Alexza Reports 2014 First 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., May 5, 2014
MOUNTAIN VIEW, Calif., May 5, 2014 /PRNewswire/ -- Alexza Pharmaceuticals,
Inc. (Nasdaq: ALXA) today reported financial results for the quarter ended
March 31, 2014. The net loss for the first quarter was $10.7 million compared
to $20.7 million during the same quarter in 2013. At March 31, 2014, Alexza
had consolidated cash, cash equivalents, marketable securities and restricted
cash of $60.0 million.
ALEXZA PHARMACEUTICALS, INC.
"We started 2014 with an impressive set of accomplishments," said Thomas B.
King, President and CEO of Alexza. "The global launch of ADASUVE continues
with additional product introductions in the United States, Spain, Romania and
the Nordic countries. We also strengthened our balance sheet, as we completed
a private placement to institutional investors of $45.0 million of
non-recourse notes of our subsidiary."
King continued, "We have also strengthened our management, with the addition
of Robert Lippe and Winston Brown to the Alexza management team. We look
forward to their contributions to our progress through 2014 and beyond."
Alexza Business Updates
oGrupo Ferrer Internacional, S.A. initiated sales of ADASUVE in Spain
(January), Romania (March), and Sweden, Norway, Denmark and Finland
(April). In conjunction with the commercial introduction of ADASUVE in
Spain by Ferrer, Alexza received a $1 million milestone payment. Ferrer
is commercializing ADASUVE in Romania through a distribution agreement
with Galenica SA and in the Nordic countries through a distribution
agreement with Medivir AB. Ferrer is Alexza's commercial partner for
ADASUVE in Europe, Latin America and the Commonwealth of Independent
oIn February, Robert A. Lippe joined Alexza in the newly created position
of Executive Vice President, Operations and Chief Operations Officer.
oIn March, Teva Pharmaceutical Industries Ltd. announced the commercial
launch of ADASUVE (loxapine) inhalation powder 10 mg in the United
States. Teva is Alexza's commercial partner for ADASUVE in the U.S.
oDuring the first quarter of 2014, Alexza shipped 28,221 total units of
ADASUVE to Teva (18,788 units) and Ferrer (9,433 units).
oIn March, Alexza completed a royalty securitization financing, which
consisted of a private placement to qualified institutional investors of
$45.0 million of 12.25% non-recourse notes due 2027, issued by Alexza's
wholly-owned subsidiary, Atlas U.S. Royalty, LLC, and five-year warrants
to purchase 345,661 shares of Alexza common stock at a price of $0.01 per
share. In connection with the royalty securitization financing, Alexza
transferred to Atlas U.S. Royalty, LLC its rights to U.S. royalty and
milestone payments under the collaboration agreement between Alexza and
Teva. All royalties and milestones paid by Teva under the collaboration
agreement, after paying interest, administrative fees, and any applicable
taxes, will be applied to the principal of the notes until the notes have
been paid in full. After fees and expenses, the net proceeds to Alexza
were approximately $41 million, before the establishment of a $6.9 million
interest reserve account to cover any shortfall between proceeds from Teva
and scheduled interest payments.
oIn April, Winston R. Brown, Jr. joined Alexza as Vice President, Quality.
oIn April, Alexza completed the required work to extend the expiration
dating of ADASUVE from 24 months to 36 months. Data were submitted and
accepted by the European Medicines Agency and all ADASUVE manufactured for
the EU will now have a 36-month expiry. In the U.S., updated stability
data were submitted as part of the ADASUVE Annual Report in February, and
all ADASUVE manufactured for the U.S. beginning in May 2014 will have a
Financial Results - Periods Ended March 31, 2014 and 2013
Alexza recorded revenue of $2.2 million and $0.7 million during the quarters
ended March 31, 2014 and 2013, respectively. Revenue in 2014 consisted of
$1.0 million of milestone revenue from Ferrer, a result of the commercial
introduction in Spain, $0.7 million of revenue related to the amortization of
the upfront payments from Ferrer and $0.4 million of product revenues for
units of ADASUVE sold to Teva and Ferrer. Revenue in 2013 solely consisted of
revenue related to the amortization of the upfront payments from Ferrer.
GAAP operating expenses were $11.0 million and $10.3 million in the quarters
ended March 31, 2014 and 2013, respectively.
Cost of goods sold of $3.8 million incurred during the quarter ended March 31,
2014, consists primarily of start-up activities related to commercial
manufacturing operations, and, to a lesser extent, manufacture of commercial
product. Alexza is in the early stages of commercialization and, as
anticipated, has incurred higher cost per unit costs associated with low
production volumes. Alexza expects to continue to incur higher than normal
indirect costs until it gets closer to planned manufacturing capacity. All
costs associated with the manufacturing process incurred prior to the first
commercial product produced in the second quarter of 2013 were expensed as a
component of research and development expense.
Research and development expenses were $3.1 million and $6.2 million in the
three months ended March 31, 2014 and 2013, respectively. The decreases were
primarily a result of expenses related to quality, supply chain and
manufacturing expenses being classified as cost of goods sold in 2014, which
were classified as research and development expenses in the first quarter of
General and administrative expenses remained consistent at $4.0 million and
$4.1 million in the quarters ended March 31, 2014 and 2013, respectively.
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. For the first quarter of
2014, the loss on the change in the fair value of the contingent liability was
primarily due to the effect of the passage of three months on the discounted
cash flow model.
In the first quarter of 2014, the Company drew down an additional $5 million
under the Teva Note associated with the Company's collaboration agreement with
Teva. Alexza also entered into a royalty securitization financing generating
net cash proceeds of $41 million, before the establishment of a $6.9 million
interest reserve account to cover any shortfall between proceeds from Teva and
scheduled interest payments. Alexza believes that based on its cash, cash
equivalents, marketable securities and restricted cash balances at March 31,
2014, estimated product revenues and milestones associated with the sale of
ADASUVE, remaining proceeds available under the Teva Note, and expected cash
usage, it has sufficient capital resources to meet its anticipated cash needs
for at least the next twelve months.
Conference Call Information - 5:00 p.m. Eastern Time on May 5, 2014
To access the webcast via the Internet, go to www.alexza.com, under the
"Investor Relations" 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.
To access the live conference call, dial 888-680-0890 or +1-617-213-4857
(international). The reference number to enter the call is 42668133.
Interested parties may also pre-register for the call at
A replay of the conference call may be accessed at www.alexza.com under the
"Investor Relations" link, or by dialing 888-286-8010 or +1-617-801-6888
(international). The reference number for the replay of the call is
24434341. A replay of the call will be available for 14 days following the
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 is Alexza's first commercial product. It has been approved for sale
by the U.S. Food and Drug Administration and the European Commission. Teva
Pharmaceuticals 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 and the Commonwealth of Independent States.
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 May 5, 2014 and financial guidance
relating to the Company's current cash, cash equivalents, and marketable
securities is based upon balances as of March 31, 2014.
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, 2013
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
Revenue $ 2,166 $ 729
Cost of goods sold 3,791 -
Research and development 3,130 6,219
General and administrative 4,048 4,113
Total operating expenses 10,969 10,332
Loss from operations (8,803) (9,603)
(Loss) gain on change in fair value of contingent (1,150) (10,900)
Interest and other income (expense), net 6 13
Interest expense (788) (222)
Net loss $(10,735) $(20,712)
Basic and diluted net loss per share $ (0.62) $ (1.31)
ALEXZA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
Cash and cash equivalents $ 53,068 $ 17,306
Marketable securities - 8,578
Accounts receivable 278 129
Inventory 4,437 3,447
Prepaid expenses and other current assets 2,364 1,453
Total current assets 60,147 30,913
Property and equipment, net 14,334 14,991
Restricted cash 6,890
Other assets 3,999 1,168
Total assets $ 85,370 $ 47,072
LIABILITIES AND STOCKHOLDERS' DEFICIT
Total current liabilities 13,179 14,898
Total noncurrent liabilities 103,468 56,149
Total stockholders' deficit (31,277) (23,975)
Total liabilities and stockholders' deficit $ 85,370 $ 47,072
^1 Derived from audited consolidated financial statements at that date.
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SOURCE Alexza Pharmaceuticals, Inc.
Contact: Thomas B. King, President and CEO, 650.944.7634, firstname.lastname@example.org, or
Mark K. Oki, SVP, Finance and CFO, 650.944.7666, email@example.com
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