The alarm bells are ringing at Alexza Pharmaceuticals ($ALXA) as the small biotech announced a weak set of financials and the stark warning that without help, it will likely shut down operations by the summer.
In its Q4 results, released this morning, the Mountain View, CA-based company saw a net loss of $3 million, with quarterly total revenues coming in at a paltry $673,000, compared to $1.5 million a year ago.
But its biggest problem is that the company "has sufficient capital resources to meet its anticipated cash needs until end of April 2016"--but not beyond. If it can't find an emergency cash injection within a month, it could be forced to completely shutter its operations.
The biotech said in a statement: "Even if circumstances do not cause Alexza to consume capital significantly faster or slower than currently anticipated, Alexza may be forced to significantly reduce operations if its business prospects do not improve. If Alexza is unable to source additional capital, it may be forced to shut down operations altogether."
Its key drug, the inhaled antipsychotic Adasuve, was approved by the FDA back in 2012, along with its Staccato inhaled drug technology.
The drug was originally co-marketed with Israeli generics giant Teva ($TEVA), but late last year Alexza regained the U.S. rights after uptake in hospitals proved overly complex, with sales reflecting this reality.
It had a long road to approval, with lingering questions from the regulator over the drug's manufacturing. The biotech has seen a number of rounds of layoffs and tumbling shares over a difficult few years.
Alexza is in emergency talks with Spanish biopharma Grupo Ferrer for the company to acquire all of the outstanding shares of its common stock, but no decision has yet been made. It did gain an additional $1 million drawn in March under a promissory note issued to Ferrer from last year, but this will only keep Alexza going until the end of April.
Thomas King, president and CEO of the beleaguered company, said: "In the last 6 months, we have decreased our costs, repositioned our management team, secured additional financing and continued to work with Guggenheim [the corporate strategy consultancy] to explore strategic options."
King added that he continued to "remain confident in the long-term commercial prospects for Adasuve globally."
He said that Alexza "will continue to evaluate all of our options" and "pursue the strategy that we believe will allow us to maximize value for our stockholders."
- check out the release