Alexza Amends ADASUVE Commercial Partnership Agreements

Alexza Pharmaceuticals, Inc.

today announced that it has updated and amended its ADASUVE® (Staccato® loxapine) commercial partnerships with Grupo Ferrer Internacional, S.A. (Ferrer) and Teva Pharmaceutical Industries Ltd. (Teva). Ferrer is Alexza's commercial partner for ADASUVE in the European Union, Latin America, the Commonwealth of Independent States and other countries in Europe. Teva is Alexza's commercial partner for ADASUVE in the United States. As previously announced in May 2015, Alexza analyzed various initiatives that could reduce manufacturing costs, including supply chain requirements, to make global production more efficient and cost-effective. As a result of this analysis, Alexza plans to complete ADASUVE commercial production for Ferrer and Teva pending orders in the third quarter of 2015, and then will suspend ADASUVE commercial production operations. The primary goal of this action is to reduce Alexza's underutilized manufacturing capacity, overhead expenses and related costs, while fulfilling the supply requirements of its commercial partners. In connection with the modification to the manufacturing obligations by Alexza, which also included evaluation of internal and possible external (third party) manufacturing capabilities or alternatives, the companies have updated and amended their commercial partnerships. "The comprehensive amendments we have completed allow for continued commercialization of ADASUVE while providing flexibility to reflect market learnings during the launch of the product," said Thomas B. King, President and CEO of Alexza Pharmaceuticals. "We believe the sales during the global launch of ADASUVE do not reflect the clinical benefits ADASUVE can convey to patients, and we remain confident in ADASUVE's long-term commercial prospects. Early feedback from physicians and patients corroborate the positive clinical profile we observed with ADASUVE during its clinical development." King continued, "We believe we are making solid decisions regarding how to run our business for the future and are making strategic changes to our business model. Amending our agreements with Ferrer and Teva will allow us to reduce the costs of producing ADASUVE and eliminate the costs associated with some of the EU post-approval commitments, with the overall goal of substantially reducing our cash burn rate." Ferrer and Alexza Agreement Amendment Alexza's Manufacturing Obligations: Alexza and Ferrer have agreed to identify more suitable long-term solutions for future ADASUVE manufacturing. Alexza's current ADASUVE manufacturing obligations are to be suspended for a period of time. During the manufacturing suspension period, Alexza and Ferrer will evaluate internal and possible external (third party) manufacturing capabilities. Ferrer's Right to Manufacture: Ferrer and Alexza have agreed that Ferrer will have the option to manufacture ADASUVE at its facilities. If Ferrer chooses to exercise its option, it will be granted ADASUVE manufacturing rights for the Ferrer territories, including an option to manufacture certain additional Staccato products for the Ferrer territories. MAA Transfer to Ferrer: Alexza will transfer the EU Marketing authorization for ADASUVE (MAA), to Ferrer. The MAA transfer includes the responsibilities for the ongoing post-approval clinical studies (the PASS and DUS studies), a future Phase 3 study in adolescents, as well as ongoing pharmacovigilance responsibilities. Milestone Payment Elimination: In consideration for taking on additional responsibilities, the specific milestone payments for first commercial sales in Russia, Brazil and Turkey have been eliminated. Territory and Technology Expansion: Ferrer will gain ADASUVE registration and commercialization rights for Middle East and North Africa (MENA), Korea, Philippines, and Thailand territories. In addition, Ferrer will have the option to develop and commercialize additional Staccato products for the Ferrer territories, with certain rights outside of the current Ferrer territory, in consideration for royalties to Alexza. Teva and Alexza Agreement Amendment Alexza's Manufacturing Obligations: Alexza and Teva have agreed to identify more suitable long-term solutions for future ADASUVE manufacturing. Alexza's current ADASUVE manufacturing obligations are to be suspended for a period of time. During the manufacturing suspension period, Alexza and Teva will evaluate internal and possible external (third party) manufacturing capabilities. Modification of Teva's Commercial Obligations: Alexza and Teva have agreed to adjust certain of Teva's commercial diligence obligations related to ADASUVE for a period of time. Teva will continue to use commercially reasonable efforts to commercialize ADASUVE in the U.S., be responsible for all related regulatory and clinical activities, and will continue to be responsible for royalties and milestone payments on the U.S. sales of ADASUVE. Modification to Teva note: The maturity note will be extended for a time equal to the duration of manufacturing suspension period. No interest will accrue on the Teva note during the manufacturing suspension period. During the manufacturing suspension period Alexza plans to work with its commercial partners to find the most efficient path for future ADASUVE manufacturing and assure ADASUVE supplies for current and new markets.