Alexza Pharmaceuticals (NASDAQ:ALXA) is a rapidly emerging pharmaceutical development company focused on the research, development and commercialization of novel proprietary products for the acute treatment of central nervous system, or CNS conditions. All of their product candidates are based on their proprietary technology, the Staccato system. The Staccato system vaporizes excipient-free drugs to form a condensation aerosol that, when inhaled, allows for rapid systemic drug delivery. Because of the ideal particle size of the aerosol, the pure drug is quickly absorbed through the deep lung into the bloodstream, providing speed of therapeutic onset that is comparable to intravenous (IV) administration but with greater ease, patient comfort and convenience.

Alexza currently has five product candidates in various stages of clinical development, and their lead candidate, AZ-004 is actually under FDA review with an action date schedule for October 11th 2010. We believe that their Staccato platform has the right combination of key attributes for the treatment of acute agitation that makes the product a $500M Market opportunity.

Clinical trial data indicate that Alexza’s unique Staccato technology generates consistent distribution of aerosolized drug particles of 1 to 5 microns (the ideal size for absorption in deep lung tissue), providing peak plasma concentrations as quickly as an intravenous injection and rapid onset of therapeutic relief.

Platform Details

Basic Principles

The Staccato system comprises the rapid vaporization of a drug to form a small particle aerosol optimal for systemic delivery through inhalation. These aerosols are systemically absorbed very rapidly, with peak plasma blood levels obtained in the first few minutes after administration. Thus, the Staccato system enables rapid onset of action for many drugs.

Thermal Aerosols

The key to our proprietary technology is vaporization of drug without thermal degradation, which is achieved by rapidly heating a thin film of the drug. In less than half a second, the drug is heated to a temperature sufficient to convert the solid drug film into a vapor. Because the duration of drug heating is so brief, thermal decomposition is minimal. After vaporization, the drug cools rapidly in air, condensing into pure drug aerosol particles of near ambient temperature. The Staccato system consistently creates aerosol particles averaging one to three microns in size, which is the proper size for deep lung inhalation. The Staccato system also produces a consistent high emitted dose, regardless of the patient’s breathing pattern.

Device Elements

The Staccato device consists of three core components: a heating substrate, a thin film of unformulated drug coated on the substrate, and an airway through which the patient inhales. The left panel below shows these core components before patient inhalation. The right panel shows the device components during patient inspiration: the substrate is heated to peak temperature in < 0.5 seconds after start of patient’s inhalation, which vaporizes the drug in less than 1 second. The drug cools and condenses into a pure drug aerosol. While the patient inhales through the device, the drug aerosol is drawn through the patient’s mouth and into the lungs where it diffuses into the circulation for a rapid systemic effect.

Ease of Use

The Staccato system is breath-actuated and a patient simply inhales to administer the drug dose. A special valve in the inhaler airway controls airflow over the vaporizing drug to achieve appropriate aerosol particle size. The aerosol produced with the Staccato system is relatively insensitive to patient inhalation rates. To use these inhalers, a patient simply removes an inhaler from its packaging, places the device to his or her lips, and takes a deep breath. Unlike many other inhalation technologies, the patient does not need to learn a special breathing pattern. In addition, the Staccato device is small and easily portable.

Pharmacology and Rapid Onset

The aerosol produced with the Staccato system is designed to be absorbed rapidly through the deep lung, with a speed of therapeutic onset comparable to IV administration, generally achieving peak plasma levels of drug in two to five minutes, which is much faster than oral tablet delivery. In vivo pharmacokinetic studies in an animal model conducted with a commercially available migraine drug show that the Staccato system results in more rapid absorption than subcutaneous injection or oral administration. Pharmacodynamic studies with the same migraine drug demonstrate an onset of action of less than one minute as shown in the graph below.

Consistent Dose and Particle Size

The Staccato system uses rapid heating of the drug film to create consistent and appropriate sizes for deep lung inhalation, rather than mechanics or preformed drug particles, to create drug aerosols. The Staccato system produces a consistent high emitted dose regardless of the patient’s breathing pattern.
Broad Applicability

Approximately 200 drug compounds have exhibited initial vaporization feasibility with our Staccato system. The Staccato system can deliver both water soluble and water insoluble compounds while eliminating the need for excipients and additives such as detergents, stabilizers and solvents, enabling the delivery of unformulated drug.

Design Flexibility

The Staccato device can incorporate lockout and multiple dose features, potentially enhancing safety, convenience of patient titration and a variety of administration regimens.
Alexza is currently developing two versions of our Staccato device, a Disposable Single Dose and a Multiple Dose.

Result of Phase III for Staccato loxapine (AZ-004)

Results of clinical studies in patients with schizophrenia or bipolar disorder demonstrated that Staccato loxapine (AZ-004) reduced agitation in patients, regardless of the level of agitation at baseline. Improvement in agitation levels were observed as early as 10 minutes after dosing on the standard components of agitation as measured by the Positive and Negative Syndrome Scale – Excited Component (PEC). Staccato loxapine also had no significant hemodynamic effect in subjects taking chronic antipsychotic treatment and did not significantly prolong the QT interval at therapeutic doses. The additional efficacy results from two randomized, double blind, and placebo-controlled Phase 3 clinical trials assessing the efficacy and safety of Staccato loxapine in treating agitation in patients with schizophrenia or bipolar disorder were presented in the poster, Treating Agitation with Inhaled Loxapine (AZ-004): Efficacy Analyses in Patients with Schizophrenia or Bipolar Disorder (Poster Session 6). In the Phase 3 clinical trials, loxapine was administered via inhalation using the Staccato system, which delivers thermally-generated drug aerosol to the deep lungs for rapid systemic absorption with IV-like pharmacokinetics. Adults 18 to 65 years of age who met DSM-IV criteria for schizophrenia or bipolar I disorder, and presented with a relevant degree of agitation at baseline, were included in the trials.

Portfolio

There is a significant unmet medical and patient need for products for the treatment of acute and intermittent conditions that can be delivered in precise amounts, provide rapid therapeutic onset, and are noninvasive and easy to use.

We have already demonstrated that more than 200 FDA-approved compounds are feasible for delivery by the Staccato system. Currently we have six development programs focused on five acute and intermittent conditions.

AZ-004: Staccato loxapine

* INTENDED INDICATION: Acute Treatment of Agitation associated with Schizophrenia or Bipolar Disorder
* PATIENT POPULATION: 2.4 million schizophrenia patients and 5.7 million bipolar disorder patients in the United States; agitation is a common and severe symptom.
* STATUS: Successfully completed two Phase 3 trials: a 344-patient trial for schizophrenia and a 314-patient trial for bipolar disorder. Both trials met primary and secondary endpoints. The company submitted an NDA in December 2009.

AZ-001: Staccato prochlorperazine

* INTENDED INDICATION: Migraine Headache
* PATIENT POPULATION: 13 million people in the United States receive medication for migraine, 29.5 million people in the United States have migraine headaches*.
* STATUS: 400-patient Phase 2b trial completed and positive results announced; completed human QT trial and FDA end of Phase 2 meeting. Product available for partnering.

* Prochlorperazine is a non-triptan with potential to serve the 50% of migraine sufferers who either get little relief from or are ineligible to receive triptans because of the potential cardiovascular side-effects of triptans.

AZ-104: Staccato loxapine

* Loxapine is a non-triptan with potential to serve the 50% of migraine sufferers who either get little relief from or are ineligible to receive triptans because of the potential cardiovascular side-effects of triptans.

AZ-003 Staccato fentanyl

* INTENDED INDICATION: Breakthrough Pain
* PATIENT POPULATION: Based on our analysis of industry data and clinical literature, we believe over 25 million postoperative patients experience inadequate pain relief, despite receiving some form of pain management and, according to a three month study on cancer pain by Portenoy and Hagen and a cross-sectional study on cancer pain by Caraceni, approximately 65% of patients diagnosed with cancer pain experience breakthrough cancer pain.
* STATUS: A 50-subject Phase I safety, pharmacokinetics and pharmacodynamics (using multi-dose Staccato system) completed. with positive results reported.

AZ-002 Staccato alprazolam

* INTENDED INDICATION: Acute Panic Attacks
* PATIENT POPULATION: 2.4 million patients in the United States; ~60% seek treatment.
* STATUS: A 50-subject Phase 1 trial and a 48-patient Phase 2a proof-of-concept clinical trial for the treatment of panic attacks have been completed. While the P2a study was inconclusive, but given the safety profile, the successful and reproducible delivery of alprazolam, and the IV-like pharmacological effect demonstrated to date, other possible indications are under evaluation.

AZ-007 Staccato zaleplon

* INTENDED INDICATION: Insomnia in patients who have difficulty falling asleep, including patients who awake in the middle of the night and have difficulty falling back to sleep
* PATIENT POPULATION: An estimated 10-30% of people in the United States experience either chronic or occasional insomnia.
* STATUS: 40-subject Phase 1 safety and pharmacokinetics trial completed with positive results reported.

Financial

On Wednesday, 26 May 2010,

Alexza Pharmaceuticals announced that it has obtained a committed equity financing facility under which it may sell up to $25 million of its registered common stock to Azimuth Opportunity, Ltd. over a 24 month period. Alexza is not obligated to utilize any of the $25 million facility and remains free to enter into and consummate other equity and debt financing transactions. This facility replaces a similar facility that was established in March 2008 and expired after its 24 month term.

On Wednesday, 5 May 2010,

Alexza Pharmaceuticals announced that it has executed a $15 million working capital loan agreement with Hercules Technology Growth Capital. The funds available under the loan will be used for capital equipment and working capital purposes. In connection with the loan, Alexza issued Hercules warrants to purchase 376,394 shares of common stock at an exercise price of $2.69 per share, which was the 50-day average daily weighted average trading price at the time the term sheet for the loan was issued by Hercules.

Conclusion

With a PDUFA date setup for October 11th, a solid and unique platform with a huge potential, we believe that the market is under-valuing this amazing Biotech company, we believe $4 per share, a market cap of around $200M, would more fairly represents the company.

A must to read, the latest company pdf presentation:

Company_2009pdf

Full Disclosure:

-No positions on ALXA
-The Clever bull has NOT been compensated in any way by Alexza Pharmaceuticals to promote or write this article.

The Clever Bull team.

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