MOUNTAIN VIEW, Calif., Aug. 6 /PRNewswire-FirstCall/ -- Alexza Pharmaceuticals, Inc. (Nasdaq: ALXA) reported today financial results for the quarter and six month period ended June 30, 2008 and provided an update on the Company's progress with its product development candidates. The net loss for the quarter and six month period ended June 30, 2008, as reported in accordance with accounting principles generally accepted in the United States (GAAP), was $14.1 million and $28.7 million, respectively, compared to a net loss of $10.3 million and $21.2 million in the comparable periods in 2007. Alexza had consolidated cash, cash equivalents and marketable securities (including investments held by Symphony Allegro) at June 30, 2008 of $95.3 million.

'Alexza continues to make significant progress with our lead program, AZ-004 (Staccato(R) loxapine), which is being developed for the treatment of acute agitation in schizophrenic or bipolar disorder patients,' said Thomas B. King, President and CEO of Alexza. 'During the first seven months of 2008, we initiated and completed the dosing of our first AZ-004 Phase 3 clinical trial, and have initiated dosing of our second AZ-004 Phase 3 clinical trial. In addition, we had clinical readouts from clinical trials with AZ-104, AZ-007 and AZ-002. We are also scaling up our manufacturing, quality systems, regulatory affairs and commercial operations as we prepare for the future commercialization of AZ-004.'

Financial Results - Periods Ended June 30, 2008 and 2007

GAAP operating expenses were $20.5 million and $39.7 million in the quarter and six month period ended June 30, 2008, compared to $14.2 million and $28.0 million for the comparable periods in 2007. The increases resulted primarily from increased spending on AZ-004 and AZ-104 as the Company continued development of these product candidates under the Symphony Allegro agreement, increased spending on AZ-003 with continued development of this product candidate under the development agreement with Endo Pharmaceuticals, increased spending for device development and manufacturing process scale-up efforts, increased personnel-related costs to support these efforts, and increased share-based compensation costs.

On January 1, 2006, Alexza adopted FAS 123R and reports employee share-based compensation expense based on the fair value of the award. Share-based compensation was $1,447,000 and $2,638,000 in the quarter and six month period ended June 30, 2008 compared to $557,000 and $1,276,000 in the comparable periods in 2007. Alexza's Consolidated Statements of Operations include the operations of Symphony Allegro, Inc., its variable interest entity. As the Company has no direct ownership in Allegro, it reduces its net loss by the losses incurred by Allegro. 'Loss attributed to noncontrolling interest in Symphony Allegro, Inc.' reduced net loss for the quarter and six month period ended June 30, 2008 by $5.9 million and $9.6 million, and reduced net loss by $2.6 million and $4.7 million in the comparable periods in 2007.

Product Candidates Development Update

-- AZ-004 (Staccato loxapine). Alexza is developing AZ-004 for the treatment of acute agitation in patients with schizophrenia or bipolar disorder. In June 2008, the Company completed enrollment in its first Phase 3 clinical trial of 344 schizophrenic patients with acute agitation at 24 U.S. clinical centers. The trial was an in-clinic, multi-center, randomized, double-blind, placebo-controlled study and tested AZ-004 at two dose levels, 5 and 10 mg. Patients received up to three doses of study drug in a 24-hour period, depending on their clinical status. The primary endpoint for the study is the change from baseline in the PANSS (Positive and Negative Symptom Scale) Excited Component (PEC) score, measured at two hours after the first dose. Various assessments of a patient's agitation state were conducted at serial time points using standard agitation scales over the first 4-hour post- dose time period, with follow-up assessments at the end of the 24-hour study period. Side effects were recorded throughout the 24-hour period. The Company expects to release initial results of this trial before the end of September 2008.

A second Phase 3 clinical trial was initiated in July 2008 and is designed to enroll approximately 300 patients diagnosed with bipolar I disorder and acute agitation at 18 U.S. clinical centers. The trial is an in-clinic, multicenter, randomized, double-blind, placebo-controlled study and will test AZ-004 at two dose levels, 5 and 10 mg. Patients may receive up to three doses of study drug in a 24-hour period, depending on their clinical status. Patients eligible for the study include those who are admitted through an emergency department and those who are already in-patients in a hospital setting, as long as they have acute agitation at the time of patient randomization. This study is the first AZ-004 study enrolling bipolar disorder patients. The Company projects that this second Phase 3 clinical trial will take approximately 12 months to complete patient enrollment. The primary endpoint for the study is the change from baseline in the PEC score, measured at two hours after the first dose. Various assessments of a patient's agitation state will be conducted at serial time points using standard agitation scales over the first 4-hour post-dose time period, with follow-up assessments at the end of the 24-hour study period. Side effects will be recorded throughout the 24-hour period. AZ-004 has been licensed to Symphony Allegro, Inc., or Symphony Allegro, and Alexza has the right to repurchase all rights to this product candidate.

-- AZ-001 (Staccato prochlorperazine). Alexza is developing AZ-001 to treat patients suffering from acute migraine headaches. Alexza requested an end of Phase 2 meeting with the FDA during the second quarter of 2008 and has been granted this meeting for the third quarter of 2008.

-- AZ-104 (Staccato loxapine). Alexza is developing AZ-104 to treat patients suffering from acute migraine headaches. AZ-104 is a lower dose version of AZ-004. In March 2008, the Company announced initial results of an in-clinic, multi-center randomized, double-blind, single administration, placebo controlled Phase 2a proof-of-concept clinical trial in 168 migraine patients with or without aura. Three doses of AZ-104 (1.25, 2.5 and 5 mg) were evaluated against placebo in the clinical trial.