West Coast Editor

Aiming high in a tight market, Alexza Pharmaceuticals Inc. filed for an initial public offering that would raise up to $86.25 million, with proceeds to help advance its drug candidates for pain, migraine, panic attacks and agitation associated with schizophrenia.

The Palo Alto, Calif.-based company did not specify how many shares are to be sold, or the proposed price per share, but said about $45 million of the proceeds would be earmarked for clinical and preclinical work, with another $5 million going toward manufacturing development and the remainder for general corporate purposes.

Formerly known as Alexza Molecular Delivery Corp., the company deploys what it calls the Staccato system to vaporize drugs into an aerosol for quick delivery through deep-lung inhalation, with an onset described as comparable to intravenous delivery.

The lead candidates include AZ-001 (prochlorperazine) for acute migraines, which finished a 75-patient Phase II trial in October, with a Phase IIb slated for the first half of next year. Another compound, designated AZ-002 (alprazolam) for panic attacks associated with panic disorder, completed a dose-escalation Phase I trial in the fall, and a Phase IIa study is expected in the first half of next year.

A third drug, AZ-004 (loxapine) completed a Phase I dose-escalation trial in November, with a Phase IIa study in schizophrenia patients with agitation planned, also in the first half of next year. It could be busy in 2006, as it also plans to file an investigational new drug application for AZ-003 (fentanyl) to treat acute pain in the cancer and postoperative settings.

In its IPO filing, Alexza said the Staccato technology enables the firm to "move a compound from initial screening through filing of an IND in 12 [months] to 18 months. We intend to file one to two INDs per year for the foreseeable future, as our resources permit."

The maximum amount sought by Alexza matches the target cited by Somaxon Pharmaceuticals Inc., of San Diego, but the latter ended up raising $55 million in this month's only completed IPO in the U.S., not counting an overallotment option, while Washington-based Prestwick Pharmaceuticals Inc. withdrew its proposed bid to go public, citing market conditions. Voyager Pharmaceutical Corp., of Raleigh, N.C., did the same, also citing market conditions. (See BioWorld Today, Dec. 16, 2005.)

Alexza privately raised $52 million in January, and made known then its plan to have four products undergoing trials in a year. As of Sept. 30, the company had about $38.4 million in cash, cash equivalents and short-term securities. (See BioWorld Today, Jan. 7, 2005.)

The firm hopes to trade on Nasdaq under the symbol "ALXA." Underwriters are Piper Jaffray & Co., of Minneapolis, and Pacific Growth Equities LLC, of San Francisco, acting as joint book-running managers, with RBC Capital Markets and JMP Securities, both of New York, acting as co-managers.