Alexza Pharmaceuticals announces development and commercialization collaboration with Biovail Laboratories International

Alexza Pharmaceuticals, Inc. (Nasdaq: ALXA) announced today that it has established a collaboration with Biovail Laboratories International SRL, a subsidiary of Biovail Corporation (NYSE: BVF), to develop and commercialize AZ-004 (Staccato® loxapine) in the U.S. and Canada.  AZ-004 is Alexza's lead program, based on the company's proprietary technology, the Staccato system.  Alexza submitted its New Drug Application (NDA) for Staccato loxapine in December 2009.  Alexza is seeking regulatory approval to market AZ-004, an inhalation product candidate developed for the rapid treatment of agitation in patients with schizophrenia or bipolar disorder.  

"We are very excited to be partnering our lead program with Biovail.  Their key strategic focus and their CNS commercial plans match our view of an ideal partner for AZ-004," said Thomas B. King, Alexza President and CEO.  "We believe that AZ-004, if approved, has the potential to change the treatment practices for acute agitation, as the only product able to meet both the patients' desire for quickly and comfortably gaining control of their agitation, and the clinicians' goal of rapidly and reliably calming an agitated patient.

"This agreement provides Biovail with a promising late-stage specialty CNS product," said Bill Wells, Biovail's Chief Executive Officer.  "In clinical studies conducted by Alexza, Staccato loxapine rapidly delivered drug into the blood stream through the deep lung in a unique, non-invasive manner. We are delighted to be partnering with Alexza to bring this important treatment to market."

The collaboration provides for the development and commercialization of AZ-004 for multiple indications, including the proposed initial indication of treating agitation in schizophrenia and bipolar patients, as well as potential future clinical development in additional psychiatric and neurological indications and the symptoms associated with these indications.  Biovail will lead the commercialization activities for AZ-004.  Alexza will continue to manage the ongoing AZ-004 NDA review and approval process in connection with the initial indication, and has entered into a manufacturing and supply agreement to supply Biovail clinical and commercial product.

Under the terms of the collaboration, Alexza is entitled to receive an upfront cash payment of $40 million, up to $90 million in potential milestone payments contingent on the successful approval of the first AZ-004 NDA, successful commercial manufacturing scale-up, and the successful completion of additional clinical trials, regulatory submission (if required) and approval of an sNDA (if required) in the outpatient setting for patients with schizophrenia or bipolar disorder.  Biovail will make tiered, royalty payments of 10% to 25% on net commercial sales of AZ-004.  In addition to milestone payments and product royalties, Alexza will supply AZ-004 to BLS for all of its commercial sales, and will receive a per-unit transfer price, based upon annual product volume.