BioCentury
ARTICLE | Company News

Alexza, Symphony Allegro deal

June 22, 2009 7:00 AM UTC

Alexza exercised its option to acquire Symphony Allegro in a stock deal. Alexza gained the option in 2006 when it out-licensed neurology compounds to Symphony Allegro, which was formed by Symphony Capital with an investment of $50 million. Symphony Capital will receive 10 million shares of Alexza, which are valued at $26 million based on Alexza's close of $2.60 on June 16, the day the deal was announced. Symphony Capital also will receive a five-year warrant for 5 million shares of Alexza stock exercisable at $2.26 per share, a 31% premium to Alexza's close of $1.72 on June 15, before the deal was announced. The outstanding two million shares warrant priced at $9.91 was canceled. After the expected closing in 3Q09, Symphony Capital will own 23% of Alexza's outstanding shares (see BioCentury, Dec. 4, 2006).

Symphony Capital also is eligible for about 23% of the first $100 million in cash payments from future partnering deals for the compounds. Alexza also will get Symphony Allegro's remaining cash, which was $17.6 million at March 31. Alexza, which reduced headcount in February, had $40.7 million in cash and a three-month operating loss of $6.8 million at March 31. Alexza's cash figure includes $17.6 million in investments held by Symphony Allegro. At Dec. 31, 2008, Alexza had a 12-month operating loss of $78.7 million. ...