Regaining Adasuve rights amid strategic review
Alexza (O:ALXA) is in transition as it is undergoing a strategic review to either unlock value or fund R&D programs such as AZ-007. The decision to reacquire US Adasuve rights from Teva (N:TEVA) may facilitate this process, as an outright sale or royalty agreement for its entire interest in Adasuve may be more straightforward once the US rights are regained. After lowering our revenue and COGS assumptions, our valuation on a standalone basis, net of debt, is $20.9m, or $1.04 per share fully diluted.
US Adasuve rights returning from Teva to Alexza
Following tepid US sales and corporate changes at Teva, Alexza will reacquire the US Adasuve rights by year-end 2015. Teva’s existing $25m loan to Alexza would normally require repayment upon the partnership’s dissolution but Alexza is seeking to restructure or extend payback terms. However, while we do not expect this to be the case, should Teva demand near-term repayment and/or an equity for debt swap, current shareholders could be subject to significant dilution.
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