Alexza to acquire Symphony Allegro

Alexza Pharmaceuticals Inc. (NASDAQ:ALXA) gained $0.88 (51%) to $2.60 on Tuesday after exercising its option to acquire Symphony Allegro Inc. (Rockville, Md.) in a stock deal. Alexza gained the option in 2006 when it out-licensed neurology compounds to Symphony Allegro, which was formed by Symphony Capital with an investment of $50 million. Symphony Capital will receive 10 million shares of Alexza, which are valued at $26 million based on Alexza's Tuesday close. Symphony Capital also will receive a five-year warrant for 5 million shares of Alexza stock exercisable at $2.26 per share, a 31% premium to Alexza's close of $1.72 on Monday, before the deal was announced. The outstanding 2 million shares warrant priced at $9.91 was canceled. After the expected closing in 3Q09, Symphony Capital will own 23% of Alexza's outstanding shares (See BioCentury, Dec. 11, 2006).

Symphony Capital also is eligible for about 23% of the first $100 million in cash payments from future partnering deals for the compounds. Alexza also will get Symphony Allegro's remaining cash, which was $17.6 million at March 31. ...