Notes are secured by royalties, milestones from U.S. sales of Adasuve
By Lisa Kerner
Charlotte, N.C., March 19 - Alexza Pharmaceuticals, Inc. placed $45 million of non-recourse notes with institutional investors.
The notes bear interest at 12¼% per annum payable quarterly beginning June 15, according to a company news release.
Alexza may not redeem the notes at its option until after March 18, 2016. They are callable after that date subject to certain circumstances, including the payment of a redemption premium for a certain period of time and achieving certain milestones.
Morgan Stanley & Co. LLC acted as placement agent for the transaction.
Alexza, in conjunction with the transaction, also issued five-year warrants to the noteholders to purchase 345,661 shares of Alexza's common stock at an exercise price of $0.01 per share.
The notes are secured by royalties and potential milestones from U.S. sales of Adasuve (loxapine) inhalation powder.
Alexza said all royalties and milestones, after paying interest, administrative fees and any applicable taxes, will be applied to the principal of the notes until they are paid in full.
"With the proceeds from this transaction, we expect to have sufficient cash to fund Alexza's operations into 2015," Alexza president and chief executive officer Thomas B. King said in the news release. "In addition, once the notes are repaid, all royalties and milestones will revert to Alexza, thereby providing Alexza full participation in the potential future payments from Teva with respect to sales of Adasuve."
Teva Pharmaceuticals USA, Inc. is Alexza's commercial partner for Adasuve in the United States.
Alexza established a $6.89 million interest reserve account from the proceeds of the transaction to cover any potential shortfall in interest payments.
The net proceeds to Alexza, after fees and expenses, will be about $41 million before establishment of the interest reserve account.
Alexza is a Mountain View, Calif., pharmaceutical company.
| Issuer: | Alexza Pharmaceuticals, Inc.
|
| Issue: | Non-recourse notes
|
| Amount: | $45 million
|
| Interest: | 12¼%
|
| Warrants: | For 345,661 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.01
|
| Call option: | After March 18, 2016 subject to certain circumstances
|
| Agent: | Morgan Stanley & Co. LLC
|
| Settlement date: | March 19
|
| Distribution: | Private placement
|
| Stock listing: | Nasdaq: ALXA
|
| Stock price: | $4.99 at close March 18
|
| Market cap: | $85.46 million
|
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