Alexza shares plunge as FDA refuses to approve AZ-004

Worried by early-stage safety data highlighting troubling respiratory problems for patients taking an inhaled, fast-acting therapy to manage schizophrenia and bipolar disorder, the FDA has decided to hold back on approving Alexza's (ALXA) closely watched AZ-004. And investors weren't taking the news in stride, with shares plummeting by almost half in pre-market trading.

Regulators flagged data showing that patients with asthma and other respiratory conditions, as well as some healthy people, complained of decreased lung function after using the inhaler/therapy. And that includes some people who used the inhaler with a placebo. The device is designed to deliver a quick burst of the antipsychotic loxapine.

"Alexza intends to meet with the FDA in the near future to discuss steps to address this FDA concern," the Mountain View, CA-based developer announced. "As Alexza has previously reported, there were no serious or severe respiratory adverse events in these trials or reported in the two Phase III clinical trials of AZ-004. All respiratory symptoms that developed after treatment in the Phase I subjects with COPD and asthma were either self-limiting or readily managed with an inhaled bronchodilator."

- see the Alexza release
- and here's the story from TheStreet