vs. Alexza Pharmaceuticals 2006 Annual Report vs. fast delivery With many medical conditions, speed of treatment is critical. Episodes of these “acute and intermittent” conditions—such as migraine headaches, panic attacks, breakthrough pain, agitation, and more— can quickly become debilitating. Alexza’s Staccato® system provides needed medication as fast as an injection. With just one breath, patients receive a dose of pure aerosolized drug—deep into their lungs—where it is quickly absorbed into the blood stream to begin providing therapeutic effect. vs. easy to use Using a Staccato device is as simple and intuitive as breathing. Doses are pre-set and there are no controls to deal with. About the size of a cell phone, the device fits easily in a pocket or purse. Patients don’t need to learn how to use the Staccato device—it is intuitive—nor do they have to rely on a caregiver to administer their medication. When the need arises, even unexpectedly, one breath is all it takes. 2 vs. more consistent Other inhalation drug delivery methods add fillers and excipients to the therapeutic compound. The proprietary Staccato system uses pure drug layered as a thin film on a substrate. The substrate heats rapidly when triggered by a patient inhalation. The drug instantly vaporizes and condenses into aerosol particles ranging from 1 to 5 microns in diameter—the optimal size to reach the highly vascular tissue of the deep lung for absorption into the blood stream. And the system produces a consistently high emitted dose regardless of the patient’s breathing pattern. 4 vs. rapid relief Traditional forms of drug delivery—tablets, patches, needles or other inhalers—are either too slow, painful, or inconsistent to optimally treat acute and intermittent conditions. The Staccato system overcomes these drawbacks with speed of delivery and speed of onset. The aerosolized drug particles reach deep into the lung where there is more surface area and thinner mucous membranes for more rapid uptake. The result: peak plasma levels in just two to five minutes and the potential for quick relief. 6 the results Clinical trial data indicate that Alexza’s unique Staccato technology generates consistent distribution of aerosolized drug particles of 1 to 5 microns (the ideal size for absorption in deep lung tissue), providing peak plasma concentrations as quickly as an intravenous injection and rapid onset of therapeutic relief. zConsistent Particle Size Distribution AZ-001 100% l AZ-004 o s 80% o r e a 60% n i s e l 40% c i t r a 20% the technology p % Our founder, Dr. Alejandro Zaffaroni, long inter- As the patient inhales the aerosol, the The Staccato system offers other significant 0% ested in alternative routes of drug delivery, small particles are drawn into the lung. These advantages over traditional drug delivery <1 1-5 >5 particle size (microns) turned his attention to inhalation because it perfectly sized particles can be drawn down methods. It can, for example, work very effec- had the potential for efficient drug delivery at into the narrower, more vascularized tissue of tively with compounds that are not water soluble extraordinary speed that had not been fully the deep lung, allowing faster and more com- and therefore difficult to formulate into pills realized by any then-existing technologies. His plete absorption into the bloodstream. The or liquid suspensions. And other inhalation zConsistent IV-Like PK Across 3 Compounds on the Single Dose Platform vision was clear—an “inhalable tablet”—a entire process takes only a single breath, as methods, such as dry powder or aqueous solu- Phase I studies in healthy volunteers vision that conveys ease of use, broad appli- fast as an intravenous injection and as easy tions, often must add excipients, stabilizers, AZ-001 cability, patient convenience—and at the same as a pill. and solvents to achieve consistent and readily n 100% o i AZ-002 t time, took very unconventional thinking to com- bioavailable compounds. The Staccato system a r ) 80% AZ-004 t e n bine an energy source with a drug compound. uses only pure drug in a highly accurate and u e l c a Before Inhalation n 60% z v The result of this Zaffaroni vision is the reproducible dose. a visionary founder: Alejandro Zaffaroni o k c a a Staccato system, which rapidly heats a phar- Importantly, the Staccato system is designed e 40% Alexza is the 12th company started by p Drug Coating m s f a o macologically potent substance to produce a for simplicity. Its extraordinary value is reflected l Dr. Alejandro Zaffaroni. We believe our p 20% % ( s highly bioavailable aerosol. All the patient in the intellectual property—the aerosolized u success to date is a direct reflection of his o 0% n needs to do is take one simple, deep breath. form of drug compounds produced by the e 0 5 10 15 20 25 30 original strategic vision. As with the other v The heart of the hand-held Staccato system Staccato system, the methods of making and minutes post dose biopharmaceutical ventures he founded— is a heat package, made with a stainless steel using the aerosol, as well as the Staccato system including ground-breaking firms such as substrate, onto which a thin film of pure drug Substrate and its components. The elegantly designed Affymax NV, Affymetrix, Alza, DNAX, Maxygen is coated. The heat package is connected to a device has few components and is relatively and Symyx—Dr. Zaffaroni defined a clear zAZ-001 Efficacy Data Placebo small printed circuit board containing a battery easy and affordable to manufacture. Speed of Onset 5mg market need, identified or invented a unique and airflow sensor. The technology’s simplicity makes it highly 7.5mg technology to meet that need, and brought zAfter Inhalation ) s 70% h When the patient draws a normal breath adaptable. Alexza has already screened and i 10mg together the intellectual, human, and ( Drug Aerosol f 60% e through a Staccato device, the movement of identified approximately 200 drug compounds i financial capital to pursue a new and exciting l e r 50% air triggers the sensor, which sends a battery that have demonstrated initial feasibility for n idea. His energy, enthusiasm, and insight i a 40% p charge to the heat package. Within 250 delivery by a Staccato system. As we look are an integral part of Alexza’s corporate h t i 30% w milliseconds, the substrate surface heats to beyond our first four product development DNA and continue to inspire s t 20% approximately 400°C. The drug coating, programs, we are optimistic that our propri- n our efforts to better treat e i t a 10% which has a high surface-to-volume ratio, rap- etary technology will support a wide array of p the millions of patients Heated Substrate f o 0% idly evaporates creating a condensation new therapies targeting acute and intermit- with acute and intermittent % 0 15 30 45 60 120 aerosol of pure drug. tent conditions. minutes post dose conditions. 8 experienced group of managers to lead the Excellent Clinical Progress zIn a Phase I safety trial that completed in experienced group of managers to lead the A snapshot of our four clinical programs is on the December, our fourth candidate, AZ-003 clinical, manufacturing, research, quality, com- opposite page. As you can see, each of these (Staccato fentanyl) for treating episodes of mercial, regulatory, and other functions we product candidates is progressing well, and we acute pain, was safe and well tolerated, and believe are needed to take Alexza products up are especially enthusiastic about our two most demonstrated pharmacokinetics similar to to, and through, commercial launch. advanced programs, AZ-001 and AZ-004. intravenous delivery. We intend to accelerate our business This trial is of particular interest to us development activities in 2007. We have had zAZ-001 applies the Staccato system to because AZ-003 incorporates the Staccato discussions with a variety of potential partners, the treatment of migraine, using the drug Electric Multiple Dose (EMD) system, which from global pharmaceutical firms to growing prochlorperazine, which has shown positive gives patients and physicians additional dosing biotech companies, who recognize that our therapeutic impact on migraine and which options for treating their acute and intermittent Staccato system is adaptable to a wide range does not appear to carry the same cardiovas- conditions. The EMD allows patients to dose of compounds, including the ones we have cular risk seen with other migraine drugs. The themselves and titrate to the minimal effective identified and the ones identified by possible results from our 400-patient multi-center dose, providing greater control of their pain partners. Our initial development strategy has Phase IIb trial show that AZ-001 met the primary management. While we are very optimistic about focused on incorporating well-established, endpoint of pain relief at two hours post-dose, the EMD system based on this initial trial, we FDA-approved drugs into our system, but if in all three doses tested. currently do not plan to develop the system or appropriate, we may initiate programs using Importantly, AZ-001 was shown to provide AZ-003 further until we secure a corporate novel compounds or drugs. significantly faster and more sustained pain relief partner for the program. For example, there are many drugs that are a strong product pipeline to Alexza stockholders than placebo. AZ-001 also showed effectiveness known to provide valuable therapeutic effect AZ-001 Staccato prochlorperazine Alexza made excellent progress in 2006. We in mitigating the migraine symptoms of nausea, Strong Foundations for Growth for acute and intermittent conditions, but SCR PRE IND I IIA IIB filed our fourth IND.