Alexza Pharmaceuticals Inc. (NASDAQ:ALXA) stock closed at 49 cents Friday, a loss of 12 cents, or about 20 percent, on news that the FDA had issued a complete response letter for its new drug application for Adasuve (loxapine) inhalation powder for agitation in schizophrenia and bipolar disorder. The company said that the agency cited manufacturing deficiencies, and that "There were no new clinical or safety issues identified."

Alexza CEO Thomas B. King said in a conference call Friday morning that the deficiencies were specific to the device used to deliver the drug, the Staccato inhaler, and "readily addressable."

In December 2011, the Psychopharmacologic Drugs Advisory Committee (PDAC) split nearly down the middle, voting 9-8, with two abstentions, in favor of approval for single dose Adasuve, administered via inhalation, with a risk evaluation and mitigation strategy (REMS) proposed by the FDA.

The high number of no votes reflected panel members' concerns that more data were needed, especially in an emergency room setting, before the drug and its device could be approved.

Alexza, of Mountain View, Calif., had proposed a postmarket study to evaluate the safety and efficacy of Adasuve as it was taken up in those ER settings, comparing frequency of adverse events in patients receiving Adasuve with those associated with intramuscular antipsychotics like Zyprexa (olanzapine, Eli Lilly and Co.), Geodon (ziprasidone Hcl, Pfizer) and Abilify (aripiprazole, Bristol-Myers Squibb Co.).

Safety concerns center on the risk of bronchospasms in patients with asthma or chronic obstructive pulmonary disease (COPD).

In its prior complete response letter, the FDA expressed doubt that the acutely agitated and psychotic patients in an emergency room setting, could give a reliable history of respiratory disease, cooperate for an effective pulmonary exam, be able to understand and follow instructions for use of the device, and accurately communicate symptoms they may experience after treatment.

Based on five studies, including two Phase III trials, in which Adasuve hits its marks in terms of efficacy, the company had reported that there were no serious or severe respiratory adverse events and said all respiratory symptoms that developed in subjects with COPD and asthma were either self-limiting or easily managed with an inhaled bronchodilator. (See BioWorld Today, Oct. 12, 2010.)

The FDA, however, disagreed, arguing that the data showed dose-related decreases in forced expiratory volume in one second (FEV1) in healthy subjects and in those with COPD and asthma. Those effects were also seen in subjects that received placebo versions of the drug, potentially implicating the Staccato delivery device.

That delivery device is being used in the development of AZ-007 (Staccato zaleplon), for sleep onset insomnia, and AZ-003 (Staccato fentanyl), for breakthrough pain.

Alexza's comments on new CRL did not directly address the safety objections from last year.

"No new clinical or safety issues were identified," said King. In reference to the REMS plan, he said, "We firmly believe that there is substantial agreement for the scope, content, and requirements for the program, and that the benefits outweigh the risk of bronchospasm."

Alexza's next step is to meet with the FDA to clarify its requirements for resubmission. "We plan to quickly resubmit our NDA to the FDA," said King.

Depending on the FDA's feedback, Adasuve may be eligible for a Type 1 resubmission, which would give the review a two month timeline, with possible completion by the end of 2012.

"We believe we'll be in a position to resubmit in the coming months, and push Adasuve on toward approval," King said.

Alexza has encountered headwinds, as well, with its European marketing authorization application. In February of 2012, European regulators raised objections to the extrapolation of the Phase III study population to the intended patient population in its day 80 assessment report regarding its application for Adasuve.

Alexza will receive a day 120 notification and report for that application, furnishing a list of review questions, the overall conclusions of scientific data, and a list of outstanding issues. Alexza is working with partner Grupo Ferrer International Inc., of Barcelona, Spain, to develop Adasuve in the European Union and other territories.

Adasuve is intended to treat agitation in adult patients with schizophrenia and bipolar I disorder. There are approximately 2.4 million adults with schizophrenia and 5.7 million adults with bipolar disorder in the U.S., and about 90 percent of them suffer from agitation.

Agitation is defined as an increasing sense of unease, tension, and restlessness that escalates over time, intensifying to excitation that can become uncontrolled or even violent. Approximately 50 percent of those episodes are treated in the hospital emergency room.

Standard treatment is intramuscular injection of an antipsychotic drug. Alexza believes that Adasuve can be administered in less invasive manner earlier in the process of agitation, and with more dignity and control by the patient, and a better outcome.