Alexza Pharmaceuticals, Inc. (ALXA)
Q3 2012 Earnings Call
November 6, 2012 5:00 p.m. ET
Mark Oki - Senior Vice President, Finance and Chief Financial Officer
Thomas King - President and Chief Executive Officer
Stephen Brozak - WBB Securities
Obed Cepeda - Green Coast Capital
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I would now like to turn today’s conference over to Mr. Mark Oki of Alexza. Mr. Oki, you may begin.
Thank you. Good afternoon and welcome to our 2012 third quarter financial results and business update conference call.
Before we get started, I would like to remind you that the matters discussed on this call contain forward-looking statements that involve risks and uncertainties, including those related to the company’s ability to address the issues raised in the May 2012 CRL, the eventual prospects that ADASUVE will be approved for marketing in the U.S. or other locations, the timing of the EMA review of the ADASUVE MAA, our ability to commercialize products, the timing of the commercialization of our products, our projected revenue and expenses, and the ability of Alexza to support operations based on existing cash resources.
Actual results may differ materially from the results predicted and recorded results should not be considered an indication of future performance. These and other risk factors are more fully discussed in our quarterly report on Form 10-Q that we filed with the SEC earlier today, most particularly under the caption, Risk Factors. Alexza disclaims any obligation to update or revise any forward-looking statement made on this call as a result of new information or future developments.
As a reminder, Alexza’s policy is to only provide guidance on product candidates and corporate goals for the next one to two fiscal quarters, and to provide update or reconfirm its guidance only by issuing a press release or filing updated guidance with the SEC in a publicly accessible document. Clinical and corporate milestone guidance is as of today, November 6, 2012, and financial guidance relating to the company’s current cash, cash equivalents, marketable securities and restricted cash is based upon balances as of September 30, 2012.
I’d now like to summarize the financial information for the third quarter of 2012 which was filed earlier today with the SEC on Form 10-Q.
We recorded $0.7 million and $3.3 million of revenues in the three and nine months ended September 30, 2012, and $1.3 million and $3.8 million of revenues in the same periods in 2011. In 2011 and the first quarter of 2012, we recognized revenues from our agreement for Staccato nicotine with Cypress Biosciences, Inc, while in 2012 we also recognized revenues earned under our ADASUVE agreement with Grupo Ferrer.
GAAP operating expenses were $7.1 million and $21.3 million in the three and nine-months ended September 30, 2012 compared to $11.2 million and $29.6 million in the same periods in 2011. R&D expenses were $4.8 million and $14.8 million in the three and nine-months ended September 30, 2012. This compared to R&D expenses of $8.1 million and $21 million in the same periods in 2011. In 2012, we’ve reduced costs through, among other things, reductions in our workforce, completing our outlined work on Staccato nicotine, and suspending on AZ-007, Staccato zaleplon.
G&A expenses were $2.3 million and $6.5 million in the three and nine-months ended September 30, 2012. This compares to G&A expenses of $3.1 million and $8.7 million in the same periods in 2011. In March of 2012, we recorded a non-recurring, non-cash, net contra expense of $1.4 million related to the termination of one our building leases and associated subleases.
Alexza ended the third quarter with cash, cash equivalents, marketable securities and restricted cash of $32 million. We believe with our current cash, cash equivalents, marketable securities and restricted cash and our current expected cash usage, we have sufficient capital resources to meet our anticipated cash needs into the second quarter of 2013. Changing circumstances may cause us to consume capital significantly faster or slower than currently anticipated or to alter our operations.
I will now turn the call to Tom King, Alexza’s President and CEO, for a business update and concluding remarks.
Thanks, Mark. Good afternoon and thanks to all of you for joining our teleconference today. Alexza has been very busy during the past three months since our last update and we have accomplished much with our ADASUVE NDA and MAA. I’m going to start with a general business update. Following this update, I’ll have short concluding remarks and then we’ll open up the conference call for questions and answers.
Since the beginning of the third quarter, we have accomplished the following. In July, Alexza entered into a committed equity financing facility under which we could sell up to $20 million of our registered common stock to Azimuth Opportunity, L.P., over an approximately 24-month period. This financing facility replaced a similar facility that was established in May 2010 and expired after its 24-month term. During the third quarter, Alexza sold 3.5 million shares of common stock under this agreement for aggregate net proceeds of $13.4 million. Alexza remains free to enter into and consummate other equity and debt financing transactions subject to certain restrictions.