Symphony was formed to fund development of these compounds around December 2006.

Alexza Pharmaceuticals exercised its option to purchase Symphony Allegro and thus regains three compounds previously licensed to the company. The purchase comprises stock and warrants and is projected to close in the third quarter of 2009.

Upon closing, Symphony Capital will own approximately 23% of the total outstanding Alexza common stock. Symphony Capital will have the right to nominate one director to the Alexza board of directors as long as its ownership exceeds 10%.

Symphony Allegro was formed about two and half years ago to fund development of three of Alexza’s candidates from the Staccato loxapine and Staccato alprazolam programs; the Stoccato system is Alexza’s inhalation delivery device. The firm was capitalized with $50 million in December 2006 by Symphony Capital Partners and its co-investors.

Alexza has been conducting clinical trials with AZ-004 for the acute treatment of agitation, AZ-104 for the acute treatment of migraine headache, and AZ-002 for the treatment of acute panic attacks with the funds provided by Symphony.

“In our partnership with Symphony Allegro, the intended development of these product candidates has been achieved,” says Thomas B. King, Alexza president and CEO. “In the past 30 months, we have conducted 14 clinical trials with the three product candidates that were licensed into Symphony Allegro. Moreover, we plan to submit Alexza’s first NDA for AZ-004, Staccato loxapine, in the first quarter of 2010.”

New terms were negotiated to implement Alexza’s option to acquire Symphony Allegro, which calls for Alexza to issue Symphony Capital 10 million shares of common stock. Alexza will also issue a five-year warrant for 5 million shares at an exercise price of $2.26 per share, a 25% premium to average closing price over the last 30 days of trading. Accordingly, Symphony’s currently outstanding 2 million shares warrant has been canceled. Finally, Alexza will pay a percentage of earning from future partnering transactions for AZ-004, AZ-104, and/or AZ-002.

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