Biovail and Alexza Pharmaceuticals sign collaboration and license agreement for anti-agitation drug

Biovail Corporation (NYSE:BVF) (TSX:BVF) today announced that its subsidiary, Biovail Laboratories International SRL (BLS), has entered into a collaboration and license agreement with Alexza Pharmaceuticals, Inc.

BLS has acquired the U.S. and Canadian rights to commercialize AZ-004 – a novel formulation of loxapine administered via deep lung inhalation using Alexza’s proprietary Staccato® device. AZ-004 is initially targeted for the rapid treatment of agitation in patients with schizophrenia or bipolar disorder. In December 2009, Alexza submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for Staccato loxapine. A response from the FDA is anticipated in October 2010.

“In clinical studies conducted by Alexza, Staccato loxapine rapidly delivered drug into the blood stream through the deep lung in a unique, non-invasive manner. We are delighted to be partnering with Alexza to bring this important treatment to market.”

“This agreement provides Biovail with a promising late-stage specialty CNS product,” said Bill Wells, Biovail’s Chief Executive Officer. “In clinical studies conducted by Alexza, Staccato loxapine rapidly delivered drug into the blood stream through the deep lung in a unique, non-invasive manner. We are delighted to be partnering with Alexza to bring this important treatment to market.”

The collaboration provides for the development and commercialization of AZ-004 for multiple indications, including the initial indication of treating agitation in schizophrenia and bipolar patients, combined with potential future clinical development for the treatment in additional psychiatric and/or neurological indications and the symptoms associated with these indications.

Biovail intends to deploy a sales force to commercialize AZ-004 in the U.S. Alexza will continue to manage the ongoing AZ-004 NDA review and approval process in connection with the initial indication, and has entered into a manufacturing and supply agreement to supply Biovail clinical and commercial product.

Under the terms of the agreement, Biovail has paid an upfront fee of $40 million, and could pay up to $90 million in potential milestones contingent on the successful approval of the first AZ-004 NDA, successful commercial manufacturing scale-up, and the successful completion of additional clinical trials, regulatory submission (if required) and approval of a supplemental NDA (if required) in the outpatient setting for patients with schizophrenia or bipolar disorder. Biovail will also make tiered, royalty payments of 10% to 25% on net commercial sales of Staccato loxapine. Alexza will supply AZ-004 to Biovail for commercialization, and will receive a per-unit transfer price, based upon annual product volume.

The AZ-004 NDA contains efficacy and safety data from more than 1,600 patients and subjects who have been studied in thirteen different clinical trials. In 2008, Alexza announced that it successfully initiated and completed two pivotal Phase 3 clinical trials. In connection with these studies, Alexza reported that both doses of AZ-004 (5mg and 10mg) met the primary and key secondary endpoints of the studies with statistically significant reductions in agitation, as compared to placebo. In these studies, the administration of AZ-004 was generally safe and well tolerated.