Alexza pulls plug on pain drug and one-third of employees

alexza-logoAlexza Pharmaceuticals announced the elimination fo 52 employees, or a third of its staff, last week the same day it reported the cancellation with Endo Pharmaceticals of a joint development agreement for Alexza’s AZ-300 drug candidate designed to treat abnormal flare-ups of pain in addition to the chronic pain suffered by cancer patients and others.

Endo originally paid Alexza a $10 million upfront fee, and committed itself to the payment of development milestone fees totaling $40 million, which won’t be happening now. Alexza called off further development of AZ-300 through the end of 2009.

Alexza will instead focus on the “continued rapid development” of AZ-004, its treatment designed for schizophrenic patients with acute agitation. As of Sept. 30, 2008, Alexza reported having $78 million in cash and investments, but it also reported burning through $36.8 million to fund operations.

Alexza projects that, as a result of this restructuring, it has enough money on hand to “maintain its currently planned operations into” the second quarter of 2010.

 

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