Drug delivery company Alexza Pharmaceuticals Inc. is adding $61.5 million through a public offering to support ongoing development of drugs incorporating its Staccato inhalation technology.

The company priced 6 million shares at $10.25 each, and also granted underwriters an option to buy up to an additional 900,000 shares to cover any overallotments. Net proceeds are expected to total about $57.8 million, or $66.5 million with the overallotments. Those funds, plus existing capital, are expected to sustain the company through the middle of 2009.

In its prospectus, Alexza said its plans to use the money primarily for research and development of its product candidates, including preclinical and clinical testing, and for working capital and general corporate purposes. A chunk of the proceeds will be directed toward further development of AZ-001 (Staccato prochlorperazine), an acute migraine product that recently yielded positive results in a 440-patient Phase IIb testing. The company reported in March that AZ-001 met its primary endpoint of two-hour pain relief over placebo, and that news sent Alexza's stock soaring 52 percent that day to close at $15.21. (See BioWorld Today, March 27, 2007.)

Following news of the public offering, Alexza's shares (NASDAQ:ALXA) closed Friday at $10.99, up 43 cents.

The company's focus is centered on its Staccato technology, a system designed to vaporize an unformulated drug to form a condensation aerosol that can be delivered rapidly through the lungs and into the bloodstream, with a therapeutic onset similar to intravenous administration but with more convenience to patients.

In addition to AZ-001, Alexza has in its pipeline AZ-004, a Staccato formulation of loxapine for acute agitation in schizophrenic patients, which successfully completed a 120-patient Phase IIa trial, and AZ-002 (Staccato alprazolam), which is in a Phase IIa study as acute treatment of panic attacks associated with panic disorder. Development of both of those products is being funded through an agreement with Symphony Holdings LLC, in which Symphony and its investors provided $50 million to form Symphony Allegro Inc. That new company now holds exclusive rights to AZ-004 and AZ-002, though Alexza is handling development activities. Alexza retains an exclusive purchase option to regain rights to those products by acquiring all the equity of Symphony Allegra.

Earlier in development, Alexza has AZ-003, a Staccato version of fentanyl for treating acute pain. That product is in Phase I testing in opioid-naïve healthy subjects.

Alexza reported a net loss of $41.8 million, or $2.13 per share, for the year ending Dec. 31, 2006. At that time, the company had cash and cash equivalents totaling bout $42.6 million. The company, which was founded in 2002, made its debut on the public markets last March, when it sold 5.5 million shares at $8 each to raise $44 million. (See BioWorld Today, March 9, 2006.)

Merrill Lynch & Co. and Morgan Stanley & Co. Inc. are acting as the joint book-running managers for the public offering, with Pacific Growth Equities LLC and RBC Capital Markets Corp. serving as co-managers.

After the offering, Alexza will have about 29.9 million shares outstanding.

In other financings news:

• Genitope Corp., of Fremont, Calif., priced its public offering of 5.5 million shares at $3.85 per share for gross proceeds of about $21.2 million. The company also granted the underwriter, Punk, Ziegel & Co., an option to buy up to an additional 825,000 shares to cover any overallotments. In its prospectus, the company said it expects net proceeds of $19.8 million - or $22.8 million if the overallotment option is exercised in full - which will be used for general corporate purposes, including clinical trials and other expenses related to the commercialization of MyVax in follicular B-cell non-Hodgkin's lymphoma, and for research and development of monoclonal antibody candidates. MyVax, the company's lead program, is a personalized immunotherapy that is based on the genetic makeup of a patient's tumor. Shares of Genitope (NASDAQ:GTOP) lost 22 cents Friday to close at $3.63.

• Vyteris Holdings Inc., of Fair Lawn, N.J., raised more than $23.1 million in a series of financing transactions, which included $20.1 million in cash and $3 million in non-cash debt conversion, from October 2006 and ending April 15, 2007. Proceeds will be used to repay about $8.4 million in senior secured debt, as well as support the company's planned marketing and sales initiatives for its FDA-approved LidoSite, a transdermal analgesic smart patch. Vyteris' stock (OTC BB:VYHN) lost3 cents Friday, closing at $1.25.