Implosion Visits In Alexza (ALXA)
Alexza Pharmaceuticals Inc. (NASDAQ: ALXA) is witnessing a share implosion today with the loss of more than half its value. The company was awaiting key data from the FDA and it turned out to be very unfavorable. The FDA declined approving its AZ-004 drug candidate that was targeted to treat agitation in patients with schizophrenia and/or bipolar disorder.
The FDA cited safety concerns as study data showed adverse respiratory reactions to the drug in some cases. Alexza said in response that the company plans to meet with the FDA to address the agency’s safety concerns and it took the stance that it continues to believe in the safety and efficacy of the drug where there exists a large often-unmet need of treatment options.
A complete response letter is issued by the FDA indicating that the new drug application review cycle is complete and the application is not ready for approval in its present form. AZ-004 is being developed for the rapid treatment of agitation in schizophrenia or bipolar disorder patients.
The FDA’s primary clinical safety concern was related to data from the three Phase 1 pulmonary safety studies and was primarily based on “observed, dose-related post-dose decreases in forced expiratory volume in one second, or FEV1, a standard measure of lung function, in healthy subjects and in subjects with COPD and asthma.” The agency also noted that decreases in FEV1 were recorded in subjects who were administered device-only, placebo versions of AZ-004.
Alexza had already signed a deal with Valeant earlier in the year that would have been to commercialize the drug in the U.S. and Canada. The company’s June 30 balance sheet listed more than $41.6 million in combined cash and short-term investments, although adding up the total assets and total liabilities showed a net tangible asset value in the red of -$28.65 million.
Shares had traded above $3.60 as recently as late-September, but the stock had slid to $3.03 on Friday’s close. Shares hit a new 52-week low and the stock is down by more than 53% at $1.40 on nearly 10 million shares right at NOON EST. Average volume is only about 820,000 shares.