato
zaleplon) for the treatment of patients with middle of the night
insomnia.
ADASUVE® is Alexza's first commercial product and is
currently available in 20 countries. The product is approved
for sale by the U.S. Food and Drug Administration, the European
Commission and in several Latin American countries. Grupo
Ferrer Internacional SA is Alexza's commercial partner for ADASUVE
in Europe, Latin America, the Commonwealth of Independent
States countries, the Middle East
and North Africa countries, Korea,
Philippines and Thailand.
ADASUVE® and Staccato® are registered
trademarks of Alexza Pharmaceuticals, Inc. For more
information about Alexza, the Staccato system technology or
the Company's development programs, please visit
www.alexza.com.
Safe Harbor Statement
This news release and
associated conference call contain 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 adequacy of the
Company's capital to support the Company's operations, the ability
of Alexza and Ferrer to effectively and profitably commercialize
ADASUVE, Alexza's ability to secure a new U.S. commercial partner
for ADASUVE and the terms of any such partnership, estimated
product revenues and royalties associated with the sale of ADASUVE,
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, 2015 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
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
673
|
|
1,454
|
|
5,026
|
|
5,561
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
goods sold
|
7,175
|
|
3,952
|
|
21,129
|
|
15,925
|
Research and development
|
1,668
|
|
3,195
|
|
11,716
|
|
13,748
|
General and administrative
|
1,813
|
|
1,571
|
|
12,205
|
|
13,344
|
Total operating
expenses
|
10,656
|
|
8,718
|
|
45,050
|
|
43,017
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(9,983)
|
|
(7,264)
|
|
(40,024)
|
|
(37,456)
|
|
|
|
|
|
|
|
|
(Loss)/gain on change
in fair value of contingent consideration liability
|
8,900
|
|
2,800
|
|
27,132
|
|
8,149
|
Interest and other
income/ (expense), net
|
115
|
|
(9)
|
|
28
|
|
13
|
Interest
expense
|
(2,050)
|
|
(2,234)
|
|
(8,446)
|
|
(7,438)
|
Net loss
|
$ (3,018)
|
|
$ (6,707)
|
|
$ (21,310)
|
|
$ (36,732)
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
$ (0.15)
|
|
$ (0.35)
|
|
$ (1.08)
|
|
$ (2.07)
|
ALEXZA
PHARMACEUTICALS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
7,755
|
|
$
15,200
|
|
Marketable
securities
|
—
|
|
19,574
|
|
Receivables
|
—
|
|
173
|
|
Inventory
|
—
|
|
3,729
|
|
Prepaid expenses and
other current assets
|
3,237
|
|
3,109
|
Total current
assets
|
10,992
|
|
41,785
|
|
|
|
|
|
Property and
equipment, net
|
3,320
|
|
13,953
|
Restricted
cash
|
—
|
|
2,757
|
Other
assets
|
419
|
|
3,065
|
Total
assets
|
$
14,731
|
|
$
61,560
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Total current
liabilities
|
58,198
|
|
11,517
|
Total noncurrent
liabilities
|
28,191
|
|
101,696
|
Total stockholders'
deficit
|
(71,658)
|
|
(51,653)
|
Total liabilities and
stockholders' deficit
|
$
14,731
|
|
$
61,560
|
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SOURCE Alexza Pharmaceuticals, Inc.