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Alexza Pharmaceuticals Inc. is banking $10 million up front in a licensing deal that gives Endo Pharmaceuticals Holdings Inc. rights to its inhaled fentanyl product, AZ-003, which is in Phase I development for breakthrough pain.

The agreement allows Endo to exclusively develop and commercialize AZ-003 in North America for breakthrough pain in both cancer and non-cancer patients. Upon the success of predetermined regulatory milestones, Alexza could receive up to an additional $40 million. Palo Alto, Calif.-based Alexza also would be entitled to undisclosed royalties on any product sales.

In the meantime, Endo, of Chadds Ford, Pa., will take over all development and funding responsibilities for the product, a formulation of the opioid analgesic fentanyl that is combined with Alexza's Staccato drug delivery system. That drug-device combination is designed to deliver excipient-free fentanyl aerosol into the deep lungs and consists of a disposable dose cartridge containing 25 doses each of 25 mcg fentanyl that can be inserted into a reusable controller. Moreover, Alexza has said, it can be designed with dosing features that might reduce the potential for abuse.

The firm reported positive Phase I data in October showing that AZ-003's pharmacokinetics were equivalent to those of intravenous fentanyl, with similar peak plasma concentration, time to maximum plasma concentration and area under the curve concentration. Mean peak arterial plasma concentrations were observed within 30 seconds for both administration routs.

With this deal, Endo is strengthening its position in the breakthrough cancer pain market. Earlier this month, the firm reported positive interim results from a Phase III study of Rapinyl, an oral, fast-dissolving fentanyl formulation. The product met its primary endpoint of decreasing pain intensity within 30 minutes and continues in a second Phase III study. Endo licensed North American rights to Rapinyl from Uppsala, Sweden-based Orexo AB.

And AZ-003 is only one of several fentanyl formulations approved or in development in the increasingly competitive pain market. Besides Endo's Rapinyl, which could gain approval in 2009, there is BioDelivery Sciences International Inc.'s BEMA Fentanyl product, which is under review by the FDA. BEMA Fentanyl, a dissolvable opioid disc that's designed to be absorbed through the lining of the cheek, recently was partnered in North America with Solna, Sweden-based Meda AB in a deal that included a $30 million up-front payment to Morrisville, N.C.-based BDSI, with the potential for $30 million upon the achievement of certain sales milestones. (See BioWorld Today, Sept. 6, 2007.)

Already on the market is Actiq, a fentanyl lozenge on a stick sold by Frazer, Pa.-based Cephalon Inc., which recorded $45.9 million in sales for the third quarter. A fentanyl skin patch also is available from Janssen Pharmaceutica Products LP, a unit of New Brunswick, N.J.-based Johnson & Johnson, under the brand name Duragesic (a generic version of that product is sold by St. Albans, Vt.-based Mylan Technologies Inc.), but transdermally administered fentanyl has taken some hits in the past few years.

Most recently, the FDA issued a second letter warning of safety concerns associated with the fentanyl transdermal system, stating that the agency has continued to receive reports of death and life-threatening side effects following a similar warning issued in July 2005. The warning letter stresses that the product should be administered using precise directions on the product label, and the FDA called on manufacturers to develop a medication guide for patients. (See BioWorld Today, July 22, 2005.)

For Alexza, which said in November that one of its 2007 goals included securing a development partnership, the deal with Endo came in just under the wire.

Over the next year, Alexza will stay busy with several other Staccato programs in its pipeline. The company has AZ-001, a Staccato formulation of prochlorperazine, in Phase II studies in migraine; AZ-002 (Staccato alprazolam), in Phase IIa development in acute panic attacks; AZ-004 (Staccato loxapine), which is set to start Phase III trials in 2008 to treat acute agitation in schizophrenia patients; and AZ-104 (Staccato loxapine), in a Phase IIa trial in migraine.

Alexza, which reported a net loss of $10.8 million for the third quarter, had cash, equivalents and marketable securities totaling $122.7 million as of Sept. 30.

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