Biovail in accord to commercialize Alexza’s CNS drug

Biovail (TSX:BVF; NYSE:BVF) has entered into a collaboration and licence agreement to commercialize Alexza Pharmaceuticals’ AZ-004 drug for the rapid treatment of agitation in patients with schizophrenia or bipolar disorder in the U.S. and Canada.

AZ-004 is a novel formulation of loxapine and is administered via deep lung inhalation using Alexza’s proprietary Staccato device. In December, 2009, Alexza (NASDAQ:ALXA) submitted a new drug application to the FDA for Staccato loxapine. A response from the FDA is expected this October.

“This agreement provides Biovail with a promising late-stage specialty CNS product,” CEO Bill Wells said in a statement. “In clinical studies conducted by Alexza, Staccato loxapine rapidly delivered drug into the bloodstream through the deep lung in a unique, non-invasive manner.”

Under the accord, Biovail paid Alexza an upfront fee of $40 million (U.S.) and could pay up to $90 million in potential milestones contingent on, among other things, the successful approval of the first AZ-004 NDA and successful commercial manufacturing scale-up.

Alexza will supply AZ-004 to Biovail and will receive a per-unit transfer price based on annual product volume. Biovail, which will make tiered, royalty payments of 10% to 25% on net commercial sales of Staccato loxapine, intends to deploy a sales force to commercialize AZ-004 in the U.S.