Approval of the drug to treat agitation in schizophrenia or bipolar disorder recently received a setback.

Biovail Laboratories has given back U.S. and Canadian rights covering AZ-004 (Staccato® loxapine) to Alexza Pharmaceuticals. This follows FDA’s issuance of a complete response letter earlier this month related to the AZ-004 NDA for the treatment of agitation in schizophrenia or bipolar disorder patients, in which the agency voiced some safety concerns and requested additional clinical data.

With the termination of the deal with Biovail, Alexza intends to seek one or more pharmaceutical partners for the worldwide development and commercialization of the candidate. The companies initiated their partnership in February, after Alexza had submitted the NDA for AZ-004. Biovail paid Alexza $40 million up front for U.S. and Canadian rights to the compound in multiple indications.

In September Valeant Pharmaceuticals completed its acquisition of Biovail. The decision to not continue the AZ-004 project came after reviewing the merged company’s pipeline, according to Alexza.

The Staccato system vaporizes unformulated drug to form a condensation aerosol that, when inhaled, allows for rapid systemic drug delivery through deep lung inhalation. AZ-004 is Alexza’s lead program, and the firm reported positive results from both its Phase III trials.

An NDA was submitted in December 2009. Alexza received a complete response letter for AZ-004 earlier this month in which the FDA stated safety concerns related to data from three Phase I pulmonary safety studies with AZ-004. The study revealed dose-related post-dose decreases in forced expiratory volume in one second.

The agency also noted that decreases in FEV1 were recorded in subjects who were administered device-only, placebo versions of AZ-004. Alexza states that there were no serious or severe respiratory adverse events in these trials or in the two Phase III trials. All respiratory symptoms that developed after treatment in the Phase I subjects with COPD and asthma were either self-limiting or readily managed with an inhaled bronchodilator, the firm adds.

The complete response letter also raised issues relating to the suitability of the stability studies undertaken by Alexza and certain other items relating to the agency’s recently completed pre-approval manufacturing inspection.

Because AZ-004 incorporates a novel delivery system, the letter also included input from FDA’s Center for Devices and Radiological Health (CDRH), which requested a human factors study and related analysis to validate that the product can be used effectively in the proposed clinical setting. CDRH also requested further bench testing of the product under an additional worst-case manufacturing scenario.

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