reports
Flash note: Ferrer to buy Alexza for $0.90 per share plus CVR
Ferrer entered into a definitive agreement with Alexza, whereby Ferrer will acquire the company for $0.90 per share in cash, plus contingent value rights (CVRs) entitling shareholders to a pro rata share of up to four milestone-based payments, totalling a potential maximum of $35m (or approximately $1.60 per share) subject to certain deductions. This offer, unanimously supported by Alexza’s board, follows the letter of intent entered into by both parties in late February. The offer represents ...
Update: Ferrer signals intent to potentially buy company
Alexza disclosed on 26 February that it had entered into a non-binding letter of intent (LOI) from Ferrer on 15 February to acquire all outstanding Alexza common shares, and Alexza agreed to proceed with discussions to help further facilitate Ferrer’s due diligence. Although Ferrer has already completed a significant amount of due diligence, a key factor in the negotiations will be determining a price acceptable to both parties. Ferrer’s LOI signaled it could potentially finalize a formal of...
Update: Regaining Adasuve rights amid strategic review
Alexza is in transition as it is undergoing a strategic review to either unlock value or fund R&D programs such as AZ-007. The decision to reacquire US Adasuve rights from Teva may facilitate this process, as an outright sale or royalty agreement for its entire interest in Adasuve may be more straightforward once the US rights are regained. After lowering our revenue and COGS assumptions, our valuation on a standalone basis, net of debt, is $20.9m, or $1.04 per share fully diluted.
Flash note: Regaining US Adasuve rights, new opportunity?
Alexza and Teva have reached an agreement whereby Alexza will reacquire the US commercial rights for Adasuve, with a projected target completion date of 1 January 2016. US sales since the March 2014 launch have been tepid (Teva-derived product revenue to Alexza was under $3m) and recent developments at Teva (ie Actavis acquisition) may have deprioritized Adasuve’s position within the firm. While Teva’s Adasuve relinquishment may reflect a reduced long-term sales outlook, the process may actu...
Update: Still awaiting an inflection point in Adasuve growth
Recent Adasuve orders from Alexza’s commercial partners, Teva and Ferrer, were below company expectations and reflect continued challenges to increasing sales momentum. Alexza intends to suspend Adasuve manufacturing in Q315 and may outsource production afterwards. The company will also need to raise funds by Q415 to fund operations, including its clinical studies for AZ-002 and AZ-007.
Update: Extending pipeline with AZ-007
While primarily derived from Adasuve’s prospects in acute markets, Alexza’s investment case is evolving to also include the potential for other Staccato-based products in additional indications. The firm is now advancing AZ-007 (Staccato-delivered zaleplon) for middle-of-the-night (MOTN) awakening, and expects to begin a Phase II study in 2015. The inclusion of AZ-007’s prospects increases our rNPV valuation to $115.5m, up from $95.0m previously. We expect that Alexza will need to raise $2...
Outlook: Awaiting inflection in Adasuve volumes
Alexza's investment case continues to rest on the commercial prospects for Adasuve, a rapid-inhalation treatment for acute agitation in adult schizophrenia or bipolar disorder patients. Adasuve offers speed and dosing reliability advantages in treating acute agitation. Although we have lengthened the sales ramp-up timeline given the 9m14 revenue pace, our 20% peak market share assumption remains unchanged. Given a slower sales ramp up than expected, we expect Alexza will need to raise $20m in ca...
Update: Revising Adasuve forecasts on recent trends
The commercial reach of Adasuve (Staccato loxapine) continues to increase, as the product is now available in nine countries through Ferrer, as well as in the US (since March 2014) through US partner Teva Pharmaceuticals. Given Q214 results, we are raising our COGS assumptions to reflect higher fixed costs and pushing back our peak sales timeline, leading to a revised $4.71 per share valuation (vs $7.06 per share previously). Our valuation does not consider the technology value of the firm’s p...
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