Alexza Reports Preliminary 2013 Second Quarter Financial Results
Management to Review Results and Provide Business Update in Conference Call
Scheduled Today for 5:00 p.m. Eastern Time
MOUNTAIN VIEW, Calif., Aug. 8, 2013
MOUNTAIN VIEW, Calif., Aug. 8, 2013 /PRNewswire/ -- Alexza Pharmaceuticals,
Inc. (Nasdaq: ALXA) today reported preliminary financial results for the
quarter ended June 30, 2013. The preliminary net loss for the quarter ended
June 30, 2013, was $3.4 million compared to $7.0 million during the same
quarter in 2012. The preliminary net loss for the six months ended June 30,
2013 and 2012, was $24.1 million and $10.8 million, respectively. At June 30,
2013, Alexza had consolidated cash, cash equivalents and marketable securities
of $35.0 million.
"Alexza continues to mark steady progress against our objectives to
commercialize ADASUVE^® and advance our Staccato^® pipeline candidates," said
Thomas B. King, President and CEO of Alexza. "In the second quarter, we
entered into an exclusive agreement with Teva to market ADASUVE in the U.S.
We believe Teva is an ideal partner for ADASUVE, and we are impressed by their
capabilities, commitment and enthusiasm."
King continued, "Most recently, our partner Ferrer initiated sales of ADASUVE
in the European Union, with the first product sale in Germany. In addition,
we are preparing to advance AZ-002 (Staccato alprazolam) for acute repetitive
seizures into Phase 2 clinical studies by year-end."
Alexza Business Updates
oIn May 2013, Alexza entered into an exclusive U.S. license and supply
agreement for ADASUVE with Teva Pharmaceuticals USA, Inc. Teva is
responsible for all U.S. development and commercialization activities for
ADASUVE, including U.S. post-approval clinical studies. Alexza is
responsible for manufacturing and supplying ADASUVE to Teva for commercial
sales and clinical trials.
Alexza received an upfront cash payment of $40 million, $10 million of
which was paid to the former stockholders of Symphony Allegro, Inc.
Alexza is eligible to receive up to $195 million in additional milestone
payments contingent on successful completion of the ADASUVE post-approval
studies in the U.S. and achievement of specified net sales targets. For
product shipped to Teva, Alexza will receive a specified per-unit transfer
price based on costs of commercial production, which transfer price will
convert to a fixed price upon achievement of costs equal to a specified
per-unit price. Teva will make tiered royalty payments based on net
commercial sales of ADASUVE in the U.S.
oIn conjunction with the Teva collaboration, Alexza and Teva entered into a
Convertible Promissory Note and Agreement to Lend. Under the terms of the
Teva Note, Alexza may, upon written notice to Teva, receive advances to
fund an agreed operating budget related to ADASUVE over a two year period.
The aggregate advances may total up to $25 million and any advances will
be due and payable in May 2018. Alexza may prepay, from time to time, up
to one-half of total amounts advanced and interest outstanding at any time
prior to the maturity date. At the maturity date, Teva will have the
right to convert the then outstanding advance amounts, plus accrued
interest, at a conversion price per share of $4.4833.
oIn May 2013, James V. Cassella, PhD, Alexza's Executive Vice President,
Research and Development and Chief Scientific Officer, presented an
overview of the Alexza's AZ-002 (Staccato alprazolam) program at the
Pipeline Session of the Antiepileptic Drug and Device Trials (AED) XII
Conference. Alexza is developing AZ-002 for the treatment of acute
oIn June 2013, Michael S. Holfinger, PhD, joined the Company as Vice
President, Manufacturing & Global Supply Chain Management.
oIn July 2013, Alexza's commercial partner Grupo Ferrer Internacional, S.A.
initiated sales of ADASUVE^® inhalation powder, pre-dispensed (Staccato^®
Loxapine) in in Germany. The first sale and shipment of product by Ferrer
triggers a $1.25 million milestone payment to Alexza.
oIn July 2013, Kelly Seither was promoted to Vice President, Global
Strategic Marketing and New Product Planning and Tatjana Naranda, PhD, was
promoted to Vice President, Business Development and Global Alliance
Preliminary Financial Results - Periods Ended June 30, 2013 and 2012
Alexza recorded preliminary revenues of $40.8 million and $41.6 million in the
three and six months ended June 30, 2013, respectively, compared to $0.7
million and $2.6 million in the same periods in 2012, respectively.
Preliminary revenues in 2013 consist of $40 million of licensing revenues from
Teva, amortization of the upfront payment from the Ferrer agreement, and
transfer pricing of units shipped to Ferrer. Revenues in 2012 represent
amortization of upfront payments earned under the Company's agreements with
Ferrer and Cypress Bioscience.
Alexza is evaluating the revenue recognition of its right-to-borrow under the
Teva Note. The Company believes that the value of this right, if any, would
result in an increase to the reported total assets and revenues in the second
quarter of 2013, and a corresponding decrease to the reported net loss. The
Company plans to record the value, if any, of the right-to-borrow under the
Teva Note as an asset that will be amortized as interest expense over the
two-year period in which Alexza may draw down the Teva Note. Any changes to
today's reported results will be non-cash items and will not increase or
decrease the Company's available cash, cash equivalents or marketable
securities. The Company believes it will have the final valuation of the
right-to-borrow asset, if any, available when it files its Quarterly Report on
Form 10-Q for the period ended June 30, 2013. Because the revenue numbers
reported in this release are preliminary, they may change materially before
they are finalized.
GAAP operating expenses were $12.6 million and $22.9 million in the three and
six months ended June 30, 2013, respectively, and $7.9 million and $14.2
million in the same periods in 2012, respectively.
Cost of goods sold were $3.0 million during the three and six months ended
June 30, 2013. Cost of goods sold primarily consists of start-up activities
related to commercial manufacturing operations, and to a lesser extent,
manufacture of commercial product.
Research and development expenses were $4.8 million and $11.0 million in the
three months and six months ended June 30, 2013, compared to $5.0 million and
$10.0 million in the same periods in 2012, respectively.
General and administrative expenses were $4.8 million in the second quarter
and $8.9 million in the six months ended June 30, 2013, as compared to $2.9
million and $4.1 million in the same periods in 2012, respectively. The
increase was partially due to increased pre-commercialization efforts such as
market research, including pricing and market segmentation studies, during
2013, following the approval of the ADASUVE New Drug Application (NDA) in
December 2012 by the U.S. Food and Drug Administration (FDA). As part of the
license and supply agreement signed in May 2013, Teva assumed these efforts.
In 2012, general and administrative expenses were impacted by a reduction in
non-cash contra expense of $1.4 million as a result of the termination of one
of the Company's building leases and related subleases in March 2012.
In connection with the acquisition of Symphony Allegro in August 2009, Alexza
is obligated to pay the former Symphony Allegro stockholders certain
percentages of cash payments that may be generated from collaboration
transactions for ADASUVE, AZ-002 (Staccato alprazolam) or AZ-104 (Staccato
loxapine, low-dose). The Company records this obligation as a contingent
liability and updates the liability each quarter. In 2013, Alexza updated the
contingent liability fair value model to reflect the increase in probability
that Alexza would license the commercialization rights of ADASUVE in the US to
a third party rather than commercialize on its own, and to reflect the terms
of the Teva Agreement and reduced the discount factor used in the model,
resulting in Alexza recording non-operating losses of $31.5 million and $42.4
million during the three and six months ended June 30, 2013, respectively.
During the second quarter, Alexza made a $10 million payment to the former
Symphony Allegro stockholders as a result of the $40 million upfront payment
received from Teva.
Alexza believes that, based on its cash, cash equivalents and marketable
securities balance at June 30, 2013, estimated product revenues, royalties and
milestones associated with the sale of ADASUVE, proceeds available under the
Teva Note, and expected cash usage, it has sufficient capital resources to
meet its anticipated cash needs into the third quarter of 2014.
Conference Call Information - 5:00 p.m. Eastern Time on August 8, 2013
Investors and analysts may access the live conference call by dialing
888-713-4205 (domestic) or +1-617-213-4862 (international). The reference
number to enter the call is 17723266.
To access the conference call and webcast via the Internet, go to
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
The replay of the conference call may be accessed at www.alexza.com under the
"Investor Relations" link, or by dialing 888-286-8010 (domestic) or
+1-617-801-6888 (international). The reference number for the replay of the
call is 27674002. A replay of the call will be available for 30 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, including agitation, acute repetitive
seizures and insomnia. 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,
ADASUVE (Staccato loxapine), Alexza's first approved product, was approved by
the U.S. Food and Drug Administration in December 2012 and by the European
Medicines Agency in February 2013. Teva Pharmaceutical USA Inc. is Alexza's
commercial partner for ADASUVE in the U.S. Grupo Ferrer Internacional, S.A.
is Alexza's commercial partner for ADASUVE in Europe, Latin America, Russia
and the Commonwealth of Independent States countries.
For more information about Alexza, the Staccato system technology or the
Company's development programs, please visit www.alexza.com. For more
information about ADASUVE, please visit www.adasuve.com.
ADASUVE^® and Staccato^® are registered trademarks of Alexza Pharmaceuticals,
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 August 8, 2013 and financial guidance
relating to the Company's current cash, cash equivalents, investments and
restricted cash is based upon balances as of June 30, 2013 and certain
subsequent events, including drawing down on the Teva Note.
This news release and the planned conference call will 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 ability for Alexza and our
collaborators, 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, the Company's ability to raise additional funds and the potential
terms of such potential financings, and the valuation of the Company's
right-to-borrow under the Teva Note and resulting impact on the Company's
reported financial results. 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, 2012 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)
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Revenue $ 40,835 $ 728 $ 41,564 $ 2,612
Cost of goods sold 2,961 - 2,961 -
Research and 4,799 5,010 11,018 10,042
General and 4,806 2,904 8,919 4,149
Total operating expenses 12,566 7,914 22,898 14,191
Income (loss) from 28,269 (7,186) 18,666 (11,579)
(Loss)/gain on change in
fair value of contingent (31,500) 200 (42,400) 1,200
Interest and other 4 409 17 408
Interest expense (165) (380) (387) (813)
Net loss $ (3,392) $ (6,957) $ (24,104) $ (10,784)
Basic and diluted net loss $ (0.21) $ (0.58) $ (1.50) $ (1.03)
ALEXZA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
Cash and cash equivalents $ 25,853 $ 17,715
Marketable securities 9,148 -
Restricted cash - 5,051
Accounts receivable 106 -
Inventory 1,276 -
Prepaid expenses and other current assets 878 852
Total current assets 37,261 23,618
Property and equipment, net 15,744 16,531
Other assets 389 402
Total assets $ 53,394 $ 40,551
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities 16,332 18,718
Total noncurrent liabilities 50,656 19,260
Total stockholders' (deficit) equity (13,594) 2,573
Total liabilities and stockholders' equity $ 53,394 $ 40,551
(1) Derived from audited consolidated financial statements at that date.
SOURCE Alexza Pharmaceuticals, Inc.
Contact: BCC Partners, Karen L. Bergman, 650.575.1509,
firstname.lastname@example.org, and Michelle Corral, 415.794.8662,
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