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Alexza Surges After Panel Backs Inhaled Antipsychotic Drug

Alexza Pharmaceuticals Inc. (ALXA) climbed the most in 11 months after a U.S. panel backed the drugmaker’s plan to sell an inhaled antipsychotic drug that may put some patients at risk for respiratory failure.

Alexza rose 25 percent to 78 cents at 4 p.m. New York time, the most since Jan. 14, a day after outside advisers to the Food and Drug Administration recommended that the agency approve a single daily dose of Adasuve for schizophrenia and bipolar mania. The 9-8 vote, in Adelphi, Maryland, was contingent on the company using a risk mitigation plan proposed by the FDA.

Adasuve would be the first product for Mountain View, California-based Alexza. The therapy uses an inhalation device developed by the company to deliver a vaporized form of the 36- year-old antipsychotic drug loxapine to the lungs for rapid absorption into the bloodstream. The FDA, which doesn’t have to follow the panel’s recommendation, aims to decide on the product by Feb. 4.

“This product offers the potential to be a significant contributor to an important need,” panel member Andrew Winokur, director of psychopharmacology at the University of Connecticut School of Medicine in Farmington, said before the vote. Alexza presented “impressive efficacy data,” and the FDA’s risk- mitigation proposal was “reassuring,” he said.

50-50 Chance

The drug has a 50-50 chance of winning approval without an FDA requirement for more safety studies, Jason Kantor, an analyst at RBC Capital Markets in San Francisco, said yesterday in a note to clients. Kantor, who has a “sector perform” rating on the stock, estimates sales of the drug, if approved, may reach $150 million.

Alexza’s goal is to bring Adasuve to the market in 2012, Chief Executive Officer Thomas B. King said in a statement today. The company’s shares have declined 38 percent this year.

While loxapine was approved by the FDA in 1975, Adasuve would be the first inhaled treatment for agitation associated with schizophrenia and bipolar disorder. The product would compete with injectible forms of Eli Lilly & Co. (LLY)’s Zyprexa, Bristol-Myers Squibb Co. (BMY)’s Abilify and Pfizer Inc. (PFE)’s Geodon, part of a newer class of drugs known as atypical antipsychotics.

While Adasuve is effective as a fast-acting treatment for agitation among patients with schizophrenia and bipolar disorder, it can cause bronchial spasms that may be fatal in people with conditions such as asthma or chronic obstructive pulmonary disorder, FDA staff said Dec. 7 in a report.

No Precedent

“No regulatory precedent exists for a product that has this degree of bronchospasm as an adverse event,” Theresa Michele, a medical officer in the FDA’s pulmonary products division, told the panel.

The advisory panel’s narrow vote on whether Adasuve should be approved showed a “lack of conviction” that means “the decision is essentially left to the FDA,” Kantor said.

Adasuve failed to win approval in October 2010 because the agency was concerned about the risks of pulmonary toxicity. Alexza resubmitted its application in August with a proposed mitigation strategy that includes screening patients for respiratory risks and monitoring people who take Adasuve for an hour after treatment.

FDA Worries

The company’s proposal didn’t resolve the FDA’s concerns because it may be difficult for health-care providers to identify respiratory distress in psychiatric patients who are “uncooperative and severely disorganized,” Francis Becker, a medical officer in the FDA’s division of psychiatry products, told the panel.

“The scenario that all of us are worried about at FDA is that a patient, whose asthma is not detected for whatever reason, gets treated in an emergency setting, calms down, and is sort of put off to the side and not carefully observed,” Thomas Laughren, director of the FDA’s Division of Psychiatry Products, said at the meeting. “And they’re slowly getting into trouble because no one’s monitoring them.”

A company-funded study published in January in the British Journal of Psychiatry found that Adasuve started to work within 10 minutes of inhalation and was more effective than a placebo in cutting agitation levels within two hours.

Alexza was able to recruit participants “very quickly” for the clinical trials because “patients wanted to use this product,” James Cassella, Alexza’s senior vice president for research and development, said in a presentation to the panel. Adasuve is “non-invasive, non-coercive and helps maintain the patient-physician therapeutic alliance.”

There haven’t been any studies directly comparing Adasuve with other drugs approved to treat agitation in patients with schizophrenia and bipolar disorder, the FDA reviewers said.

While Lilly earned $5 billion from Zyprexa last year, sales may drop to $2.1 billion in 2012 amid generic competition. The FDA approved the first Zyprexa copies in October. Bristol-Myers earned almost $2.6 billion from Abilify last year, while Pfizer’s Geodon had $1 billion in revenue.

To contact the reporters on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net; Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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