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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>As filed with the Securities and Exchange Commission on September&nbsp;9, 2009</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><B>Registration No.&nbsp;333-</B>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-1</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>ALEXZA PHARMACEUTICALS, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2834</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>77-0567768</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Primary Standard Industrial
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Classification Code Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Alexza Pharmaceuticals, Inc.<BR>
2091 Stierlin Court<BR>
Mountain View, California 94043<BR>
(650)&nbsp;944-7000</B><BR>
(Address, including zip code, and telephone number, including area code, of the Registrant&#146;s principal executive offices)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Thomas B. King<BR>
President and Chief Executive Officer<BR>
Alexza Pharmaceuticals, Inc.<BR>
2091 Stierlin Court<BR>
Mountain View, California 94043<BR>
(650)&nbsp;944-7000</B><BR>
(Name, address, including zip code, and telephone number, including area code, of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B><I>Copies to:</I></B><BR>
<B>James C.T. Linfield, Esq.<BR>
Brent D. Fassett, Esq.<BR>
Cooley Godward Kronish LLP<BR>
380 Interlocken Crescent<BR>
Suite&nbsp;900<BR>
Broomfield, Colorado 80021<BR>
(720)&nbsp;566-4000</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Approximate date of commencement of proposed sale to the public:</B><BR>
From time to time following the effectiveness of this Registration Statement.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933, as amended (the &#147;Securities
Act&#148;), check the following box. <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large
accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the
Exchange Act.
</DIV>

<DIV align=center>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

  <TR style="FONT-SIZE: 6pt">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=top noWrap align="left">Large accelerated filer <FONT face=Wingdings>o</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top noWrap align="center">Accelerated filer <FONT face=Wingdings>&#254;</FONT>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD noWrap align="center">Non-accelerated filer &nbsp; <FONT face=Wingdings>o</FONT><BR>(Do not check if a smaller reporting company)</TD>
    <TD align="center">&nbsp;</TD>
    <TD vAlign=top noWrap align="center">Smaller reporting company <FONT face=Wingdings>o</FONT>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 0pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of Each Class of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Aggregate</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Securities to be Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registered(1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share (1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Price (1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registration Fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock, $.0001 par value</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">10,000,000</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2.57</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">25,700,000.00</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">1,434</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock, $.0001 par
value, issuable upon the
exercise of warrants</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">5,000,000</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2.57</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">12,850,000.00</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$717</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:30px; text-indent:-15px">Total (3)</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">15,000,000</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2.57</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">38,550,000.00</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2,151</TD>
    <TD nowrap style="border-top: 2px solid #000000">(2)</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 6pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>In accordance with Rule&nbsp;457(c), this price is estimated solely for purposes of calculating
the registration fee and is based upon the average of the high and low sales prices of the
common stock as reported on the NASDAQ Global Market on September&nbsp;2, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule 457(p) under the Securities Act, the Registrant hereby offsets the total
Registration Fee due under this registration statement by the amount of the filing fee
associated with the unsold securities from the Registrant&#146;s registration statement on Form
S-3, filed with the Commission on March&nbsp;30, 2007 (SEC File No.&nbsp;333-141724). The Registrant
had registered securities for a maximum aggregate offering price of $19,820,000 on that
registration statement. The Registrant has not sold any of the common stock registered
therein, leaving a balance of unsold securities with an aggregate offering price of
$19,820,000; the associated filing fee of $609.00 for such unsold securities, calculated under
Rule&nbsp;457(o), is hereby used to offset the current Registration Fee due.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416 under the Securities Act, the Registrant is also registering such
additional indeterminate number of shares as may become necessary to adjust the number of
shares as a result of a stock split, stock dividend or similar adjustment of its outstanding
common stock.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with </B><B>Section 8(a)</B><B> of the Securities Act, or until the registration statement shall
become effective on such date as the Commission, acting pursuant to said Section&nbsp;</B><B>8(a)</B><B>, may
determine.</B>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">








<P style="padding: 5px; border: 3px double #000000; font-size: 11pt; color: #FF0000">The information in this prospectus is not complete and may be changed.&nbsp;We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is
effective.&nbsp;This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not permitted.


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Subject to Completion, dated September&nbsp;9, 2009
</DIV>


<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><B>15,000,000 Shares</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="d69061d6906100.gif" alt="(ALEXZA LOGO)">

</DIV>

<DIV align="Center" style="font-size: 18pt; margin-top: 6pt"><B>Alexza Pharmaceuticals, Inc.</B>

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><B>Common Stock</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to offers and resales or other dispositions by the selling
stockholders listed in this prospectus, including their transferees, pledgees or donees or their
respective successors, of up to 15,000,000 shares of our common stock, which includes up to
5,000,000 shares of our common stock issuable upon the exercise of warrants. We are registering
these shares on behalf of the selling stockholders, to be offered and sold by them from time to
time.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These shares may be sold by the selling stockholders from time to time in the over-the-counter
market or on any national securities exchange or automated interdealer quotation system on which
our common stock is then listed or quoted, through negotiated transactions or otherwise. The prices
at which the selling stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. We will not receive any of the proceeds from
the disposition of these shares by the selling stockholders, other than as a result of the exercise
for cash of warrants held by the selling stockholders.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No underwriter or other person has been engaged to facilitate the sale of shares of our common
stock in this offering. The selling stockholders may be deemed underwriters of the shares of our
common stock that they are offering. We will bear all costs, expenses and fees in connection with
the registration of these shares. The selling stockholders will bear all commissions and discounts,
if any, attributable to their respective sales of shares.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is currently listed on the NASDAQ Global Market under the symbol &#147;ALXA&#148;. On
September&nbsp;8, 2009, the last reported sale price of our common stock on NASDAQ was $2.77 per
share.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>See &#147;Risk Factors&#148; beginning on page 4 to read about factors you should consider before
buying shares of our common stock.</I>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed on the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Prospectus dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2009
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">ABOUT THIS PROSPECTUS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">PROSPECTUS SUMMARY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">DETERMINATION OF OFFERING PRICE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">DIVIDEND POLICY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">MARKET PRICE OF OUR COMMON STOCK</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">SELLING STOCKHOLDERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">PLAN OF DISTRIBUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">VALIDITY OF COMMON STOCK</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d69061exv5w1.htm">EX-5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d69061exv21w1.htm">EX-21.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d69061exv23w1.htm">EX-23.1</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ABOUT THIS PROSPECTUS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is part of a registration statement on Form S-1 that we filed with the
Securities and Exchange Commission (the &#147;SEC&#148;) using the &#147;shelf&#148; registration process. Under this
process, selling stockholders may from time to time, in one or more offerings, sell the securities
described in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in or incorporated by reference into this
prospectus (as supplemented and amended). We have not authorized anyone to provide you with
different information. This document may only be used where it is legal to sell these securities.
You should not assume that the information contained in this prospectus is accurate as of any date
other than its date regardless of the time of delivery of the prospectus or any sale of the
securities described in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus and the information incorporated herein by reference includes trademarks,
service marks and trade names owned by us or others. All trademarks, service marks and trade names
included or incorporated by reference into this prospectus or any applicable prospectus supplement
are the property of their respective owners.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We urge you to read carefully this prospectus, together with the information incorporated
herein by reference, as described under the heading &#147;Where You Can Find More Information,&#148; before
deciding whether to invest in any of the securities being offered.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;References in this prospectus to &#147;Alexza,&#148; &#147;we,&#148; &#147;us&#148; and &#147;our&#148; refer to Alexza Pharmaceuticals,
Inc., a Delaware corporation, and its subsidiaries. Our principal executive offices are located at
2091 Stierlin Court, Mountain View, CA 94043 and our telephone number is (650)&nbsp;944-7000. Our web
site address is http://www.alexza.com. The information contained in, or that can be accessed
through, our web site is not part of this prospectus.
</DIV>


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<P>
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<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary may not contain all the information that may be important to you. You should read
the entire prospectus, including the financial data and related notes, risk factors and other
information contained in or incorporated by reference in this prospectus (as supplemented and
amended), before making an investment decision.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Business and Technologies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a pharmaceutical development company focused on the research, development, and
commercialization of novel proprietary products for the acute treatment of central nervous system,
or CNS, conditions. All of our product candidates are based on our proprietary technology, the
<I>Staccato </I>system. The <I>Staccato </I>system vaporizes an excipient-free drug to form a condensation
aerosol that, when inhaled, allows for rapid systemic drug delivery. Because of the particle size
of the aerosol, the drug is quickly absorbed through the deep lung into the bloodstream, providing
speed of therapeutic onset that is comparable to intravenous, or IV, administration but with
greater ease, patient comfort and convenience. We currently have six product candidates in various
stages of clinical development, ranging from Phase 1 through late-stage Phase 3. In 2009, our focus
is on the continued rapid development of AZ-004, with a goal of submitting our AZ-004 New Drug
Application, or NDA, in the first quarter of 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have identified approximately 200 drug compounds that have demonstrated initial
vaporization feasibility for delivery with our technology. We believe that a number of these drug
compounds, when delivered by the <I>Staccato </I>system, will have a desirable therapeutic profile for the
treatment of acute and intermittent conditions. We are initially focusing on developing proprietary
products by combining our <I>Staccato </I>system with small molecule drugs that have been in use for many
years and are well characterized to create aerosolized forms of these drugs. We believe that we
will be able to reduce the development time and risks associated with our product candidates,
compared to the development of new chemical entities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our clinical-stage product candidates are:

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-004 (Staccato loxapine). </I>We are developing AZ-004 for the acute treatment of
agitation in patients with schizophrenia or bipolar disorder. In 2008, we successfully
initiated, enrolled and completed our two pivotal Phase 3 clinical trials. We announced
positive results from these two studies in September and December&nbsp;2008, and presented data
from these clinical trials at the American Psychiatry Association annual meeting in May
2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">During 2009, we have five non-pivotal safety and NDA-supporting studies to conduct, which
will complete our planned NDA clinical work. During the first quarter of 2009, we completed
a Phase 1 placebo-controlled study in 30 healthy subjects to assess the pulmonary safety of
AZ-004. We observed that AZ-004, administered twice within a 24-hour period, was safe and
generally well tolerated in this study. There were no systematic effects on pulmonary
function vs. placebo, and no respiratory adverse events.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">During the second quarter, we initiated the four remaining AZ-004 non-pivotal safety and
NDA-supporting studies. These studies were a thorough QTc study in healthy subjects, a
smoker/non-smoker pharmacokinetic, or PK, study in healthy subjects, a pulmonary safety
study in subjects with asthma and a pulmonary safety study in subjects with chronic
obstructive pulmonary disease, or COPD.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">We completed the enrollment in the Phase 1 placebo-controlled thorough QTc study in 48
healthy subjects. The purpose of a thorough QTc study is to determine a drug&#146;s potential
effect on cardiac rhythms. In this study, we found that the active control, moxifloxacin,
produced a positive QT/QTc signal that validated the sensitivity of the clinical study. At
all timepoints for the primary analysis, the
confidence intervals of the QTc for AZ-004 were within the United States Food and Drug
Administration, or FDA, standard 10 millisecond window, supporting the cardiac safety of
AZ-004.
</DIV>
</DIV>



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<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">We completed enrollment in the Phase 1 smoker/non-smoker PK study in 35 healthy subjects. We
observed comparable blood levels in smokers and non-smokers for both AZ-004 and the
metabolites of AZ-004. Side-effect profiles were similar in smokers and non-smokers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">We have also completed the enrollment of the two pulmonary safety studies, one in subjects
with asthma and one in subjects with COPD. We expect to complete the data collection and
data analysis in both of these studies by the end of the third quarter of 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In July&nbsp;2009, we completed our AZ-004 pre-NDA meeting with the FDA. We have confirmed our
understanding of the NDA submission contents, and we continue to project our AZ-004 NDA
submission for the first quarter of 2010.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-104 (Staccato loxapine)</I>. We are developing AZ-104 to treat patients
suffering from acute migraine headaches. AZ-104 is a lower-dose version of AZ-004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In June&nbsp;2009, we completed enrollment in our Phase 2b clinical trial, enrolling
366 patients with migraines. This outpatient, multi-center, randomized, double-blind,
single-dose, placebo-controlled study was initiated in January&nbsp;2009. Two dose levels of
AZ-004 are being evaluated in the clinical trial, 1.25 mg and 2.5 mg. The primary
efficacy endpoint for the trial is headache pain relief at 2 hours post-dose, using the
standard IHS 4-point rating scale. Secondary efficacy endpoints for the trial include
pain relief and other symptom assessments at various time points. Safety evaluations
were also made throughout the clinical trial period. We project that data from this
Phase 2b study will be available before the end of the third quarter of 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-001 (Staccato prochlorperazine)</I>. We are developing AZ-001 to treat
patients suffering from acute migraine headaches. During the third quarter of 2008, we
conducted an end-of-Phase 2 meeting with the FDA. We believe we have a clear
understanding of the development requirements for filing an NDA for this product
candidate. We do not intend to conduct any AZ-001 Phase 3 studies without a partner,
and we are continuing to seek partners for our two <I>Staccato </I>migraine product
candidates, AZ-001 and AZ-104.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-007 (Staccato zaleplon)</I>. We are developing AZ-007 for the treatment of
insomnia in patients who have difficulty falling asleep, including patients who awake
in the middle of the night and have difficulty falling back asleep. AZ-007 has
completed Phase 1 testing and we announced positive results from this study. During
2009, we do not intend to conduct any AZ-007 Phase 2 studies without a partner.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-003 (Staccato fentanyl)</I>. We are developing AZ-003 for the treatment of patients
with acute pain, including patients with breakthrough cancer pain and postoperative patients
with acute pain episodes. We have completed and announced positive results from a Phase 1
clinical trial of AZ-003 in opioid na&#239;ve healthy subjects. We do not expect to pursue the
development of AZ-003 without a partner.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I><B>&#149;</B> AZ-002 (Staccato alprazolam). </I>AZ-002 has completed a Phase 1 clinical trial in healthy
subjects and a Phase 2a proof-of-concept clinical trial in panic disorder patients for the
treatment of panic attacks, an indication we are not planning to pursue. However, given the
safety profile, the successful and reproducible delivery of alprazolam, and the IV-like
pharmacological effect demonstrated to date, we are assessing AZ-002 for other possible
indications and renewed clinical development. During 2009, we do not intend to conduct any
AZ-002 Phase 2 studies without a partner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to the resale by the selling stockholders listed in this prospectus,
which include Symphony Capital Partners, L.P. (&#147;Symphony Capital&#148;), Symphony Strategic Partners,
LLC (&#147;Symphony Strategic
Partners&#148;) and certain other investors of Symphony Allegro Holdings LLC (&#147;Holdings&#148;), of up to
15,000,000 shares of our common stock, 5,000,000 shares of which are issuable upon the exercise of
warrants held by the selling stockholders. All of the shares, when sold, will be sold by the
selling stockholders. Such selling stockholders may sell their shares of our common stock from
time to time at market prices prevailing at the time of sale, at prices related to the prevailing
market price, or at negotiated prices. We will not receive any of the proceeds from the
</DIV>
</DIV>



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<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">disposition of these shares by the selling stockholders, other than as a result of the exercise of
warrants held by the selling stockholders for cash.
</DIV>

</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investing in our common stock involves a high degree of risk. You should carefully consider
the risks described below, together with all of the other information included in this prospectus
and the documents incorporated by reference, before deciding whether to invest in shares of our
common stock. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial also may impair our business operations. The occurrence of any of the following
risks could harm our business, financial condition or results of operations. In such case, the
trading price of our common stock could decline, and you may lose all or part of your investment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Relating to Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have a history of net losses. We expect to continue to incur substantial and increasing net
losses for the foreseeable future, and we may never achieve or maintain profitability.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are not profitable and have incurred significant net losses in each year since our inception,
including net losses of $23.9&nbsp;million, $77.0&nbsp;million, $55.9&nbsp;million, and $43.5&nbsp;million for the six
months ended June&nbsp;30, 2009, and the years ended December&nbsp;31, 2008, 2007 and 2006, respectively. As
of June&nbsp;30, 2009, we had a deficit accumulated during development stage of $234.0&nbsp;million. We
expect our expenses to decrease in 2009 compared to 2008 levels as a result of our reduction in
force, which we effected in January&nbsp;2009 and as we expect lower clinical expenses with respect to
our lead development program in the second half of 2009; however, we expect to incur substantial
net losses and negative cash flow for the foreseeable future. These losses and negative cash flows
have had, and will continue to have, an adverse effect on our stockholders&#146; equity (deficit)&nbsp;and
working capital.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because of the numerous risks and uncertainties associated with pharmaceutical product development
and commercialization, we are unable to accurately predict the timing or amount of future expenses
or when, or if, we will be able to achieve or maintain profitability. Currently, we have no
products approved for commercial sale, and to date we have not generated any product revenue. We
have financed our operations primarily through the sale of equity securities, capital lease and
equipment financing and government grants. The size of our future net losses will depend, in part,
on the rate of growth of our expenses and the level and rate of growth, if any, of our revenues.
Revenues from strategic partnerships are uncertain because we may not enter into any additional
strategic partnerships. We began to recognize revenues from our partnership with Endo in the third
quarter of 2008, and we recognized approximately $9.5&nbsp;million in revenue in the three months ended
March&nbsp;31, 2009 as a result of termination of the Endo license agreement in January&nbsp;2009. If we are
unable to develop and commercialize one or more of our product candidates or if sales revenue from
any other product candidate that receives marketing approval is insufficient, we will not achieve
profitability. Even if we do achieve profitability, we may not be able to sustain or increase
profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are a development stage company. Our success depends substantially on our lead product
candidates. If we do not develop commercially successful products, we may be forced to cease
operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You must evaluate us in light of the uncertainties and complexities affecting a development stage
pharmaceutical company. We have not completed clinical development for any of our product
candidates. Our lead product candidate is in late-stage Phase 3 development, with an NDA projected
for the first quarter of 2010, and each of our other product candidates is at an earlier stage of
development. Each of our product candidates will be unsuccessful if it:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>does not demonstrate acceptable safety and efficacy in preclinical studies and clinical
trials or otherwise does not meet applicable regulatory standards for approval;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>does not offer therapeutic or other improvements over existing or future drugs used to
treat the same or similar conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is not capable of being produced in commercial quantities at an acceptable cost, or at
all; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is not accepted by patients, the medical community or third party payors.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to generate product revenue in the future is dependent on the successful development
and commercialization
of our
product candidates. We have not proven our ability to develop and
commercialize
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->4.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> products. Problems frequently encountered in connection with the development and
utilization of new and unproven technologies and the competitive environment in which we operate
might limit our ability to develop commercially successful products. We do not expect any of our
current product candidates to be commercially available before 2011, if at all. If we are unable to
make our product candidates commercially available, we will not generate product revenues, and we
will not be successful.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We will need substantial additional capital in the future. If additional capital is not available,
we will have to delay, reduce or cease operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will need to raise additional capital to fund our operations, to develop our product candidates
and to develop our manufacturing capabilities. Our future capital requirements will be substantial
and will depend on many factors including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the scope, rate of progress, results and costs of our preclinical studies, clinical
trials and other research and development activities, and our manufacturing development and
commercial manufacturing activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to draw on our equity line of credit with Azimuth Opportunity, Ltd.
(&#147;Azimuth&#148;);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost, timing and outcomes of regulatory proceedings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost and timing of developing sales and marketing capabilities prior to receipt of
any regulatory approval of our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost and timing of developing manufacturing capacity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>revenues received from any future products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>payments received under any future strategic partnerships;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the filing, prosecution and enforcement of patent claims; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the costs associated with commercializing our product candidates, if they receive
regulatory approval.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that with current cash, cash equivalents and marketable securities along with interest
earned thereon, the proceeds from option exercises, and purchases of common stock pursuant to our
Employee Stock Purchase Plan, we will be able to maintain our currently planned operations through
the first quarter of 2010. Changing circumstances may cause us to consume capital significantly
faster or slower than we currently anticipate. We have based these estimates on assumptions that
may prove to be wrong, and we could utilize our available financial resources sooner than we
currently expect. The key assumptions underlying these estimates include:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expenditures related to continued preclinical and clinical development of our lead
product candidates during this period within budgeted levels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no unexpected costs related to the development of our manufacturing capability; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no growth in the number of our employees during this period.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We may never be able to generate a sufficient amount of product revenue to cover our expenses.
Until we do, we expect to finance our future cash needs through public or private equity offerings,
debt financings, strategic partnerships or licensing arrangements, as well as interest income
earned on cash and marketable securities balances and proceeds from stock option exercises and
purchases under our Employee Stock Purchase Plan. Any
financing transaction may contain unfavorable terms. As a result of the late filing of a current
report on Form 8-K, we are currently ineligible to use Form S-3 to register
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->5.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> securities for sale by
us or for resale by other security holders until we have timely filed all required reports under
the Securities Exchange Act of 1934 for at least 12 calendar months (at the earliest April&nbsp;2010).
In the meantime, for capital raising transactions, we must use Form S-1 to register securities with
the SEC, or issue such securities in a private placement, which could increase the costs and
adversely impact our ability to raise capital in a timely manner during this period. By raising
additional funds by issuing equity securities, our stockholders&#146; equity is diluted. If we raise
additional funds through strategic partnerships, we may be required to relinquish rights to our
product candidates or technologies, or to grant licenses on terms that are not favorable to us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Unstable market conditions may have serious adverse consequences on our business.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The recent economic downturn and market instability has made the business climate more volatile and
more costly. Our general business strategy may be adversely affected by unpredictable and unstable
market conditions. If the current equity and credit markets deteriorate further, or do not improve,
it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.
While we believe we have adequate capital resources to meet current working capital and capital
expenditure requirements through the first quarter of 2010, we may obtain additional financing on
less than attractive rates or on terms that are excessively dilutive to existing stockholders.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a
material adverse effect on our growth strategy, financial performance and stock price and could
require us to delay or abandon clinical development plans. There is a risk that one or more of our
current service providers, manufacturers and other partners may encounter difficulties during
challenging economic times, which would directly affect our ability to attain our operating goals
on schedule and on budget.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Unless our preclinical studies demonstrate the safety of our product candidates, we will not be
able to commercialize our product candidates.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To obtain regulatory approval to market and sell any of our product candidates, we must satisfy the
FDA and other regulatory authorities abroad, through extensive preclinical studies, that our
product candidates are safe. Our <I>Staccato </I>system creates condensation aerosol from drug compounds,
and there currently are no approved products that use a similar method of drug delivery. Companies
developing other inhalation products have not defined or successfully completed the types of
preclinical studies we believe will be required for submission to regulatory authorities as we seek
approval to conduct our clinical trials. We may not conduct the types of preclinical testing
eventually required by regulatory authorities, or the preclinical tests may indicate that our
product candidates are not safe for use in humans. Preclinical testing is expensive, can take many
years and have an uncertain outcome. In addition, success in initial preclinical testing does not
ensure that later preclinical testing will be successful. We may experience numerous unforeseen
events during, or as a result of, the preclinical testing process, which could delay or prevent our
ability to develop or commercialize our product candidates, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our preclinical testing may produce inconclusive or negative safety results, which may
require us to conduct additional preclinical testing or to abandon product candidates that
we believed to be promising;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our product candidates may have unfavorable pharmacology, toxicology or
carcinogenicity; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our product candidates may cause undesirable side effects.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any such events would increase our costs and could delay or prevent our ability to commercialize
our product candidates, which could adversely impact our business, financial condition and results
of operations.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Preclinical studies indicated possible adverse impact of pulmonary delivery of AZ-001.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our daily dosing animal toxicology studies of prochlorperazine, the active pharmaceutical
ingredient, or API, in AZ-001, we detected changes to, and increases of, the cells in the upper
airway of the test animals. The terms for these changes and increases are &#147;squamous metaplasia&#148; and
&#147;hyperplasia,&#148; respectively. We also observed lung inflammation in some animals. These findings
occurred in daily dosing studies at doses that were proportionately substantially greater than any
dose we expect to continue to develop or commercialize. In subsequent toxicology studies of AZ-001
involving intermittent dosing consistent with its intended use, we detected lower incidence and
severity of the changes to, and increases of, the cells in the upper airway of the test animals
compared to the daily dosing results. We did not observe any lung inflammation with intermittent
dosing. During the second quarter of 2008, we completed a 28-day repeat dose inhalation study in
dogs. Consistent with previous findings in shorter-term and higher dose studies, we observed
dose-related minimal to slight squamous metaplasia in the upper respiratory tract, primarily in the
lining of the nasal passages, in all treated groups. No lower respiratory tract or lung findings
were reported. These findings suggest that the delivery of the pure drug compound of AZ-001 at the
proportionately higher doses used in daily dosing toxicology studies may cause adverse consequences
if we were to administer prochlorperazine chronically for prolonged periods of time. If we observe
these findings in our clinical trials of AZ-001, it could prevent further development or
commercialization of AZ-001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Failure or delay in commencing or completing clinical trials for our product candidates could harm
our business.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To date, we have not completed all the clinical trials necessary to support an application with the
FDA for approval to market any of our product candidates. Current and planned clinical trials may
be delayed or terminated as a result of many factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays or failure in reaching agreement on acceptable clinical trial contracts or
clinical trial protocols with prospective sites;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>regulators or institutional review boards may not authorize us to commence a clinical
trial;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>regulators or institutional review boards may suspend or terminate clinical research
for various reasons, including noncompliance with regulatory requirements or concerns about
patient safety;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may suspend or terminate our clinical trials if we believe that they expose the
participating patients to unacceptable health risks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may experience slower than expected patient enrollment or lack of a sufficient
number of patients that meet the enrollment criteria for our clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>patients may not complete clinical trials due to safety issues, side effects,
dissatisfaction with the product candidate, or other reasons;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may have difficulty in maintaining contact with patients after treatment, preventing
us from collecting the data required by our study protocol;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>product candidates may demonstrate a lack of efficacy during clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may experience governmental or regulatory delays, failure to obtain regulatory
approval or changes in regulatory requirements, policy and guidelines; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may experience delays in our ability to manufacture clinical trial materials in a
timely manner as a result of ongoing process and design enhancements to our <I>Staccato</I>
system.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any delay in commencing or completing clinical trials for our product candidates would delay
commercialization of our product candidates and harm our business, financial condition and results
of operations. It is possible that none
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> of our product candidates will successfully complete
clinical trials or receive regulatory approval, which would severely harm our business, financial
condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Continuing development of our single dose version device may delay regulatory submissions and
marketing approval for AZ-004</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our clinical studies to date for our AZ-004, AZ-001, AZ-104, AZ-002 and AZ-007 product candidates
have been completed using a version of our single dose <I>Staccato </I>device we refer to as the chemical
single dose, or CSD, device. We are developing a version of the CSD that is intended to cost less
to manufacture and is more scalable than the current version of CSD. We refer to the newer version
of this single dose device as the commercial production device, or CPD, version. The CPD
incorporates the same basic chemical heat package and electronics as the CSD. We have conducted a
bioequivalence study in normal volunteers using the CSD and the CPD versions of the device to
determine if the drug dose dispensed by the two devices is bioequivalent. The FDA is reviewing the
results of this study. If the FDA determines that the results of the bioequivalence study and the
available analytical data do not support the bioequivalency, or if the FDA or foreign regulatory
authorities determine the CPD is unacceptable for any other reason, we may be required to conduct
additional clinical research for AZ-004 with the CPD version of the device. Conducting an
additional Phase 3 clinical trial could delay the filing of an NDA, which could also delay any
potential marketing approval in the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If our product candidates do not meet safety and efficacy endpoints in clinical trials, they will
not receive regulatory approval, and we will be unable to market them.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our product candidates are in preclinical and clinical development and have not received regulatory
approval from the FDA or any foreign regulatory authority. The clinical development and regulatory
approval process is extremely expensive and takes many years. The timing of any approval cannot be
accurately predicted. If we fail to obtain regulatory approval for our current or future product
candidates, we will be unable to market and sell them and therefore we may never be profitable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of the regulatory process, we must conduct clinical trials for each product candidate to
demonstrate safety and efficacy to the satisfaction of the FDA and other regulatory authorities
abroad. The number and design of clinical trials that will be required varies depending on the
product candidate, the condition being evaluated, the trial results and regulations applicable to
any particular product candidate. In June&nbsp;2008, we announced that our Phase 2a proof-of-concept
clinical trial of AZ-002 (<I>Staccato </I>Alprazolam) did not meet either of its two primary endpoints.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Prior clinical trial program designs and results are not necessarily predictive of future clinical
trial designs or results. Initial results may not be confirmed upon full analysis of the detailed
results of a trial. Product candidates in later stage clinical trials may fail to show the desired
safety and efficacy despite having progressed through initial clinical trials with acceptable
endpoints.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If our product candidates fail to show a clinically significant benefit compared to placebo, they
will not be approved for marketing.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Device failure rates higher than we anticipate may result in clinical trials that do not meet their
specific efficacy endpoints. Device failures or improper device use by patients may impact the
results of future trials. The design of our clinical trials is based on many assumptions about the
expected effect of our product candidates, and if those assumptions prove incorrect, the clinical
trials may not produce statistically significant results. Our <I>Staccato </I>system is not similar to
other approved drug delivery methods, there is no clear precedent for the application of detailed
regulatory requirements to our product candidates. We cannot assure you that the design of, or data
collected from, the clinical trials of our product candidates will be sufficient to support the FDA
and foreign regulatory approvals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Regulatory authorities may not approve our product candidates even if they meet safety and efficacy
endpoints in clinical trials.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The FDA and other foreign regulatory agencies can delay, limit or deny marketing approval for many
reasons, including:
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a product candidate may not be considered safe or effective;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the manufacturing processes or facilities we have selected may not meet the applicable
requirements; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in their approval policies or adoption of new regulations may require
additional work on our part.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any delay in, or failure to receive or maintain, approval for any of our product candidates could
prevent us from ever generating meaningful revenues or achieving profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our product candidates may not be approved even if they achieve their endpoints in clinical trials.
Regulatory agencies, including the FDA, or their advisors may disagree with our trial design and
our interpretations of data from preclinical studies and clinical trials. Regulatory agencies may
change requirements for approval even after a clinical trial design has been approved. Regulatory
agencies also may approve a product candidate for fewer or more limited indications than requested
or may grant approval subject to the performance of post-marketing studies. In addition, regulatory
agencies may not approve the labeling claims that are necessary or desirable for the successful
commercialization of our product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our product candidates will remain subject to ongoing regulatory review even if they receive
marketing approval. If we fail to comply with continuing regulations, we could lose these
approvals, and the sale of any future products could be suspended.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Even if we receive regulatory approval to market a particular product candidate, the FDA or a
foreign regulatory authority could condition approval on conducting additional costly post-approval
studies or could limit the scope of our approved labeling. Moreover, the product may later cause
adverse effects that limit or prevent its widespread use, force us to withdraw it from the market
or impede or delay our ability to obtain regulatory approvals in additional countries. In addition,
we will continue to be subject to FDA review and periodic inspections to ensure adherence to
applicable regulations. After receiving marketing approval, the FDA imposes extensive regulatory
requirements on the manufacturing, labeling, packaging, adverse event reporting, storage,
advertising, promotion and record keeping related to the product.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and
foreign regulatory authorities or previously unknown problems with any future products, suppliers
or manufacturing processes are discovered, we could be subject to administrative or judicially
imposed sanctions, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>restrictions on the products, suppliers or manufacturing processes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>warning letters or untitled letters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>civil or criminal penalties or fines;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>injunctions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>product seizures, detentions or import bans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>voluntary or mandatory product recalls and publicity requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>suspension or withdrawal of regulatory approvals;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>total or partial suspension of production; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>refusal to approve pending applications for marketing approval of new drugs or
supplements to approved applications.</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we do not produce our devices cost effectively, we will never be profitable.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our <I>Staccato </I>system based product candidates contain electronic and other components in addition to
the active pharmaceutical ingredients. As a result of the cost of developing and producing these
components, the cost to produce our product candidates, and any approved products, will likely be
higher per dose than the cost to produce intravenous or oral tablet products. This increased cost
of goods may prevent us from ever selling any products at a profit. In addition, we are developing
single dose and multiple dose versions of our <I>Staccato </I>system. Developing multiple versions of our
<I>Staccato </I>system may reduce or eliminate our ability to achieve manufacturing economies of scale. In
addition, developing multiple versions of our <I>Staccato </I>system reduces our ability to focus
development resources on each version, potentially reducing our ability to effectively develop any
particular version. We expect to continue to modify each of our product candidates throughout their
clinical development to improve their performance, dependability, manufacturability and quality.
Some of these modifications may require additional regulatory review and approval, which may delay
or prevent us from conducting clinical trials. The development and production of our technology
entail a number of technical challenges, including achieving adequate dependability, that may be
expensive or time consuming to solve. Any delay in or failure to develop and manufacture any future
products in a cost effective way could prevent us from generating any meaningful revenues and
prevent us from becoming profitable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We rely on third parties to conduct our preclinical studies and our clinical trials. If these third
parties do not perform as contractually required or expected, we may not be able to obtain
regulatory approval for our product candidates, or we may be delayed in doing so.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We do not have the ability to conduct preclinical studies or clinical trials independently for our
product candidates. We must rely on third parties, such as contract research organizations, medical
institutions, academic institutions, clinical investigators and contract laboratories, to conduct
our preclinical studies and clinical trials. We are responsible for confirming that our preclinical
studies are conducted in accordance with applicable regulations and that each of our clinical
trials is conducted in accordance with its general investigational plan and protocol. The FDA
requires us to comply with regulations and standards, commonly referred to as good laboratory
practices, or GLP, for conducting and recording the results of our preclinical studies and good
clinical practices for conducting, monitoring, recording and reporting the results of clinical
trials, to assure that data and reported results are accurate and that the clinical trial
participants are adequately protected. Our reliance on third parties does not relieve us of these
responsibilities. If the third parties conducting our clinical trials do not perform their
contractual duties or obligations, do not meet expected deadlines, fail to comply with the FDA&#146;s
good clinical practice regulations, do not adhere to our clinical trial protocols or otherwise fail
to generate reliable clinical data, we may need to enter into new arrangements with alternative
third parties and our clinical trials may be extended, delayed or terminated or may need to be
repeated, and we may not be able to obtain regulatory approval for or commercialize the product
candidate being tested in such trials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Problems with the third parties that manufacture the active pharmaceutical ingredients in our
product candidates may delay our clinical trials or subject us to liability.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We do not currently own or operate manufacturing facilities for clinical or commercial production
of the API used in any of our product candidates. We have no experience in drug manufacturing, and
we lack the resources and the capability to manufacture any of the APIs used in our product
candidates, on either a clinical or commercial scale. As a result, we rely on third parties to
supply the API used in each of our product candidates. We expect to continue to depend on third
parties to supply the API for our lead product candidates and any additional product candidates we
develop in the foreseeable future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An API manufacturer must meet high precision and quality standards for that API to meet regulatory
specifications and comply with regulatory requirements. A contract manufacturer is subject to
ongoing periodic unannounced inspection by the FDA and corresponding state and foreign authorities
to ensure strict compliance with current good manufacturing practice, or cGMP, and other applicable
government regulations and corresponding foreign standards. Additionally, a contract manufacturer
must pass a pre-approval inspection by the FDA to ensure strict compliance with cGMP prior to the
FDA&#146;s approval of any product candidate for marketing. A contract manufacturer&#146;s failure to conform
with cGMP could result in the FDA&#146;s refusal to approve or a delay in the FDA&#146;s
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">approval of a
product candidate for marketing. We are ultimately responsible for confirming that the APIs used in
our product candidates are manufactured in accordance with applicable regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our third party suppliers may not carry out their contractual obligations or meet our deadlines. In
addition, the API they supply to us may not meet our specifications and quality policies and
procedures. If we need to find alternative suppliers of the API used in any of our product
candidates, we may not be able to contract for such supplies on acceptable terms, if at all. Any
such failure to supply or delay caused by such contract manufacturers would have an adverse effect
on our ability to continue clinical development of our product candidates or commercialize any
future products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If our third party drug suppliers fail to achieve and maintain high manufacturing standards in
compliance with cGMP regulations, we could be subject to certain product liability claims in the
event such failure to comply resulted in defective products that caused injury or harm.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we experience problems with the manufacturers of components of our product candidates, our
development programs may be delayed or we may be subject to liability.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We outsource the manufacturing of some of the components of our <I>Staccato </I>system, including the
printed circuit boards and the plastic airways, and we will outsource the manufacturing of the
chemical heat packages to be used in our commercial single dose device. We have no experience in
the manufacturing of components (other than our current chemical heat packages), and we currently
lack the resources and the capability to manufacture them, on either a clinical or commercial
scale. As a result, we rely on third parties to supply these components. We expect to continue to
depend on third parties to supply these components for our current product candidates and any
devices based on the Staccato system we develop in the foreseeable future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The third party suppliers of the components of our Staccato system must meet high precision and
quality standards for those components to comply with regulatory requirements. A contract
manufacturer is subject to ongoing periodic unannounced inspection by the FDA and corresponding
state and foreign authorities to ensure strict compliance with the FDA&#146;s Quality System Regulation,
or QSR, which sets forth the FDA&#146;s current good manufacturing practice requirements for medical
devices and their components, and other applicable government regulations and corresponding foreign
standards. We are ultimately responsible for confirming that the components used in the Staccato
system are manufactured in accordance with the QSR or other applicable regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our third party suppliers may not comply with their contractual obligations or meet our deadlines,
or the components they supply to us may not meet our specifications and quality policies and
procedures. If we need to find alternative suppliers of the components used in the <I>Staccato </I>system,
we may not be able to contract for such components on acceptable terms, if at all. Any such failure
to supply or delay caused by such contract manufacturers would have an adverse affect on our
ability to continue clinical development of our product candidates or commercialize any future
products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the heat packages used in the single dose version of our <I>Staccato </I>system are
manufactured using certain energetic, or highly combustible, materials that are used to generate
the rapid heating necessary for vaporizing the drug compound while avoiding degradation.
Manufacture of products containing these types of materials is regulated by the U.S. government. We
currently manufacture the heat packages that are being used in the devices used in our clinical
trials. We have entered into a supply agreement with Autoliv for the manufacture of the heat
packages in the commercial design of our single dose version of our <I>Staccato </I>system. If we are
unable to
manufacture the heat packages used in our ongoing clinical trials or if in the future Autoliv is
unable to manufacture the heat packages to our specifications, or does not carry out its
contractual obligations to supply our heat packages to us, our clinical trials may be delayed,
suspended or terminated while we seek additional suitable manufacturers of our heat packages, which
may prevent us from commercializing our product candidates that utilize the single dose version of
the <I>Staccato </I>system.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we do not establish additional strategic partnerships, we will have to undertake development and
commercialization efforts on our own, which would be costly and delay our ability to commercialize
any future products.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A key element of our business strategy is our intent to selectively partner with pharmaceutical,
biotechnology and other companies to obtain assistance for the development and potential
commercialization of our product candidates. In December&nbsp;2006, we entered into such a development
relationship with Symphony Allegro, Inc. (&#147;Symphony Allegro&#148;), and in December&nbsp;2007 we entered into
a strategic relationship with Endo Pharmaceuticals, Inc. for the development of AZ-003. In January
2009, we mutually agreed with Endo to terminate our agreement. In June&nbsp;2009, we amended the terms
of our arrangement with Symphony Allegro, resulting in our acquisition of Symphony Allegro and the
termination of that arrangement in August&nbsp;2009. We intend to enter into additional strategic
partnerships with third parties to develop and commercialize our product candidates that are
intended for larger markets, and we may enter into strategic partnerships for product candidates
that are targeted toward specialty markets. To date, other than Symphony Allegro and Endo, we have
not entered into any strategic partnerships for any of our product candidates. We face significant
competition in seeking appropriate strategic partners, and these strategic partnerships can be
intricate and time consuming to negotiate and document. We may not be able to negotiate strategic
partnerships on acceptable terms, or at all. We are unable to predict when, if ever, we will enter
into any additional strategic partnerships because of the numerous risks and uncertainties
associated with establishing strategic partnerships. If we are unable to negotiate additional
strategic partnerships for our product candidates we may be forced to curtail the development of a
particular candidate, reduce or delay its development program or one or more of our other
development programs, delay its potential commercialization, reduce the scope of our sales or
marketing activities or undertake development or commercialization activities at our own expense.
In addition, we will bear all the risk related to the development of that product candidate. If we
elect to increase our expenditures to fund development or commercialization activities on our own,
we may need to obtain additional capital, which may not be available to us on acceptable terms, or
at all. If we do not have sufficient funds, we will not be able to bring our product candidates to
market and generate product revenue.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we enter into additional strategic partnerships, we may be required to relinquish important
rights to and control over the development of our product candidates or otherwise be subject to
terms unfavorable to us.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For any strategic partnerships with pharmaceutical or biotechnology companies we will be subject to
a number of risks, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may not be able to control the amount and timing of resources that our strategic
partners devote to the development or commercialization of product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners may delay clinical trials, provide insufficient funding, terminate a
clinical trial or abandon a product candidate, repeat or conduct new clinical trials or
require a new version of a product candidate for clinical testing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners may not pursue further development and commercialization of products
resulting from the strategic partnering arrangement or may elect to discontinue research
and development programs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners may not commit adequate resources to the marketing and distribution
of any future products, limiting our potential revenues from these products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disputes may arise between us and our strategic partners that result in the delay or
termination of the research, development or commercialization of our product candidates or
that result in costly litigation or arbitration that diverts management&#146;s attention and
consumes resources;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners may experience financial difficulties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners may not properly maintain or defend our intellectual property rights
or may use our proprietary information in a manner that could jeopardize or invalidate our
proprietary information or expose us to potential litigation;</TD>
</TR>


</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>business combinations or significant changes in a strategic partner&#146;s business strategy
may also adversely affect a strategic partner&#146;s willingness or ability to complete its
obligations under any arrangement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners could independently move forward with a competing product candidate
developed either independently or in collaboration with others, including our competitors;
and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>strategic partners could terminate the arrangement or allow it to expire, which would
delay the development and may increase the cost of developing our product candidates.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we fail to gain market acceptance among physicians, patients, third-party payors and the medical
community, we will not become profitable.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Staccato </I>system is a fundamentally new method of drug delivery. Any future product based on our
<I>Staccato </I>system may not gain market acceptance among physicians, patients, third-party payors and
the medical community. If these products do not achieve an adequate level of acceptance, we will
not generate sufficient product revenues to become profitable. The degree of market acceptance of
any of our product candidates, if approved for commercial sale, will depend on a number of factors,
including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>demonstration of efficacy and safety in clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the existence, prevalence and severity of any side effects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>potential or perceived advantages or disadvantages compared to alternative treatments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>perceptions about the relationship or similarity between our product candidates and the
parent drug compound upon which each product candidate is based;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of market entry relative to competitive treatments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to offer any future products for sale at competitive prices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>relative convenience, product dependability and ease of administration;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the strength of marketing and distribution support;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the sufficiency of coverage and reimbursement of our product candidates by governmental
and other third-party payors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the product labeling or product insert required by the FDA or regulatory authorities in
other countries.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our pipeline may be limited by the number of drug compounds suitable for use with the Staccato
system.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The current versions of the <I>Staccato </I>system cannot deliver large molecule drugs, such as peptides
and proteins. In addition, the physical size of the metal substrates in the single dose and
multiple dose versions of the <I>Staccato </I>system limits their use to drugs that require dose amounts
less than 10 to 15 milligrams and 100 to 200 micrograms, respectively. Further, approximately 200
of the 400 small molecule compounds we have screened for initial vaporization feasibility did not
form drug aerosols with the 97% purity we use as an internal standard for further development.
There are also many drug compounds that are covered by composition of matter patents that prevent
us from developing the compound in the <I>Staccato </I>system without a license from the patent owner,
which
may not be available on acceptable terms, if at all. If we are not able to identify additional drug
compounds that can be developed with the <I>Staccato </I>system, we may not develop enough products to
develop a sustainable business.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>AZ-001 and other product candidates that we may develop may require expensive carcinogenicity
tests.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The API in AZ-001, prochlorperazine, was approved by the FDA in 1956 for the treatment of severe
nausea and vomiting. At that time, the FDA did not require the carcinogenicity testing that is now
generally required for marketing approval. It is unclear whether we will be required to perform
such testing prior to filing our application for marketing approval of AZ-001 or whether we will be
allowed to perform such testing after we file an application. Such carcinogenicity testing will be
expensive and require significant additional resources to complete and may delay approval to market
AZ-001. We may encounter similar requirements with other product candidates incorporating drugs
that have not undergone carcinogenicity testing. Any carcinogenicity testing we are required to
complete will increase the costs to develop a particular product candidate and may delay or halt
the development of such product candidate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If some or all of our patents expire, are invalidated or are unenforceable, or if some or all of
our patent applications do not yield issued patents or yield patents with narrow claims,
competitors may develop competing products using our or similar intellectual property and our
business will suffer.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our success will depend in part on our ability to obtain and maintain patent and trade secret
protection for our technologies and product candidates both in the United States and other
countries. We do not know whether any patents will issue from any of our pending or future patent
applications. In addition, a third party may successfully circumvent our patents. Our rights under
any issued patents may not provide us with sufficient protection against competitive products or
otherwise cover commercially valuable products or processes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The degree of protection for our proprietary technologies and product candidates is uncertain
because legal means afford only limited protection and may not adequately protect our rights or
permit us to gain or keep our competitive advantage. For example:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we might not have been the first to make the inventions covered by each of our pending
patent applications and issued patents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we might not have been the first to file patent applications for these inventions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>others may independently develop similar or alternative technologies or duplicate any
of our technologies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it is possible that none of our pending patent applications will result in issued
patents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the claims of our issued patents may be narrower than as filed and not sufficiently
broad to prevent third parties from circumventing them;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may not develop additional proprietary technologies or drug candidates that are
patentable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our patent applications or patents may be subject to interference, opposition or
similar administrative proceedings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any patents issued to us or our potential strategic partners may not provide a basis
for commercially viable products or may be challenged by third parties in the course of
litigation or administrative proceedings such as reexaminations or interferences; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the patents of others may have an adverse effect on our ability to do business.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Even if valid and enforceable patents cover our product candidates and technologies, the patents
will provide protection only for a limited amount of time.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our and our potential strategic partners&#146; ability to obtain patents is uncertain because, to date,
some legal principles remain unresolved, there has not been a consistent policy regarding the
breadth or interpretation of claims allowed in patents in the United States, and the specific
content of patents and patent applications that are necessary to
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> support and interpret patent
claims is highly uncertain due to the complex nature of the relevant legal, scientific and factual
issues. Furthermore, the policies governing pharmaceutical and medical device patents outside the
United States may be even more uncertain. Changes in either patent laws or interpretations of
patent laws in the United States and other countries may diminish the value of our intellectual
property or narrow the scope of our patent protection.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Even if patents are issued regarding our product candidates or methods of using them, those patents
can be challenged by our competitors who can argue that our patents are invalid and/or
unenforceable. Third parties may challenge our rights to, or the scope or validity of, our patents.
Patents also may not protect our product candidates if competitors devise ways of making these or
similar product candidates without legally infringing our patents. The Federal Food, Drug and
Cosmetic Act and the FDA regulations and policies provide incentives to manufacturers to challenge
patent validity or create modified, non-infringing versions of a drug or device in order to
facilitate the approval of generic substitutes. These same types of incentives encourage
manufacturers to submit new drug applications that rely on literature and clinical data not
prepared for or by the drug sponsor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also rely on trade secrets to protect our technology, especially where we do not believe that
patent protection is appropriate or obtainable. However, trade secrets are difficult to protect.
The employees, consultants, contractors, outside scientific collaborators and other advisors of our
company and our strategic partners may unintentionally or willfully disclose our confidential
information to competitors. Enforcing a claim that a third party illegally obtained and is using
our trade secrets is expensive and time consuming and the outcome is unpredictable. Failure to
protect or maintain trade secret protection could adversely affect our competitive business
position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our research and development collaborators may have rights to publish data and other information in
which we have rights. In addition, we sometimes engage individuals or entities to conduct research
that may be relevant to our business. The ability of these individuals or entities to publish or
otherwise publicly disclose data and other information generated during the course of their
research is subject to certain contractual limitations. These contractual provisions may be
insufficient or inadequate to protect our trade secrets and may impair our patent rights. If we do
not apply for patent protection prior to such publication or if we cannot otherwise maintain the
confidentiality of our technology and other confidential information, then our ability to receive
patent protection or protect our proprietary information may be jeopardized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Litigation or other proceedings or third party claims of intellectual property infringement could
require us to spend time and money and could shut down some of our operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our commercial success depends in part on not infringing patents and proprietary rights of third
parties. Others have filed, and in the future are likely to file, patent applications covering
products that are similar to our product candidates, as well as methods of making or using similar
or identical products. If these patent applications result in issued patents and we wish to use the
claimed technology, we would need to obtain a license from the third party. We may not be able to
obtain these licenses at a reasonable cost, if at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, administrative proceedings, such as interferences and reexaminations before the U.S.
Patent and Trademark Office, could limit the scope of our patent rights. We may incur substantial
costs and diversion of management and technical personnel as a result of our involvement in such
proceedings. In particular, our patents and patent applications may be subject to interferences in
which the priority of invention may be awarded to a third party. We do not know whether our patents
and patent applications would be entitled to priority over patents or patent applications held by
such a third party. Our issued patents may also be subject to reexamination proceedings. We do not
know whether our patents would survive reexamination in light of new questions of patentability
that may be raised following their issuance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Third parties may assert that we are employing their proprietary technology or their proprietary
products without authorization. In addition, third parties may already have or may obtain patents
in the future and claim that use of our technologies or our products infringes these patents. We
could incur substantial costs and diversion of management and technical personnel in defending our
self against any of these claims. Furthermore, parties making claims against us may be able to
obtain injunctive or other equitable relief, which could effectively block our ability to further
develop, commercialize and sell any future products and could result in the award of substantial
damages
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">against us. In the event of a successful claim of infringement against us, we may be
required to pay damages and obtain one or more licenses from third parties. We may not be able to
obtain these licenses at a reasonable cost, if at all. In that event, we could encounter delays in
product introductions while we attempt to develop alternative methods or products. In the event we
cannot develop alternative methods or products, we may be effectively blocked from developing,
commercializing or selling any future products. Defense of any lawsuit or failure to obtain any of
these licenses would be expensive and could prevent us from commercializing any future products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We review from time to time publicly available information concerning the technological development
efforts of other companies in our industry. If we determine that these efforts violate our
intellectual property or other rights, we intend to take appropriate action, which could include
litigation. Any action we take could result in substantial costs and diversion of management and
technical personnel in enforcing our patents or other intellectual property rights against others.
Furthermore, the outcome of any action we take to protect our rights may not be resolved in our
favor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Competition in the pharmaceutical industry is intense. If our competitors are able to develop and
market products that are more effective, safer or less costly than any future products that we may
develop, our commercial opportunity will be reduced or eliminated.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We face competition from established as well as emerging pharmaceutical and biotechnology
companies, as well as from academic institutions, government agencies and private and public
research institutions. Our commercial opportunity will be reduced or eliminated if our competitors
develop and commercialize products that are safer, more effective, have fewer side effects or are
less expensive than any future products that we may develop and commercialize. In addition,
significant delays in the development of our product candidates could allow our competitors to
bring products to market before us and impair our ability to commercialize our product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that, if approved, AZ-004 would compete with the available intramuscular, or IM,
injectable form and oral forms of loxapine and other forms of available antipsychotic drugs for the
treatment of agitation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that, if approved, AZ-001 and AZ-104 would compete with currently marketed triptan
drugs and with other migraine headache treatments, including intravenous, or IV, delivery of
prochlorperazine, the API in AZ-001. In addition, we are aware of at least 15 product candidates in
development for the treatment of migraines, including triptan products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that, if approved, AZ-003 would compete with some of the available forms of fentanyl,
including injectable fentanyl, oral transmucosal fentanyl formulations and ionophoretic transdermal
delivery of fentanyl. We are also aware of three fentanyl products under review by regulatory
agencies either in the United States or abroad, and at least 19 products in Phase 3 clinical trial
development for acute pain, seven of which are fentanyl products. There are two inhaled forms of
fentanyl products that are in Phase 2 development. In addition, if approved, AZ-003 would compete
with various generic opioid drugs, such as oxycodone, hydrocodone and morphine, or combination
products including one or more of such drugs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that, if approved, AZ-007 would compete with non-benzodiazepine GABA-A receptor
agonists, which include Ambien<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> (immediate release and controlled-release tablets),
Sonata<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, and Lunesta<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. We are also aware of more than 10 generic versions of
zolpidem (brand Ambien) oral tablets and one zaleplon (brand Sonata) that have been tentatively
approved by the FDA, as well as at least five insomnia products that are under review by the FDA.
Additionally, we are aware of three products in Phase 3 development for the treatment of insomnia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that, if approved, AZ-002 would compete with the oral tablet form of alprazolam and
possibly intravenous and oral forms of other benzodiazepines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Many of our competitors have significantly greater financial resources and expertise in research
and development, manufacturing, preclinical testing, conducting clinical trials, obtaining
regulatory approvals and marketing approved products than we do. Established pharmaceutical
companies may invest heavily to discover quickly and develop novel compounds or drug delivery
technology that could make our product candidates obsolete. Smaller or early stage companies may
also prove to be significant competitors, particularly through strategic partnerships with large
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and established companies. In addition, these third parties compete with us in recruiting and
retaining qualified scientific and management personnel, establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring technologies and technology
licenses complementary to our programs or advantageous to our business. Accordingly, our
competitors may succeed in obtaining patent protection, receiving FDA approval or discovering,
developing and commercializing products before we do. If we are not able to compete effectively
against our current and future competitors, our business will not grow and our financial condition
will suffer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we are unable to establish sales and marketing capabilities or enter into agreements with third
parties to market and sell our product candidates, we may be unable to generate significant product
revenue.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have conducted a comprehensive strategic marketing review and developed our initial launch
strategy for our lead product candidate, AZ-004. We do not have a sales organization and have no
experience in the sales and distribution of pharmaceutical products. There are risks involved with
establishing our own sales capabilities and increasing our marketing capabilities, as well as
entering into arrangements with third parties to perform these services. Developing an internal
sales force is expensive and time consuming and could delay any product launch. On the other hand,
if we enter into arrangements with third parties to perform sales, marketing and distribution
services, our product revenues or the profitability of these product revenues are likely to be
lower than if we market and sell any products that we develop ourselves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We may establish our own specialty sales force and/or engage pharmaceutical or other healthcare
companies with an existing sales and marketing organization and distribution systems to sell,
market and distribute any future products. We may not be able to establish a specialty sales force
or establish sales and distribution relationships on acceptable terms. Factors that may inhibit our
efforts to commercialize any future products without strategic partners or licensees include:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our inability to recruit and retain adequate numbers of effective sales and marketing
personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the inability of sales personnel to obtain access to or persuade adequate numbers of
physicians to prescribe any future products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the lack of complementary products to be offered by sales personnel, which may put us
at a competitive disadvantage relative to companies with more extensive product lines; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unforeseen costs and expenses associated with creating an independent sales and
marketing organization.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because the establishment of sales and marketing capabilities depends on the progress towards
commercialization of our product candidates and because of the numerous risks and uncertainties
involved with establishing our own sales and marketing capabilities, we are unable to predict when,
if ever, we will establish our own sales and marketing capabilities. If we are not able to partner
with a third party and are unsuccessful in recruiting sales and marketing personnel or in building
a sales and marketing infrastructure, we will have difficulty commercializing our product
candidates, which would adversely affect our business and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we lose our key personnel or are unable to attract and retain additional personnel, we may be
unable to develop or commercialize our product candidates.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are highly dependent on our President and Chief Executive Officer, Thomas B. King, the loss of
whose services might adversely impact the achievement of our objectives. In addition, recruiting
and retaining qualified clinical, scientific and engineering personnel to manage clinical trials of
our product candidates and to perform future research and development work will be critical to our
success. There is currently a shortage of skilled executives in our industry, which is likely to
continue. As a result, competition for skilled personnel is intense and the turnover rate can be
high. Although we believe we will be successful in attracting and retaining qualified personnel,
competition for experienced management and clinical, scientific and engineering personnel from
numerous companies and academic and other research institutions may limit our ability to do so on
acceptable terms. In addition, we do not have employment agreements with any of our employees, and
they could leave our employment at will. We have change of control agreements with our executive
officers and vice presidents that provide for
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> certain benefits upon termination or a change in role
or responsibility in connection with a change of control of our company. We do not maintain life
insurance policies on any employees. Failure to attract and retain personnel would prevent us from
developing and commercializing our product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If plaintiffs bring product liability lawsuits against us, we may incur substantial liabilities and
may be required to limit commercialization of the product candidates that we may develop.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We face an inherent risk of product liability as a result of the clinical testing of our product
candidates in clinical trials and will face an even greater risk if we commercialize any products.
We may be held liable if any product we develop causes injury or is found otherwise unsuitable
during product testing, manufacturing, marketing or sale. Regardless of merit or eventual outcome,
liability claims may result in decreased demand for any product candidates or products that we may
develop, injury to our reputation, withdrawal of clinical trials, costs to defend litigation,
substantial monetary awards to clinical trial participants or patients, loss of revenue and the
inability to commercialize any products that we develop. We have product liability insurance that
covers our clinical trials up to a $10&nbsp;million aggregate annual limit. We intend to expand product
liability insurance coverage to include the sale of commercial products if we obtain marketing
approval for any products that we may develop. However, this insurance may be prohibitively
expensive, or may not fully cover our potential liabilities. Inability to obtain sufficient
insurance coverage at an acceptable cost or otherwise to protect against potential product
liability claims could prevent or delay the commercialization of our product candidates. If we are
sued for any injury caused by any future products, our liability could exceed our total assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our product candidates AZ-002, AZ-003 and AZ-007 contain drug substances which are regulated by the
U.S. Drug Enforcement Administration. Failure to comply with applicable regulations could harm our
business.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Controlled Substances Act imposes various registration, recordkeeping and reporting
requirements, procurement and manufacturing quotas, labeling and packaging requirements, security
controls and a restriction on prescription refills on certain pharmaceutical products. A principal
factor in determining the particular requirements, if any, applicable to a product is its actual or
potential abuse profile. The U.S. Drug Enforcement Administration, or DEA, regulates chemical
compounds as Schedule&nbsp;I, II, III, IV or V substances, with Schedule&nbsp;I substances considered to
present the highest risk of substance abuse and Schedule&nbsp;V substances the lowest risk. Alprazolam,
the API in AZ-002, is regulated as a Schedule&nbsp;IV substance, fentanyl, the API in AZ-003, is
regulated as a Schedule&nbsp;II substance, and zaleplon, the API in AZ-007, is regulated as a Schedule
IV substance. Each of these product candidates is subject to DEA regulations relating to
manufacture, storage, distribution and physician prescription procedures, and the DEA regulates the
amount of the scheduled substance that would be available for clinical trials and commercial
distribution. As a Schedule&nbsp;II substance, fentanyl is subject to more stringent controls, including
quotas on the amount of product that can be manufactured as well as a prohibition on the refilling
of prescriptions without a new prescription from the physician. The DEA periodically inspects
facilities for compliance with its rules and regulations. Failure to comply with current and future
regulations of the DEA could lead to a variety of sanctions, including revocation, or denial of
renewal, or of DEA registrations, injunctions, or civil or criminal penalties and could harm our
business, financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The single dose version of our Staccato system contains materials that are regulated by the U.S.
government, and failure to comply with applicable regulations could harm our business.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The single dose version of our <I>Staccato </I>system uses energetic materials to generate the rapid
heating necessary for vaporizing the drug, while avoiding degradation. Manufacture of products
containing energetic materials is controlled by the U.S. Bureau of Alcohol, Tobacco, Firearms and
Explosives, or ATF. Technically, the energetic materials used in our <I>Staccato </I>system are classified
as &#147;low explosives,&#148; and the ATF has granted us a license/permit for the manufacture of such low
explosives. Additionally, due to inclusion of the energetic materials in our <I>Staccato </I>system, the
Department of Transportation, or DOT, regulates shipments of the single dose version of our
<I>Staccato </I>system. The DOT has granted the single dose version of our <I>Staccato </I>system &#147;Not Regulated
as an Explosive&#148; status. Failure to comply with the current and future regulations of the ATF or
DOT could subject us to future liabilities and could harm our business, financial condition and
results of operations. Furthermore, these regulations could restrict our ability to expand our
facilities or construct new facilities or could require us to incur other significant expenses in
order to maintain compliance.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We use hazardous chemicals and highly combustible materials in our business. Any claims relating to
improper handling, storage or disposal of these materials could be time consuming and costly.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our research and development processes involve the controlled use of hazardous materials, including
chemicals. We also use energetic materials in the manufacture of the chemical heat packages that
are used in our single dose devices. Our operations produce hazardous waste products. We cannot
eliminate the risk of accidental contamination or discharge or injury from these materials.
Federal, state and local laws and regulations govern the use, manufacture, storage, handling and
disposal of these materials. We could be subject to civil damages in the event of an improper or
unauthorized release of, or exposure of individuals to, hazardous materials. In addition, claimants
may sue us for injury or contamination that results from our use or the use by third parties of
these materials and our liability may exceed our total assets. We maintain insurance for the use of
hazardous materials in the aggregate amount of $1&nbsp;million, which may not be adequate to cover any
claims. Compliance with environmental and other laws and regulations may be expensive, and current
or future regulations may impair our research, development or production efforts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain of our suppliers are working with these types of hazardous and highly combustible materials
in connection with our component manufacturing agreements. In the event of a lawsuit or
investigation, we could be held responsible for any injury caused to persons or property by
exposure to, or release of, these hazardous and highly combustible materials. Further, under
certain circumstances, we have agreed to indemnify our suppliers against damages and other
liabilities arising out of development activities or products produced in connection with these
agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We will need to implement additional finance and accounting systems, procedures and controls in the
future as we grow and to satisfy new reporting requirements.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley
Act of 2002, or Sarbanes-Oxley, and rules enacted and proposed by the SEC and by the NASDAQ Global
Market, will result in increased costs to us as we continue to undertake efforts to comply with
rules and respond to the requirements applicable to public companies. The rules make it more
difficult and costly for us to obtain certain types of insurance, including director and officer
liability insurance, and we may be forced to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage as compared to the polices
previously available to public companies. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board of directors or our
board committees or as executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a public company, we need to comply with Sarbanes-Oxley and the related rules and regulations of
the SEC, including expanded disclosure, accelerated reporting requirements and more complex
accounting rules. Compliance with Section&nbsp;404 of Sarbanes-Oxley and other requirements will
continue to increase our costs and require additional management resources. We have been upgrading
our finance and accounting systems, procedures and controls and will need to continue to implement
additional finance and accounting systems, procedures and controls as we grow to satisfy new
reporting requirements. We currently do not have an internal
audit group. In addition, we may need to hire additional legal and accounting staff with
appropriate experience and technical knowledge, and we cannot assure you that if additional
staffing is necessary that we will be able to do so in a timely fashion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our facilities are located near known earthquake fault zones, and the occurrence of an earthquake
or other catastrophic disaster could damage our facilities and equipment, which could cause us to
curtail or cease operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our facilities are located in the San Francisco Bay Area near known earthquake fault zones and,
therefore, are vulnerable to damage from earthquakes. We are also vulnerable to damage from other
types of disasters, such as power loss, fire, floods and similar events. If any disaster were to
occur, our ability to operate our business could be seriously impaired. We currently may not have
adequate insurance to cover our losses resulting from disasters or other similar significant
business interruptions, and we do not plan to purchase additional insurance to cover such
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> losses
due to the cost of obtaining such coverage. Any significant losses that are not recoverable under
our insurance policies could seriously impair our business, financial condition and results of
operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Risks Relating to Owning Our Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our stock price has been and may continue to be extremely volatile.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our common stock price has experienced large fluctuations since our initial public offering in
March&nbsp;2006. In addition, the trading prices of life science and biotechnology company stocks in
general have experienced extreme price fluctuations in recent years. The valuations of many life
science companies without consistent product revenues and earnings are extraordinarily high based
on conventional valuation standards, such as price to revenue ratios. These trading prices and
valuations may not be sustained. Any negative change in the public&#146;s perception of the prospects of
life science or biotechnology companies could depress our stock price regardless of our results of
operations. Other broad market and industry factors may decrease the trading price of our common
stock, regardless of our performance. Market fluctuations, as well as general political and
economic conditions such as terrorism, military conflict, recession or interest rate or currency
rate fluctuations, also may decrease the trading price of our common stock. In addition, our stock
price could be subject to wide fluctuations in response to various factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual or anticipated results and timing of our clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual or anticipated regulatory approvals of our product candidates or competing
products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in laws or regulations applicable to our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the expected or actual timing of our development programs, including delays
or cancellations of clinical trials for our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>period to period fluctuations in our operating results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements of new technological innovations or new products by us or our
competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in financial estimates or recommendations by securities analysts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>conditions or trends in the life science and biotechnology industries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the market valuations of other life science or biotechnology companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>developments in domestic and international governmental policy or regulations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>additions or departures of key personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disputes or other developments relating to proprietary rights, including patents,
litigation matters and our ability to obtain patent protection for our technologies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales of our common stock (or other securities) by us, including sales under our equity
line of credit arrangement with Azimuth; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales and distributions of our common stock by our stockholders.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the past, stockholders have often instituted securities class action litigation after periods of
volatility in the market price of a company&#146;s securities. If a stockholder files a securities class
action suit against us, we would incur
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> substantial legal fees, and our management&#146;s attention and
resources would be diverted from operating our business in order to respond to the litigation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we sell shares of our common stock under our equity line of credit or in other future
financings, existing common stockholders will experience immediate dilution and, as a result, our
stock price may go down.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will need to raise additional capital to fund our operations, to develop our product candidates
and to develop our manufacturing capabilities. We may obtain such financing through the sale of our
equity securities from time to time. As a result, our existing common stockholders will experience
immediate dilution upon any such issuance. For example, in March&nbsp;2008, we entered into a common
stock purchase agreement with Azimuth, or the purchase agreement, which provides that, upon the
terms and subject to the conditions set forth in the purchase agreement, Azimuth is committed to
purchase up to $50&nbsp;million of our common stock at times and in amounts determined by us. Our
existing common stockholders will experience immediate dilution upon the purchase of any shares of
our common stock by Azimuth pursuant to the purchase agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Symphony Capital and Symphony Strategic Partners collectively control a substantial percentage of
the voting power of our outstanding common stock.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Symphony Capital and Symphony Strategic Partners currently collectively control approximately 6.7
million shares of our common stock and warrants to purchase approximately 3.4&nbsp;million shares of our
common stock. Based on our currently outstanding shares of common stock, these stockholders own
approximately 15.5% of our total outstanding shares of common stock. If these stockholders exercise
the warrants to purchase approximately 3.4&nbsp;million shares of our common stock described above in
full, assuming no other issuances of shares, based on our currently outstanding shares of common
stock, these stockholders would own approximately 21.6% of our total outstanding shares of our
common stock. Although these stockholders have entered into a standstill agreement with us, they
control more of our stock than any other group of stockholders, and Symphony Capital and Symphony
Strategic Partners will therefore be able to exercise substantial influence over any actions
requiring stockholder approval.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of the statements contained in this prospectus or documents incorporated by reference
constitute forward-looking statements. In some cases, you can identify forward-looking statements
by the following words: &#147;may,&#148; &#147;will,&#148; &#147;could,&#148; &#147;would,&#148; &#147;should,&#148; &#147;expect,&#148; &#147;intend,&#148; &#147;plan,&#148;
&#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;predict,&#148; &#147;project,&#148; &#147;potential,&#148; &#147;continue,&#148; &#147;ongoing&#148; or
the negative of these terms or other comparable terminology, although not all forward-looking
statements contain these words. Examples of these statements include, but are not limited to,
statements regarding: the prospects of us receiving approval to market AZ-004, our anticipated
timing for filing or receiving approval for our New Drug Application for AZ-004, the implications
of interim or final results of our clinical trials, the progress of our research programs,
including clinical testing, the extent to which our issued and pending patents may protect our
products and technology, the potential of such product candidates to lead to the development of
commercial products, our anticipated timing for initiation or completion of our clinical trials for
our product candidates, our future operating expenses, our future losses, our future expenditures
and the sufficiency of our cash resources. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from the information expressed or implied by these
forward-looking statements. While we believe that we have a reasonable basis for each
forward-looking statement contained in this prospectus, we caution you that these statements are
based on a combination of facts and factors currently known by us and our projections of the
future, about which we cannot be certain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, you should refer to the &#147;Risk Factors&#148; section of this prospectus for a
discussion of other important factors that may cause our actual results to differ materially from
those expressed or implied by our forward-looking statements. As a result of these factors, we
cannot assure you that the forward-looking statements in this prospectus or documents incorporated
by reference will prove to be accurate. Furthermore, if our forward-looking statements prove to be
inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these
forward-looking statements, you should not regard these statements as a representation or warranty
by us or any other person that we will achieve our objectives and plans in any specified time
frame, or at all. You should not place undue reliance on these forward-looking statements, which
apply only as of the date of this prospectus. You should read this prospectus and the documents
incorporated by reference completely and with the understanding that our actual future results may
be materially different from what we expect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We undertake no obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and our website.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DETERMINATION OF OFFERING PRICE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not selling any of the common stock that we are registering. The common stock will be
sold by the selling stockholders as detailed in this prospectus. Such selling stockholders may
sell the common stock at the market price as of the date of sale or a price negotiated in a private
sale. Our common stock is currently listed on the NASDAQ Global Market under the symbol &#147;ALXA&#148;.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders will receive all of the net proceeds from sales of the common stock
sold pursuant to this prospectus. However, in the case of warrants issued to the selling
stockholders on August&nbsp;26, 2009, upon exercise of the warrants for cash, the selling stockholders
would pay us an exercise price of $2.26 per share of common stock, or an aggregate of $11.3&nbsp;million
if the warrants are exercised in full. We intend to use the net proceeds generated by warrant
exercises, if any, for general corporate purposes. We cannot estimate how many, if any, of the
warrants will be exercised as a result of this offering. We will bear all costs, expenses and fees
in connection with the registration of shares of our common stock to be sold by the selling
stockholders. The selling stockholders will bear all commissions and discounts, if any
attributable to their respective sales of shares.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DIVIDEND POLICY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have never paid cash dividends on our common stock or any other securities. We anticipate
that we will retain all of our future earnings, if any, for use in the expansion and operation of
our business and do not anticipate paying cash dividends in the foreseeable future.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23.<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MARKET PRICE OF OUR COMMON STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock trades on the NASDAQ Global Market under the symbol &#147;ALXA.&#148; As of August&nbsp;31,
2009, there were 174 holders of record of our common stock. The following table sets forth, for
the periods indicated, the high and low sales prices of our common stock.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Low</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Third Quarter (through September&nbsp;8, 2009)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Low</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.16</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Low</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.86</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.00</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->24.<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus covers the resale by the selling stockholders of up to 15,000,000 shares of
our common stock, including up to 5,000,000 shares issuable upon the exercise of warrants held by
such selling stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;1, 2006, we and Holdings entered into a transaction involving a series of related
agreements providing for the financing of additional clinical and nonclinical development of
AZ-002, <I>Staccato </I>alprazolam, and AZ-004/AZ-104, <I>Staccato </I>loxapine (the &#147;Programs&#148;). Pursuant to
these agreements, Symphony Capital and certain co-investors formed Symphony Allegro and invested
$50&nbsp;million to fund additional clinical and nonclinical development of the Programs, and we
exclusively licensed to Symphony Allegro certain intellectual property rights related to the
Programs. We retained manufacturing rights to the Programs. We continued to be primarily
responsible for the development of the Programs in accordance with a development plan and related
development budgets that we agreed to with Holdings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the transaction described above, Holdings granted to us an exclusive
purchase option that gave us the right, but not the obligation, to acquire all, but not less than
all, of the outstanding equity securities (the &#147;Symphony Allegro Equity Securities&#148;) of Symphony
Allegro, which would result in our reacquisition of the intellectual property rights that we
licensed to Symphony Allegro (the &#147;Original Purchase Option&#148;). The Original Purchase Option would
have been exercisable for a price of $97.5&nbsp;million as of June&nbsp;15, 2009, which purchase price would
have increased quarterly by a predetermined amount up to $122.5&nbsp;million if the Original Purchase
Option were exercised on December&nbsp;1, 2010. If not exercised, the Original Purchase Option would
have expired on December&nbsp;1, 2010. The exercise price of the Original Purchase Option could have
been paid in cash or in a combination of cash and our common stock, in our sole discretion,
provided that the common stock portion could not exceed 40% of the exercise price of the Original
Purchase Option or 10% of our common stock issued and outstanding as of the closing of our
acquisition of the Symphony Allegro Equity Securities pursuant to the Original Purchase Option. If
we paid a portion of the exercise price of the Original Purchase Option in shares of our common
stock, we would have been required to register such shares for resale under a resale registration
statement pursuant to the terms of a registration rights agreement. In exchange for the Original
Purchase Option, we granted Holdings warrants to purchase 2,000,000 shares of our common stock at
an exercise price of $9.91 per share pursuant to a warrant purchase agreement, and granted certain
registration rights to Holdings pursuant to a registration rights agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;15, 2009, we, Holdings and Symphony Allegro entered into a series of related
agreements pursuant to which we agreed to amend the terms of the Original Purchase Option (as so
amended, the &#147;Amended Purchase Option&#148;). The Amended Purchase Option gave us the right, but not
the obligation, to acquire all, but not less than all, of the Symphony Allegro Equity Securities,
resulting in our reacquisition of the intellectual property rights that we licensed to Symphony
Allegro. We also exercised such purchase option on June&nbsp;15, 2009. On August&nbsp;26, 2009, in
connection with the closing of our acquisition of the Symphony Allegro Equity Securities pursuant
to the Amended Purchase Option, we (i)&nbsp;issued to the selling stockholders 10,000,000 shares of our
common stock and (ii)&nbsp;granted the selling stockholders, pursuant to a Warrant Purchase Agreement,
dated June&nbsp;15, 2009, between us and Holdings, warrants to purchase an aggregate of 5,000,000 shares
of our common stock, at an exercise price of $2.26 per share (the &#147;Warrants&#148;). The Warrants are
exercisable for a term of five years from the date of issuance. The warrants to purchase 2,000,000
shares issued initially to Holdings on December&nbsp;1, 2006 described above were cancelled concurrently
with the issuance of the Warrants. We have agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the &#147;Securities Act&#148;), with respect to the 10,000,000 shares of
our common stock issued upon the closing of our acquisition of the Symphony Allegro Equity
Securities pursuant to the Amended Purchase Option and the 5,000,000 shares of our common stock
issuable upon exercise of the Warrants pursuant to the Amended and Restated Registration Rights
Agreement, dated as of June&nbsp;15, 2009, between us and Holdings. In addition, Holdings is entitled to
receive payments from us equal to specified percentages of certain upfront, milestone, royalty,
profit sharing or similar payments received by us in respect of any agreement or arrangement with
any third party with respect to the development and/or commercialization of the Programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the closing of our acquisition of the Symphony Allegro Equity Securities
pursuant to the Amended Purchase Option, we, Holdings, Symphony Capital and Symphony Strategic
Partners (collectively with Holdings and Symphony Capital, the &#147;Symphony Parties&#148;) entered into an
agreement pursuant to which we agreed
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25.<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">to nominate and use our commercially reasonable efforts to
cause to be elected and cause to remain as a director on our board of directors one individual
designated by the Symphony Parties, for so long as the Symphony Parties and their affiliates
beneficially own more than 10% of our total outstanding shares of common stock. The Symphony
Parties also agreed, for so long as the Symphony Parties and their affiliates beneficially own more
than 10% of our total outstanding shares of common stock, to certain limitations on their ability
to acquire additional Alexza securities, vote their shares or take certain actions intended to
influence control of us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table sets forth, as of September&nbsp;9, 2009, (i)&nbsp;the name of each selling stockholder, (ii)
the number of shares of our common stock beneficially owned by each selling stockholder, (iii)&nbsp;the
maximum number of shares of our common stock that each selling stockholder can sell pursuant to
this prospectus assuming the exercise of all warrants held, (iv)&nbsp;the number of shares of our common
stock that will be beneficially owned by each selling stockholder assuming all of the shares they
are offering pursuant to this prospectus are sold, and (v)&nbsp;the percentage ownership of our
outstanding common stock that each selling stockholder will hold after the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we have assumed for purposes of the table that each selling stockholder will sell all
of the shares offered by this prospectus, we are unaware of any present intent to sell such shares
and can give no assurance as to the actual number of shares that will be sold, if any.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned Before</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ownership</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>Stock to be</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name of Selling Stockholder</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(1)(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering (3)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Symphony Capital Partners, L.P.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,421,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,421,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Symphony Strategic Partners, LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">664,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">664,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Howard Hughes Medical Institute</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,954,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">559,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stormlaunch &#038; Co. for the
benefit of Morgan Stanley
Private Markets Fund III LP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,116,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,116,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sailorshell &#038; Co. for the
benefit of Morgan Stanley AIP
Global Diversified Fund LP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mellon Bank, N.A. as Trustee of
the Weyerhaeuser Company Master
Retirement Trust</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">627,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">627,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sailorpier &#038; Co. for the
benefit of Aurora Cayman
Limited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->26.<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned Before</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ownership</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>Stock to be</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name of Selling Stockholder</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(1)(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering (3)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nuclear Electric Insurance Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Factory Mutual Insurance Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stormbay &#038; Co. for the benefit
of Vijverpoort Huizen C.V.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stormstar &#038; Co. for the benefit
of Morgan Stanley Private
Markets Fund Employee Investors
III LP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Northlight Fund LP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">RRD International, LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">450,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">450,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of common stock which
can be acquired under options or warrants that are currently exercisable, or which will become
exercisable no later than 60&nbsp;days after September&nbsp;9, 2009, are deemed outstanding for the
purposes of computing the percentage of the person holding such options or warrants, but not
deemed outstanding for the purposes of computing the percentage of any other person. Except
as indicated by footnote and subject to community property laws where applicable, the persons
named in the table have sole voting and investment power with respect to all shares of common
stock shown beneficially owned by them.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes all shares issuable upon the exercise of warrants without regard to restrictions on
exercise.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes sale of all shares available for sale under this prospectus and no further
acquisitions of shares by the selling stockholders.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->27.<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are registering the shares of our common stock offered in this prospectus on behalf of the
selling stockholders. The selling stockholders, which as used herein includes pledgees, donees,
transferees or other successors-in-interest selling shares received from the selling stockholders
as a gift, pledge, partnership distribution or other transfer after the date of this prospectus,
may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of our
common stock or interests in shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. The selling stockholders will
pay any brokerage commissions and similar selling expenses attributable to the sale of the shares.
We will pay other expenses relating to the preparation, updating and filing of this registration
statement. We will not receive any of the proceeds from the sale of the shares by the selling
stockholders. However, in the case of warrants issued to the selling stockholders on August&nbsp;26,
2009, upon a cash exercise of the warrants by the selling stockholders, we will receive the
exercise price of $2.26 per share of our common stock exercised. If the warrants are exercised in a
cashless exercise, we will not receive any proceeds from the exercise of the warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market price, at varying prices determined at the time of sale, or
at negotiated prices. To the extent any of the selling stockholders gift, pledge or otherwise
transfer the shares offered hereby, such transferees may offer and sell the shares from time to
time under this prospectus, provided that this prospectus has been amended under Rule&nbsp;424(b)(3) or
other applicable provision of the Securities Act to include the name of such transferee in the list
of selling stockholders under this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may use any one or more of the following methods when disposing of
shares or interests therein, some of which may or may not involve broker-dealers acting as agent or
principal:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker-dealer will attempt to sell the shares as agent,
but may position and resell a portion of the block as principal to facilitate the
transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an exchange distribution in accordance with the rules of the applicable exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>short sales;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>broker-dealers may agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of any such methods of sale; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other method permitted pursuant to applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of our common stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell the shares of our
common stock, from time to time, under this prospectus or under an amendment to this prospectus
under Rule&nbsp;424(b)(3) or other applicable provision of the
Securities Act, by amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->28.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the sale of our common stock or interests therein, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of our common stock in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge our common stock to broker-dealers
that in turn may sell these securities. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate proceeds to the selling stockholders from the sale of our common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if any. Each
of the selling stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may effect transactions by selling shares of our common stock
directly to purchasers or to or through broker-dealers, which may act as agents or principals.
Such broker-dealers may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders and/or the purchasers of shares of our common stock for whom such
broker-dealers may act as agents or to whom they sell as principal, or both (which compensation as
to a particular broker-dealer might be in excess of customary commissions).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have advised the selling stockholders that the anti-manipulation rules of Regulation&nbsp;M
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, may apply to sales of
shares in the market and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or amended from time to
time) available to the selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act, the Exchange Act and state securities laws, relating to the
registration of the shares offered by this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed with the selling stockholders to keep the registration statement that includes
this prospectus effective until the earlier of (i)&nbsp;such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the registration statement that
contains this prospectus and (ii)&nbsp;the date on which the selling stockholders may sell all of the
shares without restriction pursuant to Rule&nbsp;144.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders and any broker dealers that act in connection with the sale of the
shares might be deemed to be &#147;underwriters&#148; as the term is defined in Section&nbsp;2(11) of the
Securities Act. Consequently, any commissions received by these broker dealers and any profit on
the resale of the shares sold by them while acting as principals might be deemed to be underwriting
discounts or commissions under the Securities Act. Because the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->29.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">selling stockholders may be deemed
to be &#147;underwriters&#148; as defined in Section&nbsp;2(11) of the Securities Act, the selling stockholders
may be subject to the prospectus delivery requirements of the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule&nbsp;144 under the Securities Act, provided that they meet the
criteria and conform to the requirements of that rule.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->30.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>VALIDITY OF COMMON STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of our common stock being offered hereby will be passed upon for us by Cooley
Godward Kronish LLP, Broomfield, Colorado.
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ernst &#038; Young LLP, independent registered public accounting firm, has audited our
consolidated financial statements included in our Current Report on Form 8-K dated September&nbsp;9,
2009, and the effectiveness of our internal control over financial reporting as of December&nbsp;31,
2008, as set forth in their reports, which are incorporated by reference in this prospectus and
elsewhere in the registration statement. Our consolidated financial statements are incorporated by
reference in reliance on Ernst &#038; Young LLP&#146;s reports, given on their authority as experts in
accounting and auditing.
</DIV>
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document we file with the SEC at the SEC&#146;s Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference room. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other information regarding issuers
that file electronically with the SEC, including Alexza. The SEC&#146;s Internet site can be found at
http://www.sec.gov.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to another document that we have
filed separately with the SEC. You should read the information incorporated by reference because it
is an important part of this prospectus. We incorporate by reference the following information or
documents that we have filed with the SEC (Commission File No.&nbsp;000-51820):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents filed with the SEC are incorporated by reference in this prospectus:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on January&nbsp;20, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on January&nbsp;26, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on February&nbsp;2, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on February&nbsp;24, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on February&nbsp;26, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our annual report on Form 10-K for the fiscal year ended December&nbsp;31, 2008, filed
with the SEC on March&nbsp;10, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our definitive proxy statement on Schedule&nbsp;14A, filed with the SEC on March&nbsp;27,
2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on March&nbsp;27, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our quarterly report on Form 10-Q for the quarter ended March&nbsp;31, 2009, filed with
the SEC on May&nbsp;11, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on June&nbsp;15, 2009.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->31.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our amendment to quarterly report on Form 10-Q/A for the quarter ended March&nbsp;31,
2009, filed with the SEC on June&nbsp;19, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our amendment to current report on Form 8-K/A, filed with the SEC on June&nbsp;26, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our amendment to current report on Form 8-K/A, filed with the SEC on June&nbsp;26, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our definitive proxy statement on Schedule&nbsp;14A, filed with the SEC on July&nbsp;27, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our quarterly report on Form 10-Q for the quarter ended June&nbsp;30, 2009, filed with
the SEC on August&nbsp;5, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on August&nbsp;26, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current report on Form 8-K, filed with the SEC on September&nbsp;9, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of our common stock set forth in our registration statement on Form
S-1, filed with the SEC on December&nbsp;22, 2005, including any amendments thereto or
reports filed for the purpose of updating this transaction.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any information in any of the foregoing documents will automatically be deemed to be modified
or superseded to the extent that information in this prospectus or in a later filed document that
is incorporated or deemed to be incorporated herein by reference modifies or replaces such
information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will furnish without charge to you, upon written or oral request, a copy of any or all of
the documents incorporated by reference, including exhibits to these documents. You should direct
any requests for documents to Alexza Pharmaceuticals, Inc., Attention: Corporate Secretary, 2091
Stierlin Court, Mountain View, California 94043. Our phone number is (650)&nbsp;944-7000. In addition,
all of the documents incorporated by reference into this prospectus may be accessed via the
Internet at our website: http://www.alexza.com.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->32.<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 3pt double black; font-size: 1pt">&nbsp;</DIV>







<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>15,000,000 Shares</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="d69061d6906100.gif" alt="(ALEXZA LOGO)">

</DIV>

<DIV align="Center" style="font-size: 14pt; margin-top: 6pt"><B>Alexza Pharmaceuticals, Inc.</B>

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><B>Common Stock</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">, 2009

</DIV>

<DIV style="width: 100%; border-bottom: 3pt double black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
Information Not Required In Prospectus</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;13. Other Expenses of Issuance and Distribution.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth all expenses to be paid by the Registrant, other than the
underwriting discounts and commissions payable by the Registrant, in connection with the sale of
the common stock being registered. All amounts shown are estimates except for the SEC registration
fee.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>AMOUNT</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>TO BE</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>PAID</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">SEC registration fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,151</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounting fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Miscellaneous expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">77,151</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;14. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law permits indemnification of officers,
directors and other corporate agents under certain circumstances and subject to certain
limitations. The Registrant&#146;s certificate of incorporation and bylaws provide that the Registrant
will indemnify its directors, officers, employees and agents to the full extent permitted by
Delaware General Corporation Law, including in circumstances in which indemnification is otherwise
discretionary under Delaware law. In addition, the Registrant has entered into indemnification
agreements with its directors and officers that require us, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service (other than
liabilities arising from willful misconduct of a culpable nature). The indemnification provisions
in the Registrant&#146;s certificate of incorporation and bylaws and the indemnification agreement
entered into between the Registrant and its directors may be sufficiently broad to permit
indemnification of its officers and directors for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act. The Registrant also maintains director and officer
liability insurance to insure its directors and officers against the cost of defense, settlement or
payment of a judgment under certain circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;15. Recent Sales of Unregistered Securities and Use of Proceeds.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Recent Sales of Unregistered Equity Securities</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Between February&nbsp;10, 2009, and March&nbsp;27, 2009, the Registrant issued an aggregate of 14,699 shares
of common stock that were not registered under the Securities Act to employees pursuant to the
exercise of stock options for cash consideration with aggregate exercise proceeds of approximately
$18,800. As previously disclosed in &#147;Risk Factors&#148; above, the Registrant failed to timely file a
current report on Form 8-K in February&nbsp;2009. As a result of the failure to timely file the report,
the Registrant&#146;s registration statement on Form S-8 was unavailable for registration of the shares
issued pursuant to the option exercises described above at the time of the exercises. Consequently,
the Registrant may be deemed to have inadvertently failed to register these shares. The failure to
register the shares issued pursuant to the option exercises was inadvertent, and the Registrant has
treated the shares issued under the option plan as outstanding for financial reporting purposes.
Consequently, the unregistered transactions do not represent additional dilution. In addition, the
Registrant believes that it has provided the employees exercising the options with the same
information they would have received if the registration statement had been available at the time
of exercise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;26, 2009, the Registrant issued 10,000,000 shares of common stock and warrants to
purchase 5,000,000 shares of common stock at an exercise price of $2.26 per share to Symphony
Capital, Symphony Strategic Partners
and certain other investors of Holdings in connection with the Registrant&#146;s acquisition of the
Symphony Allegro Equity Securities from Holdings. These entities are collectively referred to as
the selling stockholders. The
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-1 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">warrants are exercisable for a term of five years from the date of
issuance. The number of shares for which the warrants are exercisable and the associated exercise
prices are subject to certain adjustments as set forth in the warrants. In addition, upon certain
changes in control of the Registrant, the holder must either exercise the warrant or surrender the
warrant for a new warrant exercisable in return for shares of common stock of the surviving entity.
These shares of common stock and warrants were issued pursuant to the exemption from the
registration requirements of the Securities Act afforded by Section&nbsp;4(2) of the Securities Act and
Rule&nbsp;506 of Regulation&nbsp;D thereunder, as a transaction not involving a public offering. Pursuant to
a registration rights agreement with Holdings, the Registrant is obligated to file with the SEC a
registration statement for these shares of common stock and the shares of common stock underlying
the warrants and to use commercially reasonable efforts to cause the SEC to declare the
registration statement effective and to keep the registration statement effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Use of Proceeds from the Sale of Registered Securities</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-2 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;16. Exhibits.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of Incorporation(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Amended and Restated Bylaws(5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Common Stock Certificate(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amended and Restated Investors&#146; Rights Agreement between Registrant and certain holders of Preferred
Stock dated November&nbsp;5, 2004(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Cooley Godward Kronish LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Director/Officer Indemnification Agreement entered into between Registrant and each of its
directors and officers(9)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Change of Control Agreement(13)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Equity Incentive Plan(8)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Equity
Incentive Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Non-Employee Directors&#146; Stock Option Plan(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Non-Employee
Directors&#146; Stock Option Plan(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Employee Stock Purchase Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Offering Document to 2005 Employee Stock Purchase Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease between Registrant and California Pacific Commercial Corporation dated March&nbsp;20, 2002(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between Registrant and California Pacific Commercial Corporation dated May&nbsp;8,
2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to Lease between Registrant and California Pacific Commercial Corporation dated February
11, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Development Agreement between Registrant and Autoliv ASP, Inc. dated October&nbsp;3, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Loan and Security Agreement between Registrant and Silicon Valley Bank dated March&nbsp;20, 2002, as amended on
January&nbsp;7, 2003, September&nbsp;3, 2003, March&nbsp;18, 2004 and May&nbsp;16, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Master Security Agreement between Registrant and General Electric Capital Corporation dated May&nbsp;17, 2005,
as amended on May&nbsp;18, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note between Registrant and General Electric Capital Corporation dated June&nbsp;15, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note between Registrant and General Electric Capital Corporation dated August&nbsp;24, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;B Preferred Stock issued to Silicon Valley Bank dated March&nbsp;20, 2002(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated January&nbsp;7, 2003,
as amended on March&nbsp;4, 2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated September&nbsp;19,
2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated April&nbsp;7, 2004(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease Agreement between the Brittania, LLC and the Registrant dated August&nbsp;25, 2006(2)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-3 <!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.26&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase Option Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Purchase Agreement between Symphony Allegro Holdings LLC and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Common Stock issued to Symphony Allegro Holdings LLC dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.29&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Research and Development Agreement by and among Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement between Symphony Allegro Holdings LLC and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Novated and Restated Technology License Agreement by and among Symphony Allegro Holdings LLC and Symphony
Allegro, Inc. and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Confidentiality Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.33
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2007 Performance Bonus Program(2)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.34
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated May&nbsp;4, 2007(3)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.35&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated August&nbsp;28, 2007(4)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.36&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Manufacturing and Supply Agreement between Registrant and Autoliv ASP, Inc., dated November&nbsp;2, 2007(5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.38
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offer Letter between the Registrant and Michael Simms, dated January&nbsp;23, 2008(5)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.39
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock and Warrant Purchase Agreement between Registrant and Biomedical Investment Fund Pte Ltd., dated
March&nbsp;26, 2008(6)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.40
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Common Stock issued to Biomedical Investment Fund Pte Ltd. dated March&nbsp;27,
2008(6)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.41
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Common Stock Purchase Agreement between Registrant and Azimuth Opportunity Ltd. dated March&nbsp;31, 2008(7)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.42
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Grant of Award and Stock Unit Award Agreement to 2005 Equity Incentive Plan(13)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.43
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2006 Performance Bonus Program(10)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2008 Performance Bonus Program(11)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2009-2010 Performance Based Incentive Program(12)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Severance Agreement and Release Agreement between the Registrant and Anthony Tebbutt, dated February&nbsp;6,
2009 and February&nbsp;17, 2009, respectively(14)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.47&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Purchase Option Agreement by and among Registrant, Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.48
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Purchase Agreement between Registrant and Symphony Allegro Holdings LLC dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Registration Rights Agreement between the Registrant and Symphony Allegro Holdings LLC
dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.50
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amendment to Change of Control Agreement(16)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.51
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Warrants to Purchase shares of Common Stock dated August&nbsp;26, 2009(17)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement among the Company, Symphony Allegro Holdings LLC, Symphony Capital Partners, L.P. and
Symphony Strategic Partners, LLC dated August&nbsp;26, 2009(17)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Alexza Pharmaceuticals, Inc. Code of Business Conduct for Employees, Executive Officers and Directors(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of Registrant</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-4 <!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Registered Public Accounting Firm</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Cooley Godward Kronish LLP (Included in Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney included on the signature pages hereto</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Management contract or compensation plan or arrangement.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><FONT face="Wingdings" >&#119;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herein</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#134;</TD>
    <TD>&nbsp;</TD>
    <TD>Confidential treatment has been granted with respect to certain
portions of this exhibit. This exhibit omits the information subject
to this confidentiality request. Omitted portions have been filed
separately with the SEC.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to exhibits to our Registration Statement
on Form S-1 filed on December&nbsp;22, 2005, as amended (File No.
333-130644)</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;29, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on August&nbsp;13, 2007</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on November&nbsp;1, 2007</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;17, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March&nbsp;17, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March&nbsp;31, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on May&nbsp;30, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on July&nbsp;14, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June&nbsp;5, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on April&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on February&nbsp;24, 2009, as amended by
Amendment No.&nbsp;1 thereto as filed with the SEC on June&nbsp;26, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;10, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on May&nbsp;11, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(15)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June&nbsp;15, 2009, as amended by
Amendment No.&nbsp;1 thereto as filed with the SEC on June&nbsp;26, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(16)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on August&nbsp;5, 2009.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-5 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(17)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on August&nbsp;26, 2009.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-6 <!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;17. Undertakings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;to include any prospectus required by section 10(a)(3) of the Securities Act;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;to reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20&nbsp;percent change in the maximum aggregate offering
price set forth in the &#147;Calculation of Registration Fee&#148; table in the effective registration
statement; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial <I>bona fide </I>offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC this form
of indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against these liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted
by a director, officer or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of this issue.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-7 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Mountain View, California, on the 9<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day of September, 2009.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px">ALEXZA PHARMACEUTICALS, INC.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Thomas B. King
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Thomas B. King<BR>
President and Chief Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-8 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL PERSONS BY THESE POWER OF ATTORNEY PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Thomas B. King and August J. Moretti, and each of them acting
individually, as his or her true and lawful attorneys-in-fact and agents, each with full power of
substitution, for him or her in any and all capacities, to sign any and all amendments to this
registration statement (including post-effective amendments), and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power
and authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully for all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, this registration statement has been
signed by the following persons in the capacities and on the dates indicated:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Thomas B. King
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Thomas B. King
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>President, Chief Executive Officer and Director<BR>

(Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ August J. Moretti
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
August J. Moretti
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Senior Vice President and Chief Financial
Officer<br>
(Principal Financial and Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Hal V. Barron
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Hal V. Barron
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Samuel D. Colella
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Samuel D. Colella
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Alan D. Frazier
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Alan D. Frazier
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s Deepika R. Pakianathan
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Deepika R. Pakianathan
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ J. Leighton Read
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
J. Leighton Read
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Gordon Ringold
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Gordon Ringold
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Isaac Stein
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Isaac Stein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;9, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-9 <!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of Incorporation(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Amended and Restated Bylaws(5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Common Stock Certificate(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amended and Restated Investors&#146; Rights Agreement between Registrant and certain holders of Preferred
Stock dated November&nbsp;5, 2004(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Cooley Godward Kronish LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Director/Officer Indemnification Agreement entered into between Registrant and each of its
directors and officers(9)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Change of Control Agreement(13)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Equity Incentive Plan(8)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Equity
Incentive Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Non-Employee Directors&#146; Stock Option Plan(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Non-Employee
Directors&#146; Stock Option Plan(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Employee Stock Purchase Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Offering Document to 2005 Employee Stock Purchase Plan(1)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease between Registrant and California Pacific Commercial Corporation dated March&nbsp;20, 2002(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between Registrant and California Pacific Commercial Corporation dated May&nbsp;8,
2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to Lease between Registrant and California Pacific Commercial Corporation dated February
11, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Development Agreement between Registrant and Autoliv ASP, Inc. dated October&nbsp;3, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Loan and Security Agreement between Registrant and Silicon Valley Bank dated March&nbsp;20, 2002, as amended on
January&nbsp;7, 2003, September&nbsp;3, 2003, March&nbsp;18, 2004 and May&nbsp;16, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Master Security Agreement between Registrant and General Electric Capital Corporation dated May&nbsp;17, 2005,
as amended on May&nbsp;18, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note between Registrant and General Electric Capital Corporation dated June&nbsp;15, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Promissory Note between Registrant and General Electric Capital Corporation dated August&nbsp;24, 2005(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;B Preferred Stock issued to Silicon Valley Bank dated March&nbsp;20, 2002(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated January&nbsp;7, 2003,
as amended on March&nbsp;4, 2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated September&nbsp;19,
2003(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Series&nbsp;C Preferred Stock issued to Silicon Valley Bank dated April&nbsp;7, 2004(1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease Agreement between the Brittania, LLC and the Registrant dated August&nbsp;25, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.26&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase Option Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-10 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Purchase Agreement between Symphony Allegro Holdings LLC and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Common Stock issued to Symphony Allegro Holdings LLC dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.29&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Research and Development Agreement by and among Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement between Symphony Allegro Holdings LLC and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Novated and Restated Technology License Agreement by and among Symphony Allegro Holdings LLC and Symphony
Allegro, Inc. and Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Confidentiality Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December&nbsp;1, 2006(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.33
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2007 Performance Bonus Program(2)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.34
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated May&nbsp;4, 2007(3)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.35&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated August&nbsp;28, 2007(4)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.36&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Manufacturing and Supply Agreement between Registrant and Autoliv ASP, Inc., dated November&nbsp;2, 2007(5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.38
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offer Letter between the Registrant and Michael Simms, dated January&nbsp;23, 2008(5)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.39
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock and Warrant Purchase Agreement between Registrant and Biomedical Investment Fund Pte Ltd., dated
March&nbsp;26, 2008(6)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.40
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase shares of Common Stock issued to Biomedical Investment Fund Pte Ltd. dated March&nbsp;27,
2008(6)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.41
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Common Stock Purchase Agreement between Registrant and Azimuth Opportunity Ltd. dated March&nbsp;31, 2008(7)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.42
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Grant of Award and Stock Unit Award Agreement to 2005 Equity Incentive Plan (13)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.43
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2006 Performance Bonus Program(10)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2008 Performance Bonus Program(11)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2009-2010 Performance Based Incentive Program(12)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Severance Agreement and Release Agreement between the Registrant and Anthony Tebbutt, dated February&nbsp;6,
2009 and February&nbsp;17, 2009, respectively(14)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.47&#134;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Purchase Option Agreement by and among Registrant, Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.48
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Purchase Agreement between Registrant and Symphony Allegro Holdings LLC dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Registration Rights Agreement between the Registrant and Symphony Allegro Holdings LLC
dated June&nbsp;15, 2009(15)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.50
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amendment to Change of Control Agreement(16)*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.51
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Warrants to Purchase shares of Common Stock dated August&nbsp;26, 2009(17)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement among the Company, Symphony Allegro Holdings LLC, Symphony Capital Partners, L.P. and
Symphony Strategic Partners, LLC dated August&nbsp;26, 2009(17)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Alexza Pharmaceuticals, Inc. Code of Business Conduct for Employees, Executive Officers and Directors(2)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of Registrant</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Registered Public Accounting Firm</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Cooley Godward Kronish LLP (Included in Exhibit&nbsp;5.1)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-11 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1<FONT face="Wingdings" >&#119;</FONT>

</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney included on the signature pages hereto</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Management contract or compensation plan or arrangement.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><FONT face="Wingdings" >&#119;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herein</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#134;</TD>
    <TD>&nbsp;</TD>
    <TD>Confidential treatment has been granted with respect to certain
portions of this exhibit. This exhibit omits the information subject
to this confidentiality request. Omitted portions have been filed
separately with the SEC.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to exhibits to our Registration Statement
on Form S-1 filed on December&nbsp;22, 2005, as amended (File No.
333-130644)</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;29, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on August&nbsp;13, 2007</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on November&nbsp;1, 2007</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;17, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March&nbsp;17, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March&nbsp;31, 2008</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on May&nbsp;30, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on July&nbsp;14, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June&nbsp;5, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on April&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on February&nbsp;24, 2009, as amended by
Amendment No.&nbsp;1 thereto as filed with the SEC on June&nbsp;26, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March&nbsp;10, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on May&nbsp;11, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(15)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Amendment No.&nbsp;1 to Current Report on
Form 8-K/A (File No.&nbsp;000-51820) as filed with the SEC on June&nbsp;26,
2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(16)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Quarterly Report on Form 10-Q (File
No.&nbsp;000-51820) as filed with the SEC on August&nbsp;5, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(17)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on August&nbsp;26, 2009.</TD>
</TR>

</TABLE>




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sv1
Table of Contents
As filed with the Securities and Exchange Commission on September 9, 2009
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALEXZA PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
2834
77-0567768
(State or other jurisdiction
(Primary Standard Industrial
(I.R.S. Employer
of incorporation or organization)
Classification Code Number)
Identification No.)
Alexza Pharmaceuticals, Inc.
2091 Stierlin Court
Mountain View, California 94043
(650) 944-7000
(Address, including zip code, and telephone number, including area code, of the Registrant's principal executive offices)
Thomas B. King
President and Chief Executive Officer
Alexza Pharmaceuticals, Inc.
2091 Stierlin Court
Mountain View, California 94043
(650) 944-7000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
James C.T. Linfield, Esq.
Brent D. Fassett, Esq.
Cooley Godward Kronish LLP
380 Interlocken Crescent
Suite 900
Broomfield, Colorado 80021
(720) 566-4000
Approximate date of commencement of proposed sale to the public:
From time to time following the effectiveness of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities
Act"), check the following box.
þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
o
Accelerated filer
þ
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
Maximum Offering
Maximum
Title of Each Class of
Amount to be
Price
Aggregate
Amount of
Securities to be Registered
Registered(1)
Per Share (1)
Offering Price (1)
Registration Fee
Common Stock, $.0001 par value
10,000,000
$
2.57
$
25,700,000.00
$
1,434
Common Stock, $.0001 par
value, issuable upon the
exercise of warrants
5,000,000
$
2.57
$
12,850,000.00
$717
Total (3)
15,000,000
$
2.57
$
38,550,000.00
$
2,151
(2)
(1)
In accordance with Rule 457(c), this price is estimated solely for purposes of calculating
the registration fee and is based upon the average of the high and low sales prices of the
common stock as reported on the NASDAQ Global Market on September 2, 2009.
(2)
Pursuant to Rule 457(p) under the Securities Act, the Registrant hereby offsets the total
Registration Fee due under this registration statement by the amount of the filing fee
associated with the unsold securities from the Registrant's registration statement on Form
S-3, filed with the Commission on March 30, 2007 (SEC File No. 333-141724). The Registrant
had registered securities for a maximum aggregate offering price of $19,820,000 on that
registration statement. The Registrant has not sold any of the common stock registered
therein, leaving a balance of unsold securities with an aggregate offering price of
$19,820,000; the associated filing fee of $609.00 for such unsold securities, calculated under
Rule 457(o), is hereby used to offset the current Registration Fee due.
(3)
Pursuant to Rule 416 under the Securities Act, the Registrant is also registering such
additional indeterminate number of shares as may become necessary to adjust the number of
shares as a result of a stock split, stock dividend or similar adjustment of its outstanding
common stock.
The Registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with
Section 8(a)
of the Securities Act, or until the registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a)
, may
determine.
Table of Contents
The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated September 9, 2009
15,000,000 Shares
Alexza Pharmaceuticals, Inc.
Common Stock
This prospectus relates to offers and resales or other dispositions by the selling
stockholders listed in this prospectus, including their transferees, pledgees or donees or their
respective successors, of up to 15,000,000 shares of our common stock, which includes up to
5,000,000 shares of our common stock issuable upon the exercise of warrants. We are registering
these shares on behalf of the selling stockholders, to be offered and sold by them from time to
time.
These shares may be sold by the selling stockholders from time to time in the over-the-counter
market or on any national securities exchange or automated interdealer quotation system on which
our common stock is then listed or quoted, through negotiated transactions or otherwise. The prices
at which the selling stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. We will not receive any of the proceeds from
the disposition of these shares by the selling stockholders, other than as a result of the exercise
for cash of warrants held by the selling stockholders.
No underwriter or other person has been engaged to facilitate the sale of shares of our common
stock in this offering. The selling stockholders may be deemed underwriters of the shares of our
common stock that they are offering. We will bear all costs, expenses and fees in connection with
the registration of these shares. The selling stockholders will bear all commissions and discounts,
if any, attributable to their respective sales of shares.
Our common stock is currently listed on the NASDAQ Global Market under the symbol "ALXA". On
September 8, 2009, the last reported sale price of our common stock on NASDAQ was $2.77 per
share.
See "Risk Factors" beginning on page 4 to read about factors you should consider before
buying shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed on the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated                 , 2009
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
PROSPECTUS SUMMARY
1
RISK FACTORS
4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
22
DETERMINATION OF OFFERING PRICE
23
USE OF PROCEEDS
23
DIVIDEND POLICY
23
MARKET PRICE OF OUR COMMON STOCK
24
SELLING STOCKHOLDERS
25
PLAN OF DISTRIBUTION
28
VALIDITY OF COMMON STOCK
31
EXPERTS
31
WHERE YOU CAN FIND MORE INFORMATION
31
EX-5.1
EX-21.1
EX-23.1
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-1 that we filed with the
Securities and Exchange Commission (the "SEC") using the "shelf" registration process. Under this
process, selling stockholders may from time to time, in one or more offerings, sell the securities
described in this prospectus.
You should rely only on the information contained in or incorporated by reference into this
prospectus (as supplemented and amended). We have not authorized anyone to provide you with
different information. This document may only be used where it is legal to sell these securities.
You should not assume that the information contained in this prospectus is accurate as of any date
other than its date regardless of the time of delivery of the prospectus or any sale of the
securities described in this prospectus.
This prospectus and the information incorporated herein by reference includes trademarks,
service marks and trade names owned by us or others. All trademarks, service marks and trade names
included or incorporated by reference into this prospectus or any applicable prospectus supplement
are the property of their respective owners.
We urge you to read carefully this prospectus, together with the information incorporated
herein by reference, as described under the heading "Where You Can Find More Information," before
deciding whether to invest in any of the securities being offered.
References in this prospectus to "Alexza," "we," "us" and "our" refer to Alexza Pharmaceuticals,
Inc., a Delaware corporation, and its subsidiaries. Our principal executive offices are located at
2091 Stierlin Court, Mountain View, CA 94043 and our telephone number is (650) 944-7000. Our web
site address is http://www.alexza.com. The information contained in, or that can be accessed
through, our web site is not part of this prospectus.
Table of Contents
PROSPECTUS SUMMARY
This summary may not contain all the information that may be important to you. You should read
the entire prospectus, including the financial data and related notes, risk factors and other
information contained in or incorporated by reference in this prospectus (as supplemented and
amended), before making an investment decision.
Our Business and Technologies
We are a pharmaceutical development company focused on the research, development, and
commercialization of novel proprietary products for the acute treatment of central nervous system,
or CNS, conditions. All of our product candidates are based on our proprietary technology, the
Staccato
system. The
Staccato
system vaporizes an excipient-free drug to form a condensation
aerosol that, when inhaled, allows for rapid systemic drug delivery. Because of the particle size
of the aerosol, the drug is quickly absorbed through the deep lung into the bloodstream, providing
speed of therapeutic onset that is comparable to intravenous, or IV, administration but with
greater ease, patient comfort and convenience. We currently have six product candidates in various
stages of clinical development, ranging from Phase 1 through late-stage Phase 3. In 2009, our focus
is on the continued rapid development of AZ-004, with a goal of submitting our AZ-004 New Drug
Application, or NDA, in the first quarter of 2010.
We have identified approximately 200 drug compounds that have demonstrated initial
vaporization feasibility for delivery with our technology. We believe that a number of these drug
compounds, when delivered by the
Staccato
system, will have a desirable therapeutic profile for the
treatment of acute and intermittent conditions. We are initially focusing on developing proprietary
products by combining our
Staccato
system with small molecule drugs that have been in use for many
years and are well characterized to create aerosolized forms of these drugs. We believe that we
will be able to reduce the development time and risks associated with our product candidates,
compared to the development of new chemical entities.
Our clinical-stage product candidates are:
•
AZ-004 (Staccato loxapine).
We are developing AZ-004 for the acute treatment of
agitation in patients with schizophrenia or bipolar disorder. In 2008, we successfully
initiated, enrolled and completed our two pivotal Phase 3 clinical trials. We announced
positive results from these two studies in September and December 2008, and presented data
from these clinical trials at the American Psychiatry Association annual meeting in May
2009.
During 2009, we have five non-pivotal safety and NDA-supporting studies to conduct, which
will complete our planned NDA clinical work. During the first quarter of 2009, we completed
a Phase 1 placebo-controlled study in 30 healthy subjects to assess the pulmonary safety of
AZ-004. We observed that AZ-004, administered twice within a 24-hour period, was safe and
generally well tolerated in this study. There were no systematic effects on pulmonary
function vs. placebo, and no respiratory adverse events.
During the second quarter, we initiated the four remaining AZ-004 non-pivotal safety and
NDA-supporting studies. These studies were a thorough QTc study in healthy subjects, a
smoker/non-smoker pharmacokinetic, or PK, study in healthy subjects, a pulmonary safety
study in subjects with asthma and a pulmonary safety study in subjects with chronic
obstructive pulmonary disease, or COPD.
We completed the enrollment in the Phase 1 placebo-controlled thorough QTc study in 48
healthy subjects. The purpose of a thorough QTc study is to determine a drug's potential
effect on cardiac rhythms. In this study, we found that the active control, moxifloxacin,
produced a positive QT/QTc signal that validated the sensitivity of the clinical study. At
all timepoints for the primary analysis, the
confidence intervals of the QTc for AZ-004 were within the United States Food and Drug
Administration, or FDA, standard 10 millisecond window, supporting the cardiac safety of
AZ-004.
1.
Table of Contents
We completed enrollment in the Phase 1 smoker/non-smoker PK study in 35 healthy subjects. We
observed comparable blood levels in smokers and non-smokers for both AZ-004 and the
metabolites of AZ-004. Side-effect profiles were similar in smokers and non-smokers.
We have also completed the enrollment of the two pulmonary safety studies, one in subjects
with asthma and one in subjects with COPD. We expect to complete the data collection and
data analysis in both of these studies by the end of the third quarter of 2009.
In July 2009, we completed our AZ-004 pre-NDA meeting with the FDA. We have confirmed our
understanding of the NDA submission contents, and we continue to project our AZ-004 NDA
submission for the first quarter of 2010.
•
AZ-104 (Staccato loxapine)
. We are developing AZ-104 to treat patients
suffering from acute migraine headaches. AZ-104 is a lower-dose version of AZ-004.
In June 2009, we completed enrollment in our Phase 2b clinical trial, enrolling
366 patients with migraines. This outpatient, multi-center, randomized, double-blind,
single-dose, placebo-controlled study was initiated in January 2009. Two dose levels of
AZ-004 are being evaluated in the clinical trial, 1.25 mg and 2.5 mg. The primary
efficacy endpoint for the trial is headache pain relief at 2 hours post-dose, using the
standard IHS 4-point rating scale. Secondary efficacy endpoints for the trial include
pain relief and other symptom assessments at various time points. Safety evaluations
were also made throughout the clinical trial period. We project that data from this
Phase 2b study will be available before the end of the third quarter of 2009.
•
AZ-001 (Staccato prochlorperazine)
. We are developing AZ-001 to treat
patients suffering from acute migraine headaches. During the third quarter of 2008, we
conducted an end-of-Phase 2 meeting with the FDA. We believe we have a clear
understanding of the development requirements for filing an NDA for this product
candidate. We do not intend to conduct any AZ-001 Phase 3 studies without a partner,
and we are continuing to seek partners for our two
Staccato
migraine product
candidates, AZ-001 and AZ-104.
•
AZ-007 (Staccato zaleplon)
. We are developing AZ-007 for the treatment of
insomnia in patients who have difficulty falling asleep, including patients who awake
in the middle of the night and have difficulty falling back asleep. AZ-007 has
completed Phase 1 testing and we announced positive results from this study. During
2009, we do not intend to conduct any AZ-007 Phase 2 studies without a partner.
•
AZ-003 (Staccato fentanyl)
. We are developing AZ-003 for the treatment of patients
with acute pain, including patients with breakthrough cancer pain and postoperative patients
with acute pain episodes. We have completed and announced positive results from a Phase 1
clinical trial of AZ-003 in opioid naïve healthy subjects. We do not expect to pursue the
development of AZ-003 without a partner.
•
AZ-002 (Staccato alprazolam).
AZ-002 has completed a Phase 1 clinical trial in healthy
subjects and a Phase 2a proof-of-concept clinical trial in panic disorder patients for the
treatment of panic attacks, an indication we are not planning to pursue. However, given the
safety profile, the successful and reproducible delivery of alprazolam, and the IV-like
pharmacological effect demonstrated to date, we are assessing AZ-002 for other possible
indications and renewed clinical development. During 2009, we do not intend to conduct any
AZ-002 Phase 2 studies without a partner.
The Offering
This prospectus relates to the resale by the selling stockholders listed in this prospectus,
which include Symphony Capital Partners, L.P. ("Symphony Capital"), Symphony Strategic Partners,
LLC ("Symphony Strategic
Partners") and certain other investors of Symphony Allegro Holdings LLC ("Holdings"), of up to
15,000,000 shares of our common stock, 5,000,000 shares of which are issuable upon the exercise of
warrants held by the selling stockholders. All of the shares, when sold, will be sold by the
selling stockholders. Such selling stockholders may sell their shares of our common stock from
time to time at market prices prevailing at the time of sale, at prices related to the prevailing
market price, or at negotiated prices. We will not receive any of the proceeds from the
2.
Table of Contents
disposition of these shares by the selling stockholders, other than as a result of the exercise of
warrants held by the selling stockholders for cash.
3.
Table of Contents
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider
the risks described below, together with all of the other information included in this prospectus
and the documents incorporated by reference, before deciding whether to invest in shares of our
common stock. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial also may impair our business operations. The occurrence of any of the following
risks could harm our business, financial condition or results of operations. In such case, the
trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Relating to Our Business
We have a history of net losses. We expect to continue to incur substantial and increasing net
losses for the foreseeable future, and we may never achieve or maintain profitability.
We are not profitable and have incurred significant net losses in each year since our inception,
including net losses of $23.9 million, $77.0 million, $55.9 million, and $43.5 million for the six
months ended June 30, 2009, and the years ended December 31, 2008, 2007 and 2006, respectively. As
of June 30, 2009, we had a deficit accumulated during development stage of $234.0 million. We
expect our expenses to decrease in 2009 compared to 2008 levels as a result of our reduction in
force, which we effected in January 2009 and as we expect lower clinical expenses with respect to
our lead development program in the second half of 2009; however, we expect to incur substantial
net losses and negative cash flow for the foreseeable future. These losses and negative cash flows
have had, and will continue to have, an adverse effect on our stockholders' equity (deficit) and
working capital.
Because of the numerous risks and uncertainties associated with pharmaceutical product development
and commercialization, we are unable to accurately predict the timing or amount of future expenses
or when, or if, we will be able to achieve or maintain profitability. Currently, we have no
products approved for commercial sale, and to date we have not generated any product revenue. We
have financed our operations primarily through the sale of equity securities, capital lease and
equipment financing and government grants. The size of our future net losses will depend, in part,
on the rate of growth of our expenses and the level and rate of growth, if any, of our revenues.
Revenues from strategic partnerships are uncertain because we may not enter into any additional
strategic partnerships. We began to recognize revenues from our partnership with Endo in the third
quarter of 2008, and we recognized approximately $9.5 million in revenue in the three months ended
March 31, 2009 as a result of termination of the Endo license agreement in January 2009. If we are
unable to develop and commercialize one or more of our product candidates or if sales revenue from
any other product candidate that receives marketing approval is insufficient, we will not achieve
profitability. Even if we do achieve profitability, we may not be able to sustain or increase
profitability.
We are a development stage company. Our success depends substantially on our lead product
candidates. If we do not develop commercially successful products, we may be forced to cease
operations.
You must evaluate us in light of the uncertainties and complexities affecting a development stage
pharmaceutical company. We have not completed clinical development for any of our product
candidates. Our lead product candidate is in late-stage Phase 3 development, with an NDA projected
for the first quarter of 2010, and each of our other product candidates is at an earlier stage of
development. Each of our product candidates will be unsuccessful if it:
•
does not demonstrate acceptable safety and efficacy in preclinical studies and clinical
trials or otherwise does not meet applicable regulatory standards for approval;
•
does not offer therapeutic or other improvements over existing or future drugs used to
treat the same or similar conditions;
•
is not capable of being produced in commercial quantities at an acceptable cost, or at
all; or
•
is not accepted by patients, the medical community or third party payors.
Our ability to generate product revenue in the future is dependent on the successful development
and commercialization
of our
product candidates. We have not proven our ability to develop and
commercialize
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products. Problems frequently encountered in connection with the development and
utilization of new and unproven technologies and the competitive environment in which we operate
might limit our ability to develop commercially successful products. We do not expect any of our
current product candidates to be commercially available before 2011, if at all. If we are unable to
make our product candidates commercially available, we will not generate product revenues, and we
will not be successful.
We will need substantial additional capital in the future. If additional capital is not available,
we will have to delay, reduce or cease operations.
We will need to raise additional capital to fund our operations, to develop our product candidates
and to develop our manufacturing capabilities. Our future capital requirements will be substantial
and will depend on many factors including:
•
the scope, rate of progress, results and costs of our preclinical studies, clinical
trials and other research and development activities, and our manufacturing development and
commercial manufacturing activities;
•
our ability to draw on our equity line of credit with Azimuth Opportunity, Ltd.
("Azimuth");
•
the cost, timing and outcomes of regulatory proceedings;
•
the cost and timing of developing sales and marketing capabilities prior to receipt of
any regulatory approval of our product candidates;
•
the cost and timing of developing manufacturing capacity;
•
revenues received from any future products;
•
payments received under any future strategic partnerships;
•
the filing, prosecution and enforcement of patent claims; and
•
the costs associated with commercializing our product candidates, if they receive
regulatory approval.
We believe that with current cash, cash equivalents and marketable securities along with interest
earned thereon, the proceeds from option exercises, and purchases of common stock pursuant to our
Employee Stock Purchase Plan, we will be able to maintain our currently planned operations through
the first quarter of 2010. Changing circumstances may cause us to consume capital significantly
faster or slower than we currently anticipate. We have based these estimates on assumptions that
may prove to be wrong, and we could utilize our available financial resources sooner than we
currently expect. The key assumptions underlying these estimates include:
•
expenditures related to continued preclinical and clinical development of our lead
product candidates during this period within budgeted levels;
•
no unexpected costs related to the development of our manufacturing capability; and
•
no growth in the number of our employees during this period.
We may never be able to generate a sufficient amount of product revenue to cover our expenses.
Until we do, we expect to finance our future cash needs through public or private equity offerings,
debt financings, strategic partnerships or licensing arrangements, as well as interest income
earned on cash and marketable securities balances and proceeds from stock option exercises and
purchases under our Employee Stock Purchase Plan. Any
financing transaction may contain unfavorable terms. As a result of the late filing of a current
report on Form 8-K, we are currently ineligible to use Form S-3 to register
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securities for sale by
us or for resale by other security holders until we have timely filed all required reports under
the Securities Exchange Act of 1934 for at least 12 calendar months (at the earliest April 2010).
In the meantime, for capital raising transactions, we must use Form S-1 to register securities with
the SEC, or issue such securities in a private placement, which could increase the costs and
adversely impact our ability to raise capital in a timely manner during this period. By raising
additional funds by issuing equity securities, our stockholders' equity is diluted. If we raise
additional funds through strategic partnerships, we may be required to relinquish rights to our
product candidates or technologies, or to grant licenses on terms that are not favorable to us.
Unstable market conditions may have serious adverse consequences on our business.
The recent economic downturn and market instability has made the business climate more volatile and
more costly. Our general business strategy may be adversely affected by unpredictable and unstable
market conditions. If the current equity and credit markets deteriorate further, or do not improve,
it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.
While we believe we have adequate capital resources to meet current working capital and capital
expenditure requirements through the first quarter of 2010, we may obtain additional financing on
less than attractive rates or on terms that are excessively dilutive to existing stockholders.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a
material adverse effect on our growth strategy, financial performance and stock price and could
require us to delay or abandon clinical development plans. There is a risk that one or more of our
current service providers, manufacturers and other partners may encounter difficulties during
challenging economic times, which would directly affect our ability to attain our operating goals
on schedule and on budget.
Unless our preclinical studies demonstrate the safety of our product candidates, we will not be
able to commercialize our product candidates.
To obtain regulatory approval to market and sell any of our product candidates, we must satisfy the
FDA and other regulatory authorities abroad, through extensive preclinical studies, that our
product candidates are safe. Our
Staccato
system creates condensation aerosol from drug compounds,
and there currently are no approved products that use a similar method of drug delivery. Companies
developing other inhalation products have not defined or successfully completed the types of
preclinical studies we believe will be required for submission to regulatory authorities as we seek
approval to conduct our clinical trials. We may not conduct the types of preclinical testing
eventually required by regulatory authorities, or the preclinical tests may indicate that our
product candidates are not safe for use in humans. Preclinical testing is expensive, can take many
years and have an uncertain outcome. In addition, success in initial preclinical testing does not
ensure that later preclinical testing will be successful. We may experience numerous unforeseen
events during, or as a result of, the preclinical testing process, which could delay or prevent our
ability to develop or commercialize our product candidates, including:
•
our preclinical testing may produce inconclusive or negative safety results, which may
require us to conduct additional preclinical testing or to abandon product candidates that
we believed to be promising;
•
our product candidates may have unfavorable pharmacology, toxicology or
carcinogenicity; and
•
our product candidates may cause undesirable side effects.
Any such events would increase our costs and could delay or prevent our ability to commercialize
our product candidates, which could adversely impact our business, financial condition and results
of operations.
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Preclinical studies indicated possible adverse impact of pulmonary delivery of AZ-001.
In our daily dosing animal toxicology studies of prochlorperazine, the active pharmaceutical
ingredient, or API, in AZ-001, we detected changes to, and increases of, the cells in the upper
airway of the test animals. The terms for these changes and increases are "squamous metaplasia" and
"hyperplasia," respectively. We also observed lung inflammation in some animals. These findings
occurred in daily dosing studies at doses that were proportionately substantially greater than any
dose we expect to continue to develop or commercialize. In subsequent toxicology studies of AZ-001
involving intermittent dosing consistent with its intended use, we detected lower incidence and
severity of the changes to, and increases of, the cells in the upper airway of the test animals
compared to the daily dosing results. We did not observe any lung inflammation with intermittent
dosing. During the second quarter of 2008, we completed a 28-day repeat dose inhalation study in
dogs. Consistent with previous findings in shorter-term and higher dose studies, we observed
dose-related minimal to slight squamous metaplasia in the upper respiratory tract, primarily in the
lining of the nasal passages, in all treated groups. No lower respiratory tract or lung findings
were reported. These findings suggest that the delivery of the pure drug compound of AZ-001 at the
proportionately higher doses used in daily dosing toxicology studies may cause adverse consequences
if we were to administer prochlorperazine chronically for prolonged periods of time. If we observe
these findings in our clinical trials of AZ-001, it could prevent further development or
commercialization of AZ-001.
Failure or delay in commencing or completing clinical trials for our product candidates could harm
our business.
To date, we have not completed all the clinical trials necessary to support an application with the
FDA for approval to market any of our product candidates. Current and planned clinical trials may
be delayed or terminated as a result of many factors, including:
•
delays or failure in reaching agreement on acceptable clinical trial contracts or
clinical trial protocols with prospective sites;
•
regulators or institutional review boards may not authorize us to commence a clinical
trial;
•
regulators or institutional review boards may suspend or terminate clinical research
for various reasons, including noncompliance with regulatory requirements or concerns about
patient safety;
•
we may suspend or terminate our clinical trials if we believe that they expose the
participating patients to unacceptable health risks;
•
we may experience slower than expected patient enrollment or lack of a sufficient
number of patients that meet the enrollment criteria for our clinical trials;
•
patients may not complete clinical trials due to safety issues, side effects,
dissatisfaction with the product candidate, or other reasons;
•
we may have difficulty in maintaining contact with patients after treatment, preventing
us from collecting the data required by our study protocol;
•
product candidates may demonstrate a lack of efficacy during clinical trials;
•
we may experience governmental or regulatory delays, failure to obtain regulatory
approval or changes in regulatory requirements, policy and guidelines; and
•
we may experience delays in our ability to manufacture clinical trial materials in a
timely manner as a result of ongoing process and design enhancements to our
Staccato
system.
Any delay in commencing or completing clinical trials for our product candidates would delay
commercialization of our product candidates and harm our business, financial condition and results
of operations. It is possible that none
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of our product candidates will successfully complete
clinical trials or receive regulatory approval, which would severely harm our business, financial
condition and results of operations.
Continuing development of our single dose version device may delay regulatory submissions and
marketing approval for AZ-004
Our clinical studies to date for our AZ-004, AZ-001, AZ-104, AZ-002 and AZ-007 product candidates
have been completed using a version of our single dose
Staccato
device we refer to as the chemical
single dose, or CSD, device. We are developing a version of the CSD that is intended to cost less
to manufacture and is more scalable than the current version of CSD. We refer to the newer version
of this single dose device as the commercial production device, or CPD, version. The CPD
incorporates the same basic chemical heat package and electronics as the CSD. We have conducted a
bioequivalence study in normal volunteers using the CSD and the CPD versions of the device to
determine if the drug dose dispensed by the two devices is bioequivalent. The FDA is reviewing the
results of this study. If the FDA determines that the results of the bioequivalence study and the
available analytical data do not support the bioequivalency, or if the FDA or foreign regulatory
authorities determine the CPD is unacceptable for any other reason, we may be required to conduct
additional clinical research for AZ-004 with the CPD version of the device. Conducting an
additional Phase 3 clinical trial could delay the filing of an NDA, which could also delay any
potential marketing approval in the United States.
If our product candidates do not meet safety and efficacy endpoints in clinical trials, they will
not receive regulatory approval, and we will be unable to market them.
Our product candidates are in preclinical and clinical development and have not received regulatory
approval from the FDA or any foreign regulatory authority. The clinical development and regulatory
approval process is extremely expensive and takes many years. The timing of any approval cannot be
accurately predicted. If we fail to obtain regulatory approval for our current or future product
candidates, we will be unable to market and sell them and therefore we may never be profitable.
As part of the regulatory process, we must conduct clinical trials for each product candidate to
demonstrate safety and efficacy to the satisfaction of the FDA and other regulatory authorities
abroad. The number and design of clinical trials that will be required varies depending on the
product candidate, the condition being evaluated, the trial results and regulations applicable to
any particular product candidate. In June 2008, we announced that our Phase 2a proof-of-concept
clinical trial of AZ-002 (
Staccato
Alprazolam) did not meet either of its two primary endpoints.
Prior clinical trial program designs and results are not necessarily predictive of future clinical
trial designs or results. Initial results may not be confirmed upon full analysis of the detailed
results of a trial. Product candidates in later stage clinical trials may fail to show the desired
safety and efficacy despite having progressed through initial clinical trials with acceptable
endpoints.
If our product candidates fail to show a clinically significant benefit compared to placebo, they
will not be approved for marketing.
Device failure rates higher than we anticipate may result in clinical trials that do not meet their
specific efficacy endpoints. Device failures or improper device use by patients may impact the
results of future trials. The design of our clinical trials is based on many assumptions about the
expected effect of our product candidates, and if those assumptions prove incorrect, the clinical
trials may not produce statistically significant results. Our
Staccato
system is not similar to
other approved drug delivery methods, there is no clear precedent for the application of detailed
regulatory requirements to our product candidates. We cannot assure you that the design of, or data
collected from, the clinical trials of our product candidates will be sufficient to support the FDA
and foreign regulatory approvals.
Regulatory authorities may not approve our product candidates even if they meet safety and efficacy
endpoints in clinical trials.
The FDA and other foreign regulatory agencies can delay, limit or deny marketing approval for many
reasons, including:
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•
a product candidate may not be considered safe or effective;
•
the manufacturing processes or facilities we have selected may not meet the applicable
requirements; and
•
changes in their approval policies or adoption of new regulations may require
additional work on our part.
Any delay in, or failure to receive or maintain, approval for any of our product candidates could
prevent us from ever generating meaningful revenues or achieving profitability.
Our product candidates may not be approved even if they achieve their endpoints in clinical trials.
Regulatory agencies, including the FDA, or their advisors may disagree with our trial design and
our interpretations of data from preclinical studies and clinical trials. Regulatory agencies may
change requirements for approval even after a clinical trial design has been approved. Regulatory
agencies also may approve a product candidate for fewer or more limited indications than requested
or may grant approval subject to the performance of post-marketing studies. In addition, regulatory
agencies may not approve the labeling claims that are necessary or desirable for the successful
commercialization of our product candidates.
Our product candidates will remain subject to ongoing regulatory review even if they receive
marketing approval. If we fail to comply with continuing regulations, we could lose these
approvals, and the sale of any future products could be suspended.
Even if we receive regulatory approval to market a particular product candidate, the FDA or a
foreign regulatory authority could condition approval on conducting additional costly post-approval
studies or could limit the scope of our approved labeling. Moreover, the product may later cause
adverse effects that limit or prevent its widespread use, force us to withdraw it from the market
or impede or delay our ability to obtain regulatory approvals in additional countries. In addition,
we will continue to be subject to FDA review and periodic inspections to ensure adherence to
applicable regulations. After receiving marketing approval, the FDA imposes extensive regulatory
requirements on the manufacturing, labeling, packaging, adverse event reporting, storage,
advertising, promotion and record keeping related to the product.
If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and
foreign regulatory authorities or previously unknown problems with any future products, suppliers
or manufacturing processes are discovered, we could be subject to administrative or judicially
imposed sanctions, including:
•
restrictions on the products, suppliers or manufacturing processes;
•
warning letters or untitled letters;
•
civil or criminal penalties or fines;
•
injunctions;
•
product seizures, detentions or import bans;
•
voluntary or mandatory product recalls and publicity requirements;
•
suspension or withdrawal of regulatory approvals;
•
total or partial suspension of production; and
•
refusal to approve pending applications for marketing approval of new drugs or
supplements to approved applications.
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If we do not produce our devices cost effectively, we will never be profitable.
Our
Staccato
system based product candidates contain electronic and other components in addition to
the active pharmaceutical ingredients. As a result of the cost of developing and producing these
components, the cost to produce our product candidates, and any approved products, will likely be
higher per dose than the cost to produce intravenous or oral tablet products. This increased cost
of goods may prevent us from ever selling any products at a profit. In addition, we are developing
single dose and multiple dose versions of our
Staccato
system. Developing multiple versions of our
Staccato
system may reduce or eliminate our ability to achieve manufacturing economies of scale. In
addition, developing multiple versions of our
Staccato
system reduces our ability to focus
development resources on each version, potentially reducing our ability to effectively develop any
particular version. We expect to continue to modify each of our product candidates throughout their
clinical development to improve their performance, dependability, manufacturability and quality.
Some of these modifications may require additional regulatory review and approval, which may delay
or prevent us from conducting clinical trials. The development and production of our technology
entail a number of technical challenges, including achieving adequate dependability, that may be
expensive or time consuming to solve. Any delay in or failure to develop and manufacture any future
products in a cost effective way could prevent us from generating any meaningful revenues and
prevent us from becoming profitable.
We rely on third parties to conduct our preclinical studies and our clinical trials. If these third
parties do not perform as contractually required or expected, we may not be able to obtain
regulatory approval for our product candidates, or we may be delayed in doing so.
We do not have the ability to conduct preclinical studies or clinical trials independently for our
product candidates. We must rely on third parties, such as contract research organizations, medical
institutions, academic institutions, clinical investigators and contract laboratories, to conduct
our preclinical studies and clinical trials. We are responsible for confirming that our preclinical
studies are conducted in accordance with applicable regulations and that each of our clinical
trials is conducted in accordance with its general investigational plan and protocol. The FDA
requires us to comply with regulations and standards, commonly referred to as good laboratory
practices, or GLP, for conducting and recording the results of our preclinical studies and good
clinical practices for conducting, monitoring, recording and reporting the results of clinical
trials, to assure that data and reported results are accurate and that the clinical trial
participants are adequately protected. Our reliance on third parties does not relieve us of these
responsibilities. If the third parties conducting our clinical trials do not perform their
contractual duties or obligations, do not meet expected deadlines, fail to comply with the FDA's
good clinical practice regulations, do not adhere to our clinical trial protocols or otherwise fail
to generate reliable clinical data, we may need to enter into new arrangements with alternative
third parties and our clinical trials may be extended, delayed or terminated or may need to be
repeated, and we may not be able to obtain regulatory approval for or commercialize the product
candidate being tested in such trials.
Problems with the third parties that manufacture the active pharmaceutical ingredients in our
product candidates may delay our clinical trials or subject us to liability.
We do not currently own or operate manufacturing facilities for clinical or commercial production
of the API used in any of our product candidates. We have no experience in drug manufacturing, and
we lack the resources and the capability to manufacture any of the APIs used in our product
candidates, on either a clinical or commercial scale. As a result, we rely on third parties to
supply the API used in each of our product candidates. We expect to continue to depend on third
parties to supply the API for our lead product candidates and any additional product candidates we
develop in the foreseeable future.
An API manufacturer must meet high precision and quality standards for that API to meet regulatory
specifications and comply with regulatory requirements. A contract manufacturer is subject to
ongoing periodic unannounced inspection by the FDA and corresponding state and foreign authorities
to ensure strict compliance with current good manufacturing practice, or cGMP, and other applicable
government regulations and corresponding foreign standards. Additionally, a contract manufacturer
must pass a pre-approval inspection by the FDA to ensure strict compliance with cGMP prior to the
FDA's approval of any product candidate for marketing. A contract manufacturer's failure to conform
with cGMP could result in the FDA's refusal to approve or a delay in the FDA's
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approval of a
product candidate for marketing. We are ultimately responsible for confirming that the APIs used in
our product candidates are manufactured in accordance with applicable regulations.
Our third party suppliers may not carry out their contractual obligations or meet our deadlines. In
addition, the API they supply to us may not meet our specifications and quality policies and
procedures. If we need to find alternative suppliers of the API used in any of our product
candidates, we may not be able to contract for such supplies on acceptable terms, if at all. Any
such failure to supply or delay caused by such contract manufacturers would have an adverse effect
on our ability to continue clinical development of our product candidates or commercialize any
future products.
If our third party drug suppliers fail to achieve and maintain high manufacturing standards in
compliance with cGMP regulations, we could be subject to certain product liability claims in the
event such failure to comply resulted in defective products that caused injury or harm.
If we experience problems with the manufacturers of components of our product candidates, our
development programs may be delayed or we may be subject to liability.
We outsource the manufacturing of some of the components of our
Staccato
system, including the
printed circuit boards and the plastic airways, and we will outsource the manufacturing of the
chemical heat packages to be used in our commercial single dose device. We have no experience in
the manufacturing of components (other than our current chemical heat packages), and we currently
lack the resources and the capability to manufacture them, on either a clinical or commercial
scale. As a result, we rely on third parties to supply these components. We expect to continue to
depend on third parties to supply these components for our current product candidates and any
devices based on the Staccato system we develop in the foreseeable future.
The third party suppliers of the components of our Staccato system must meet high precision and
quality standards for those components to comply with regulatory requirements. A contract
manufacturer is subject to ongoing periodic unannounced inspection by the FDA and corresponding
state and foreign authorities to ensure strict compliance with the FDA's Quality System Regulation,
or QSR, which sets forth the FDA's current good manufacturing practice requirements for medical
devices and their components, and other applicable government regulations and corresponding foreign
standards. We are ultimately responsible for confirming that the components used in the Staccato
system are manufactured in accordance with the QSR or other applicable regulations.
Our third party suppliers may not comply with their contractual obligations or meet our deadlines,
or the components they supply to us may not meet our specifications and quality policies and
procedures. If we need to find alternative suppliers of the components used in the
Staccato
system,
we may not be able to contract for such components on acceptable terms, if at all. Any such failure
to supply or delay caused by such contract manufacturers would have an adverse affect on our
ability to continue clinical development of our product candidates or commercialize any future
products.
In addition, the heat packages used in the single dose version of our
Staccato
system are
manufactured using certain energetic, or highly combustible, materials that are used to generate
the rapid heating necessary for vaporizing the drug compound while avoiding degradation.
Manufacture of products containing these types of materials is regulated by the U.S. government. We
currently manufacture the heat packages that are being used in the devices used in our clinical
trials. We have entered into a supply agreement with Autoliv for the manufacture of the heat
packages in the commercial design of our single dose version of our
Staccato
system. If we are
unable to
manufacture the heat packages used in our ongoing clinical trials or if in the future Autoliv is
unable to manufacture the heat packages to our specifications, or does not carry out its
contractual obligations to supply our heat packages to us, our clinical trials may be delayed,
suspended or terminated while we seek additional suitable manufacturers of our heat packages, which
may prevent us from commercializing our product candidates that utilize the single dose version of
the
Staccato
system.
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If we do not establish additional strategic partnerships, we will have to undertake development and
commercialization efforts on our own, which would be costly and delay our ability to commercialize
any future products.
A key element of our business strategy is our intent to selectively partner with pharmaceutical,
biotechnology and other companies to obtain assistance for the development and potential
commercialization of our product candidates. In December 2006, we entered into such a development
relationship with Symphony Allegro, Inc. ("Symphony Allegro"), and in December 2007 we entered into
a strategic relationship with Endo Pharmaceuticals, Inc. for the development of AZ-003. In January
2009, we mutually agreed with Endo to terminate our agreement. In June 2009, we amended the terms
of our arrangement with Symphony Allegro, resulting in our acquisition of Symphony Allegro and the
termination of that arrangement in August 2009. We intend to enter into additional strategic
partnerships with third parties to develop and commercialize our product candidates that are
intended for larger markets, and we may enter into strategic partnerships for product candidates
that are targeted toward specialty markets. To date, other than Symphony Allegro and Endo, we have
not entered into any strategic partnerships for any of our product candidates. We face significant
competition in seeking appropriate strategic partners, and these strategic partnerships can be
intricate and time consuming to negotiate and document. We may not be able to negotiate strategic
partnerships on acceptable terms, or at all. We are unable to predict when, if ever, we will enter
into any additional strategic partnerships because of the numerous risks and uncertainties
associated with establishing strategic partnerships. If we are unable to negotiate additional
strategic partnerships for our product candidates we may be forced to curtail the development of a
particular candidate, reduce or delay its development program or one or more of our other
development programs, delay its potential commercialization, reduce the scope of our sales or
marketing activities or undertake development or commercialization activities at our own expense.
In addition, we will bear all the risk related to the development of that product candidate. If we
elect to increase our expenditures to fund development or commercialization activities on our own,
we may need to obtain additional capital, which may not be available to us on acceptable terms, or
at all. If we do not have sufficient funds, we will not be able to bring our product candidates to
market and generate product revenue.
If we enter into additional strategic partnerships, we may be required to relinquish important
rights to and control over the development of our product candidates or otherwise be subject to
terms unfavorable to us.
For any strategic partnerships with pharmaceutical or biotechnology companies we will be subject to
a number of risks, including:
•
we may not be able to control the amount and timing of resources that our strategic
partners devote to the development or commercialization of product candidates;
•
strategic partners may delay clinical trials, provide insufficient funding, terminate a
clinical trial or abandon a product candidate, repeat or conduct new clinical trials or
require a new version of a product candidate for clinical testing;
•
strategic partners may not pursue further development and commercialization of products
resulting from the strategic partnering arrangement or may elect to discontinue research
and development programs;
•
strategic partners may not commit adequate resources to the marketing and distribution
of any future products, limiting our potential revenues from these products;
•
disputes may arise between us and our strategic partners that result in the delay or
termination of the research, development or commercialization of our product candidates or
that result in costly litigation or arbitration that diverts management's attention and
consumes resources;
•
strategic partners may experience financial difficulties;
•
strategic partners may not properly maintain or defend our intellectual property rights
or may use our proprietary information in a manner that could jeopardize or invalidate our
proprietary information or expose us to potential litigation;
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•
business combinations or significant changes in a strategic partner's business strategy
may also adversely affect a strategic partner's willingness or ability to complete its
obligations under any arrangement;
•
strategic partners could independently move forward with a competing product candidate
developed either independently or in collaboration with others, including our competitors;
and
•
strategic partners could terminate the arrangement or allow it to expire, which would
delay the development and may increase the cost of developing our product candidates.
If we fail to gain market acceptance among physicians, patients, third-party payors and the medical
community, we will not become profitable.
The
Staccato
system is a fundamentally new method of drug delivery. Any future product based on our
Staccato
system may not gain market acceptance among physicians, patients, third-party payors and
the medical community. If these products do not achieve an adequate level of acceptance, we will
not generate sufficient product revenues to become profitable. The degree of market acceptance of
any of our product candidates, if approved for commercial sale, will depend on a number of factors,
including:
•
demonstration of efficacy and safety in clinical trials;
•
the existence, prevalence and severity of any side effects;
•
potential or perceived advantages or disadvantages compared to alternative treatments;
•
perceptions about the relationship or similarity between our product candidates and the
parent drug compound upon which each product candidate is based;
•
the timing of market entry relative to competitive treatments;
•
the ability to offer any future products for sale at competitive prices;
•
relative convenience, product dependability and ease of administration;
•
the strength of marketing and distribution support;
•
the sufficiency of coverage and reimbursement of our product candidates by governmental
and other third-party payors; and
•
the product labeling or product insert required by the FDA or regulatory authorities in
other countries.
Our pipeline may be limited by the number of drug compounds suitable for use with the Staccato
system.
The current versions of the
Staccato
system cannot deliver large molecule drugs, such as peptides
and proteins. In addition, the physical size of the metal substrates in the single dose and
multiple dose versions of the
Staccato
system limits their use to drugs that require dose amounts
less than 10 to 15 milligrams and 100 to 200 micrograms, respectively. Further, approximately 200
of the 400 small molecule compounds we have screened for initial vaporization feasibility did not
form drug aerosols with the 97% purity we use as an internal standard for further development.
There are also many drug compounds that are covered by composition of matter patents that prevent
us from developing the compound in the
Staccato
system without a license from the patent owner,
which
may not be available on acceptable terms, if at all. If we are not able to identify additional drug
compounds that can be developed with the
Staccato
system, we may not develop enough products to
develop a sustainable business.
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AZ-001 and other product candidates that we may develop may require expensive carcinogenicity
tests.
The API in AZ-001, prochlorperazine, was approved by the FDA in 1956 for the treatment of severe
nausea and vomiting. At that time, the FDA did not require the carcinogenicity testing that is now
generally required for marketing approval. It is unclear whether we will be required to perform
such testing prior to filing our application for marketing approval of AZ-001 or whether we will be
allowed to perform such testing after we file an application. Such carcinogenicity testing will be
expensive and require significant additional resources to complete and may delay approval to market
AZ-001. We may encounter similar requirements with other product candidates incorporating drugs
that have not undergone carcinogenicity testing. Any carcinogenicity testing we are required to
complete will increase the costs to develop a particular product candidate and may delay or halt
the development of such product candidate.
If some or all of our patents expire, are invalidated or are unenforceable, or if some or all of
our patent applications do not yield issued patents or yield patents with narrow claims,
competitors may develop competing products using our or similar intellectual property and our
business will suffer.
Our success will depend in part on our ability to obtain and maintain patent and trade secret
protection for our technologies and product candidates both in the United States and other
countries. We do not know whether any patents will issue from any of our pending or future patent
applications. In addition, a third party may successfully circumvent our patents. Our rights under
any issued patents may not provide us with sufficient protection against competitive products or
otherwise cover commercially valuable products or processes.
The degree of protection for our proprietary technologies and product candidates is uncertain
because legal means afford only limited protection and may not adequately protect our rights or
permit us to gain or keep our competitive advantage. For example:
•
we might not have been the first to make the inventions covered by each of our pending
patent applications and issued patents;
•
we might not have been the first to file patent applications for these inventions;
•
others may independently develop similar or alternative technologies or duplicate any
of our technologies;
•
it is possible that none of our pending patent applications will result in issued
patents;
•
the claims of our issued patents may be narrower than as filed and not sufficiently
broad to prevent third parties from circumventing them;
•
we may not develop additional proprietary technologies or drug candidates that are
patentable;
•
our patent applications or patents may be subject to interference, opposition or
similar administrative proceedings;
•
any patents issued to us or our potential strategic partners may not provide a basis
for commercially viable products or may be challenged by third parties in the course of
litigation or administrative proceedings such as reexaminations or interferences; and
•
the patents of others may have an adverse effect on our ability to do business.
Even if valid and enforceable patents cover our product candidates and technologies, the patents
will provide protection only for a limited amount of time.
Our and our potential strategic partners' ability to obtain patents is uncertain because, to date,
some legal principles remain unresolved, there has not been a consistent policy regarding the
breadth or interpretation of claims allowed in patents in the United States, and the specific
content of patents and patent applications that are necessary to
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support and interpret patent
claims is highly uncertain due to the complex nature of the relevant legal, scientific and factual
issues. Furthermore, the policies governing pharmaceutical and medical device patents outside the
United States may be even more uncertain. Changes in either patent laws or interpretations of
patent laws in the United States and other countries may diminish the value of our intellectual
property or narrow the scope of our patent protection.
Even if patents are issued regarding our product candidates or methods of using them, those patents
can be challenged by our competitors who can argue that our patents are invalid and/or
unenforceable. Third parties may challenge our rights to, or the scope or validity of, our patents.
Patents also may not protect our product candidates if competitors devise ways of making these or
similar product candidates without legally infringing our patents. The Federal Food, Drug and
Cosmetic Act and the FDA regulations and policies provide incentives to manufacturers to challenge
patent validity or create modified, non-infringing versions of a drug or device in order to
facilitate the approval of generic substitutes. These same types of incentives encourage
manufacturers to submit new drug applications that rely on literature and clinical data not
prepared for or by the drug sponsor.
We also rely on trade secrets to protect our technology, especially where we do not believe that
patent protection is appropriate or obtainable. However, trade secrets are difficult to protect.
The employees, consultants, contractors, outside scientific collaborators and other advisors of our
company and our strategic partners may unintentionally or willfully disclose our confidential
information to competitors. Enforcing a claim that a third party illegally obtained and is using
our trade secrets is expensive and time consuming and the outcome is unpredictable. Failure to
protect or maintain trade secret protection could adversely affect our competitive business
position.
Our research and development collaborators may have rights to publish data and other information in
which we have rights. In addition, we sometimes engage individuals or entities to conduct research
that may be relevant to our business. The ability of these individuals or entities to publish or
otherwise publicly disclose data and other information generated during the course of their
research is subject to certain contractual limitations. These contractual provisions may be
insufficient or inadequate to protect our trade secrets and may impair our patent rights. If we do
not apply for patent protection prior to such publication or if we cannot otherwise maintain the
confidentiality of our technology and other confidential information, then our ability to receive
patent protection or protect our proprietary information may be jeopardized.
Litigation or other proceedings or third party claims of intellectual property infringement could
require us to spend time and money and could shut down some of our operations.
Our commercial success depends in part on not infringing patents and proprietary rights of third
parties. Others have filed, and in the future are likely to file, patent applications covering
products that are similar to our product candidates, as well as methods of making or using similar
or identical products. If these patent applications result in issued patents and we wish to use the
claimed technology, we would need to obtain a license from the third party. We may not be able to
obtain these licenses at a reasonable cost, if at all.
In addition, administrative proceedings, such as interferences and reexaminations before the U.S.
Patent and Trademark Office, could limit the scope of our patent rights. We may incur substantial
costs and diversion of management and technical personnel as a result of our involvement in such
proceedings. In particular, our patents and patent applications may be subject to interferences in
which the priority of invention may be awarded to a third party. We do not know whether our patents
and patent applications would be entitled to priority over patents or patent applications held by
such a third party. Our issued patents may also be subject to reexamination proceedings. We do not
know whether our patents would survive reexamination in light of new questions of patentability
that may be raised following their issuance.
Third parties may assert that we are employing their proprietary technology or their proprietary
products without authorization. In addition, third parties may already have or may obtain patents
in the future and claim that use of our technologies or our products infringes these patents. We
could incur substantial costs and diversion of management and technical personnel in defending our
self against any of these claims. Furthermore, parties making claims against us may be able to
obtain injunctive or other equitable relief, which could effectively block our ability to further
develop, commercialize and sell any future products and could result in the award of substantial
damages
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against us. In the event of a successful claim of infringement against us, we may be
required to pay damages and obtain one or more licenses from third parties. We may not be able to
obtain these licenses at a reasonable cost, if at all. In that event, we could encounter delays in
product introductions while we attempt to develop alternative methods or products. In the event we
cannot develop alternative methods or products, we may be effectively blocked from developing,
commercializing or selling any future products. Defense of any lawsuit or failure to obtain any of
these licenses would be expensive and could prevent us from commercializing any future products.
We review from time to time publicly available information concerning the technological development
efforts of other companies in our industry. If we determine that these efforts violate our
intellectual property or other rights, we intend to take appropriate action, which could include
litigation. Any action we take could result in substantial costs and diversion of management and
technical personnel in enforcing our patents or other intellectual property rights against others.
Furthermore, the outcome of any action we take to protect our rights may not be resolved in our
favor.
Competition in the pharmaceutical industry is intense. If our competitors are able to develop and
market products that are more effective, safer or less costly than any future products that we may
develop, our commercial opportunity will be reduced or eliminated.
We face competition from established as well as emerging pharmaceutical and biotechnology
companies, as well as from academic institutions, government agencies and private and public
research institutions. Our commercial opportunity will be reduced or eliminated if our competitors
develop and commercialize products that are safer, more effective, have fewer side effects or are
less expensive than any future products that we may develop and commercialize. In addition,
significant delays in the development of our product candidates could allow our competitors to
bring products to market before us and impair our ability to commercialize our product candidates.
We anticipate that, if approved, AZ-004 would compete with the available intramuscular, or IM,
injectable form and oral forms of loxapine and other forms of available antipsychotic drugs for the
treatment of agitation.
We anticipate that, if approved, AZ-001 and AZ-104 would compete with currently marketed triptan
drugs and with other migraine headache treatments, including intravenous, or IV, delivery of
prochlorperazine, the API in AZ-001. In addition, we are aware of at least 15 product candidates in
development for the treatment of migraines, including triptan products.
We anticipate that, if approved, AZ-003 would compete with some of the available forms of fentanyl,
including injectable fentanyl, oral transmucosal fentanyl formulations and ionophoretic transdermal
delivery of fentanyl. We are also aware of three fentanyl products under review by regulatory
agencies either in the United States or abroad, and at least 19 products in Phase 3 clinical trial
development for acute pain, seven of which are fentanyl products. There are two inhaled forms of
fentanyl products that are in Phase 2 development. In addition, if approved, AZ-003 would compete
with various generic opioid drugs, such as oxycodone, hydrocodone and morphine, or combination
products including one or more of such drugs.
We anticipate that, if approved, AZ-007 would compete with non-benzodiazepine GABA-A receptor
agonists, which include Ambien
®
(immediate release and controlled-release tablets),
Sonata
®
, and Lunesta
®
. We are also aware of more than 10 generic versions of
zolpidem (brand Ambien) oral tablets and one zaleplon (brand Sonata) that have been tentatively
approved by the FDA, as well as at least five insomnia products that are under review by the FDA.
Additionally, we are aware of three products in Phase 3 development for the treatment of insomnia.
We anticipate that, if approved, AZ-002 would compete with the oral tablet form of alprazolam and
possibly intravenous and oral forms of other benzodiazepines.
Many of our competitors have significantly greater financial resources and expertise in research
and development, manufacturing, preclinical testing, conducting clinical trials, obtaining
regulatory approvals and marketing approved products than we do. Established pharmaceutical
companies may invest heavily to discover quickly and develop novel compounds or drug delivery
technology that could make our product candidates obsolete. Smaller or early stage companies may
also prove to be significant competitors, particularly through strategic partnerships with large
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and established companies. In addition, these third parties compete with us in recruiting and
retaining qualified scientific and management personnel, establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring technologies and technology
licenses complementary to our programs or advantageous to our business. Accordingly, our
competitors may succeed in obtaining patent protection, receiving FDA approval or discovering,
developing and commercializing products before we do. If we are not able to compete effectively
against our current and future competitors, our business will not grow and our financial condition
will suffer.
If we are unable to establish sales and marketing capabilities or enter into agreements with third
parties to market and sell our product candidates, we may be unable to generate significant product
revenue.
We have conducted a comprehensive strategic marketing review and developed our initial launch
strategy for our lead product candidate, AZ-004. We do not have a sales organization and have no
experience in the sales and distribution of pharmaceutical products. There are risks involved with
establishing our own sales capabilities and increasing our marketing capabilities, as well as
entering into arrangements with third parties to perform these services. Developing an internal
sales force is expensive and time consuming and could delay any product launch. On the other hand,
if we enter into arrangements with third parties to perform sales, marketing and distribution
services, our product revenues or the profitability of these product revenues are likely to be
lower than if we market and sell any products that we develop ourselves.
We may establish our own specialty sales force and/or engage pharmaceutical or other healthcare
companies with an existing sales and marketing organization and distribution systems to sell,
market and distribute any future products. We may not be able to establish a specialty sales force
or establish sales and distribution relationships on acceptable terms. Factors that may inhibit our
efforts to commercialize any future products without strategic partners or licensees include:
•
our inability to recruit and retain adequate numbers of effective sales and marketing
personnel;
•
the inability of sales personnel to obtain access to or persuade adequate numbers of
physicians to prescribe any future products;
•
the lack of complementary products to be offered by sales personnel, which may put us
at a competitive disadvantage relative to companies with more extensive product lines; and
•
unforeseen costs and expenses associated with creating an independent sales and
marketing organization.
Because the establishment of sales and marketing capabilities depends on the progress towards
commercialization of our product candidates and because of the numerous risks and uncertainties
involved with establishing our own sales and marketing capabilities, we are unable to predict when,
if ever, we will establish our own sales and marketing capabilities. If we are not able to partner
with a third party and are unsuccessful in recruiting sales and marketing personnel or in building
a sales and marketing infrastructure, we will have difficulty commercializing our product
candidates, which would adversely affect our business and financial condition.
If we lose our key personnel or are unable to attract and retain additional personnel, we may be
unable to develop or commercialize our product candidates.
We are highly dependent on our President and Chief Executive Officer, Thomas B. King, the loss of
whose services might adversely impact the achievement of our objectives. In addition, recruiting
and retaining qualified clinical, scientific and engineering personnel to manage clinical trials of
our product candidates and to perform future research and development work will be critical to our
success. There is currently a shortage of skilled executives in our industry, which is likely to
continue. As a result, competition for skilled personnel is intense and the turnover rate can be
high. Although we believe we will be successful in attracting and retaining qualified personnel,
competition for experienced management and clinical, scientific and engineering personnel from
numerous companies and academic and other research institutions may limit our ability to do so on
acceptable terms. In addition, we do not have employment agreements with any of our employees, and
they could leave our employment at will. We have change of control agreements with our executive
officers and vice presidents that provide for
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certain benefits upon termination or a change in role
or responsibility in connection with a change of control of our company. We do not maintain life
insurance policies on any employees. Failure to attract and retain personnel would prevent us from
developing and commercializing our product candidates.
If plaintiffs bring product liability lawsuits against us, we may incur substantial liabilities and
may be required to limit commercialization of the product candidates that we may develop.
We face an inherent risk of product liability as a result of the clinical testing of our product
candidates in clinical trials and will face an even greater risk if we commercialize any products.
We may be held liable if any product we develop causes injury or is found otherwise unsuitable
during product testing, manufacturing, marketing or sale. Regardless of merit or eventual outcome,
liability claims may result in decreased demand for any product candidates or products that we may
develop, injury to our reputation, withdrawal of clinical trials, costs to defend litigation,
substantial monetary awards to clinical trial participants or patients, loss of revenue and the
inability to commercialize any products that we develop. We have product liability insurance that
covers our clinical trials up to a $10 million aggregate annual limit. We intend to expand product
liability insurance coverage to include the sale of commercial products if we obtain marketing
approval for any products that we may develop. However, this insurance may be prohibitively
expensive, or may not fully cover our potential liabilities. Inability to obtain sufficient
insurance coverage at an acceptable cost or otherwise to protect against potential product
liability claims could prevent or delay the commercialization of our product candidates. If we are
sued for any injury caused by any future products, our liability could exceed our total assets.
Our product candidates AZ-002, AZ-003 and AZ-007 contain drug substances which are regulated by the
U.S. Drug Enforcement Administration. Failure to comply with applicable regulations could harm our
business.
The Controlled Substances Act imposes various registration, recordkeeping and reporting
requirements, procurement and manufacturing quotas, labeling and packaging requirements, security
controls and a restriction on prescription refills on certain pharmaceutical products. A principal
factor in determining the particular requirements, if any, applicable to a product is its actual or
potential abuse profile. The U.S. Drug Enforcement Administration, or DEA, regulates chemical
compounds as Schedule I, II, III, IV or V substances, with Schedule I substances considered to
present the highest risk of substance abuse and Schedule V substances the lowest risk. Alprazolam,
the API in AZ-002, is regulated as a Schedule IV substance, fentanyl, the API in AZ-003, is
regulated as a Schedule II substance, and zaleplon, the API in AZ-007, is regulated as a Schedule
IV substance. Each of these product candidates is subject to DEA regulations relating to
manufacture, storage, distribution and physician prescription procedures, and the DEA regulates the
amount of the scheduled substance that would be available for clinical trials and commercial
distribution. As a Schedule II substance, fentanyl is subject to more stringent controls, including
quotas on the amount of product that can be manufactured as well as a prohibition on the refilling
of prescriptions without a new prescription from the physician. The DEA periodically inspects
facilities for compliance with its rules and regulations. Failure to comply with current and future
regulations of the DEA could lead to a variety of sanctions, including revocation, or denial of
renewal, or of DEA registrations, injunctions, or civil or criminal penalties and could harm our
business, financial condition and results of operations.
The single dose version of our Staccato system contains materials that are regulated by the U.S.
government, and failure to comply with applicable regulations could harm our business.
The single dose version of our
Staccato
system uses energetic materials to generate the rapid
heating necessary for vaporizing the drug, while avoiding degradation. Manufacture of products
containing energetic materials is controlled by the U.S. Bureau of Alcohol, Tobacco, Firearms and
Explosives, or ATF. Technically, the energetic materials used in our
Staccato
system are classified
as "low explosives," and the ATF has granted us a license/permit for the manufacture of such low
explosives. Additionally, due to inclusion of the energetic materials in our
Staccato
system, the
Department of Transportation, or DOT, regulates shipments of the single dose version of our
Staccato
system. The DOT has granted the single dose version of our
Staccato
system "Not Regulated
as an Explosive" status. Failure to comply with the current and future regulations of the ATF or
DOT could subject us to future liabilities and could harm our business, financial condition and
results of operations. Furthermore, these regulations could restrict our ability to expand our
facilities or construct new facilities or could require us to incur other significant expenses in
order to maintain compliance.
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We use hazardous chemicals and highly combustible materials in our business. Any claims relating to
improper handling, storage or disposal of these materials could be time consuming and costly.
Our research and development processes involve the controlled use of hazardous materials, including
chemicals. We also use energetic materials in the manufacture of the chemical heat packages that
are used in our single dose devices. Our operations produce hazardous waste products. We cannot
eliminate the risk of accidental contamination or discharge or injury from these materials.
Federal, state and local laws and regulations govern the use, manufacture, storage, handling and
disposal of these materials. We could be subject to civil damages in the event of an improper or
unauthorized release of, or exposure of individuals to, hazardous materials. In addition, claimants
may sue us for injury or contamination that results from our use or the use by third parties of
these materials and our liability may exceed our total assets. We maintain insurance for the use of
hazardous materials in the aggregate amount of $1 million, which may not be adequate to cover any
claims. Compliance with environmental and other laws and regulations may be expensive, and current
or future regulations may impair our research, development or production efforts.
Certain of our suppliers are working with these types of hazardous and highly combustible materials
in connection with our component manufacturing agreements. In the event of a lawsuit or
investigation, we could be held responsible for any injury caused to persons or property by
exposure to, or release of, these hazardous and highly combustible materials. Further, under
certain circumstances, we have agreed to indemnify our suppliers against damages and other
liabilities arising out of development activities or products produced in connection with these
agreements.
We will need to implement additional finance and accounting systems, procedures and controls in the
future as we grow and to satisfy new reporting requirements.
The laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley
Act of 2002, or Sarbanes-Oxley, and rules enacted and proposed by the SEC and by the NASDAQ Global
Market, will result in increased costs to us as we continue to undertake efforts to comply with
rules and respond to the requirements applicable to public companies. The rules make it more
difficult and costly for us to obtain certain types of insurance, including director and officer
liability insurance, and we may be forced to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage as compared to the polices
previously available to public companies. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board of directors or our
board committees or as executive officers.
As a public company, we need to comply with Sarbanes-Oxley and the related rules and regulations of
the SEC, including expanded disclosure, accelerated reporting requirements and more complex
accounting rules. Compliance with Section 404 of Sarbanes-Oxley and other requirements will
continue to increase our costs and require additional management resources. We have been upgrading
our finance and accounting systems, procedures and controls and will need to continue to implement
additional finance and accounting systems, procedures and controls as we grow to satisfy new
reporting requirements. We currently do not have an internal
audit group. In addition, we may need to hire additional legal and accounting staff with
appropriate experience and technical knowledge, and we cannot assure you that if additional
staffing is necessary that we will be able to do so in a timely fashion.
Our facilities are located near known earthquake fault zones, and the occurrence of an earthquake
or other catastrophic disaster could damage our facilities and equipment, which could cause us to
curtail or cease operations.
Our facilities are located in the San Francisco Bay Area near known earthquake fault zones and,
therefore, are vulnerable to damage from earthquakes. We are also vulnerable to damage from other
types of disasters, such as power loss, fire, floods and similar events. If any disaster were to
occur, our ability to operate our business could be seriously impaired. We currently may not have
adequate insurance to cover our losses resulting from disasters or other similar significant
business interruptions, and we do not plan to purchase additional insurance to cover such
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losses
due to the cost of obtaining such coverage. Any significant losses that are not recoverable under
our insurance policies could seriously impair our business, financial condition and results of
operations.
Risks Relating to Owning Our Common Stock
Our stock price has been and may continue to be extremely volatile.
Our common stock price has experienced large fluctuations since our initial public offering in
March 2006. In addition, the trading prices of life science and biotechnology company stocks in
general have experienced extreme price fluctuations in recent years. The valuations of many life
science companies without consistent product revenues and earnings are extraordinarily high based
on conventional valuation standards, such as price to revenue ratios. These trading prices and
valuations may not be sustained. Any negative change in the public's perception of the prospects of
life science or biotechnology companies could depress our stock price regardless of our results of
operations. Other broad market and industry factors may decrease the trading price of our common
stock, regardless of our performance. Market fluctuations, as well as general political and
economic conditions such as terrorism, military conflict, recession or interest rate or currency
rate fluctuations, also may decrease the trading price of our common stock. In addition, our stock
price could be subject to wide fluctuations in response to various factors, including:
•
actual or anticipated results and timing of our clinical trials;
•
actual or anticipated regulatory approvals of our product candidates or competing
products;
•
changes in laws or regulations applicable to our product candidates;
•
changes in the expected or actual timing of our development programs, including delays
or cancellations of clinical trials for our product candidates;
•
period to period fluctuations in our operating results;
•
announcements of new technological innovations or new products by us or our
competitors;
•
changes in financial estimates or recommendations by securities analysts;
•
conditions or trends in the life science and biotechnology industries;
•
changes in the market valuations of other life science or biotechnology companies;
•
developments in domestic and international governmental policy or regulations;
•
announcements by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
•
additions or departures of key personnel;
•
disputes or other developments relating to proprietary rights, including patents,
litigation matters and our ability to obtain patent protection for our technologies;
•
sales of our common stock (or other securities) by us, including sales under our equity
line of credit arrangement with Azimuth; and
•
sales and distributions of our common stock by our stockholders.
In the past, stockholders have often instituted securities class action litigation after periods of
volatility in the market price of a company's securities. If a stockholder files a securities class
action suit against us, we would incur
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substantial legal fees, and our management's attention and
resources would be diverted from operating our business in order to respond to the litigation.
If we sell shares of our common stock under our equity line of credit or in other future
financings, existing common stockholders will experience immediate dilution and, as a result, our
stock price may go down.
We will need to raise additional capital to fund our operations, to develop our product candidates
and to develop our manufacturing capabilities. We may obtain such financing through the sale of our
equity securities from time to time. As a result, our existing common stockholders will experience
immediate dilution upon any such issuance. For example, in March 2008, we entered into a common
stock purchase agreement with Azimuth, or the purchase agreement, which provides that, upon the
terms and subject to the conditions set forth in the purchase agreement, Azimuth is committed to
purchase up to $50 million of our common stock at times and in amounts determined by us. Our
existing common stockholders will experience immediate dilution upon the purchase of any shares of
our common stock by Azimuth pursuant to the purchase agreement.
Symphony Capital and Symphony Strategic Partners collectively control a substantial percentage of
the voting power of our outstanding common stock.
Symphony Capital and Symphony Strategic Partners currently collectively control approximately 6.7
million shares of our common stock and warrants to purchase approximately 3.4 million shares of our
common stock. Based on our currently outstanding shares of common stock, these stockholders own
approximately 15.5% of our total outstanding shares of common stock. If these stockholders exercise
the warrants to purchase approximately 3.4 million shares of our common stock described above in
full, assuming no other issuances of shares, based on our currently outstanding shares of common
stock, these stockholders would own approximately 21.6% of our total outstanding shares of our
common stock. Although these stockholders have entered into a standstill agreement with us, they
control more of our stock than any other group of stockholders, and Symphony Capital and Symphony
Strategic Partners will therefore be able to exercise substantial influence over any actions
requiring stockholder approval.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus or documents incorporated by reference
constitute forward-looking statements. In some cases, you can identify forward-looking statements
by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan,"
"anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing" or
the negative of these terms or other comparable terminology, although not all forward-looking
statements contain these words. Examples of these statements include, but are not limited to,
statements regarding: the prospects of us receiving approval to market AZ-004, our anticipated
timing for filing or receiving approval for our New Drug Application for AZ-004, the implications
of interim or final results of our clinical trials, the progress of our research programs,
including clinical testing, the extent to which our issued and pending patents may protect our
products and technology, the potential of such product candidates to lead to the development of
commercial products, our anticipated timing for initiation or completion of our clinical trials for
our product candidates, our future operating expenses, our future losses, our future expenditures
and the sufficiency of our cash resources. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from the information expressed or implied by these
forward-looking statements. While we believe that we have a reasonable basis for each
forward-looking statement contained in this prospectus, we caution you that these statements are
based on a combination of facts and factors currently known by us and our projections of the
future, about which we cannot be certain.
In addition, you should refer to the "Risk Factors" section of this prospectus for a
discussion of other important factors that may cause our actual results to differ materially from
those expressed or implied by our forward-looking statements. As a result of these factors, we
cannot assure you that the forward-looking statements in this prospectus or documents incorporated
by reference will prove to be accurate. Furthermore, if our forward-looking statements prove to be
inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these
forward-looking statements, you should not regard these statements as a representation or warranty
by us or any other person that we will achieve our objectives and plans in any specified time
frame, or at all. You should not place undue reliance on these forward-looking statements, which
apply only as of the date of this prospectus. You should read this prospectus and the documents
incorporated by reference completely and with the understanding that our actual future results may
be materially different from what we expect.
We undertake no obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and our website.
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DETERMINATION OF OFFERING PRICE
We are not selling any of the common stock that we are registering. The common stock will be
sold by the selling stockholders as detailed in this prospectus. Such selling stockholders may
sell the common stock at the market price as of the date of sale or a price negotiated in a private
sale. Our common stock is currently listed on the NASDAQ Global Market under the symbol "ALXA".
USE OF PROCEEDS
The selling stockholders will receive all of the net proceeds from sales of the common stock
sold pursuant to this prospectus. However, in the case of warrants issued to the selling
stockholders on August 26, 2009, upon exercise of the warrants for cash, the selling stockholders
would pay us an exercise price of $2.26 per share of common stock, or an aggregate of $11.3 million
if the warrants are exercised in full. We intend to use the net proceeds generated by warrant
exercises, if any, for general corporate purposes. We cannot estimate how many, if any, of the
warrants will be exercised as a result of this offering. We will bear all costs, expenses and fees
in connection with the registration of shares of our common stock to be sold by the selling
stockholders. The selling stockholders will bear all commissions and discounts, if any
attributable to their respective sales of shares.
DIVIDEND POLICY
We have never paid cash dividends on our common stock or any other securities. We anticipate
that we will retain all of our future earnings, if any, for use in the expansion and operation of
our business and do not anticipate paying cash dividends in the foreseeable future.
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MARKET PRICE OF OUR COMMON STOCK
Our common stock trades on the NASDAQ Global Market under the symbol "ALXA." As of August 31,
2009, there were 174 holders of record of our common stock. The following table sets forth, for
the periods indicated, the high and low sales prices of our common stock.
2009
High
Low
First Quarter
$
3.40
$
1.40
Second Quarter
3.25
1.50
Third Quarter (through September 8, 2009)
2.90
1.90
2008
High
Low
First Quarter
$
8.16
$
5.76
Second Quarter
7.55
3.75
Third Quarter
6.20
3.85
Fourth Quarter
4.91
1.16
2007
High
Low
First Quarter
$
15.80
$
8.52
Second Quarter
12.80
7.86
Third Quarter
10.10
7.11
Fourth Quarter
9.72
7.00
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SELLING STOCKHOLDERS
This prospectus covers the resale by the selling stockholders of up to 15,000,000 shares of
our common stock, including up to 5,000,000 shares issuable upon the exercise of warrants held by
such selling stockholders.
On December 1, 2006, we and Holdings entered into a transaction involving a series of related
agreements providing for the financing of additional clinical and nonclinical development of
AZ-002,
Staccato
alprazolam, and AZ-004/AZ-104,
Staccato
loxapine (the "Programs"). Pursuant to
these agreements, Symphony Capital and certain co-investors formed Symphony Allegro and invested
$50 million to fund additional clinical and nonclinical development of the Programs, and we
exclusively licensed to Symphony Allegro certain intellectual property rights related to the
Programs. We retained manufacturing rights to the Programs. We continued to be primarily
responsible for the development of the Programs in accordance with a development plan and related
development budgets that we agreed to with Holdings.
In connection with the transaction described above, Holdings granted to us an exclusive
purchase option that gave us the right, but not the obligation, to acquire all, but not less than
all, of the outstanding equity securities (the "Symphony Allegro Equity Securities") of Symphony
Allegro, which would result in our reacquisition of the intellectual property rights that we
licensed to Symphony Allegro (the "Original Purchase Option"). The Original Purchase Option would
have been exercisable for a price of $97.5 million as of June 15, 2009, which purchase price would
have increased quarterly by a predetermined amount up to $122.5 million if the Original Purchase
Option were exercised on December 1, 2010. If not exercised, the Original Purchase Option would
have expired on December 1, 2010. The exercise price of the Original Purchase Option could have
been paid in cash or in a combination of cash and our common stock, in our sole discretion,
provided that the common stock portion could not exceed 40% of the exercise price of the Original
Purchase Option or 10% of our common stock issued and outstanding as of the closing of our
acquisition of the Symphony Allegro Equity Securities pursuant to the Original Purchase Option. If
we paid a portion of the exercise price of the Original Purchase Option in shares of our common
stock, we would have been required to register such shares for resale under a resale registration
statement pursuant to the terms of a registration rights agreement. In exchange for the Original
Purchase Option, we granted Holdings warrants to purchase 2,000,000 shares of our common stock at
an exercise price of $9.91 per share pursuant to a warrant purchase agreement, and granted certain
registration rights to Holdings pursuant to a registration rights agreement.
On June 15, 2009, we, Holdings and Symphony Allegro entered into a series of related
agreements pursuant to which we agreed to amend the terms of the Original Purchase Option (as so
amended, the "Amended Purchase Option"). The Amended Purchase Option gave us the right, but not
the obligation, to acquire all, but not less than all, of the Symphony Allegro Equity Securities,
resulting in our reacquisition of the intellectual property rights that we licensed to Symphony
Allegro. We also exercised such purchase option on June 15, 2009. On August 26, 2009, in
connection with the closing of our acquisition of the Symphony Allegro Equity Securities pursuant
to the Amended Purchase Option, we (i) issued to the selling stockholders 10,000,000 shares of our
common stock and (ii) granted the selling stockholders, pursuant to a Warrant Purchase Agreement,
dated June 15, 2009, between us and Holdings, warrants to purchase an aggregate of 5,000,000 shares
of our common stock, at an exercise price of $2.26 per share (the "Warrants"). The Warrants are
exercisable for a term of five years from the date of issuance. The warrants to purchase 2,000,000
shares issued initially to Holdings on December 1, 2006 described above were cancelled concurrently
with the issuance of the Warrants. We have agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the 10,000,000 shares of
our common stock issued upon the closing of our acquisition of the Symphony Allegro Equity
Securities pursuant to the Amended Purchase Option and the 5,000,000 shares of our common stock
issuable upon exercise of the Warrants pursuant to the Amended and Restated Registration Rights
Agreement, dated as of June 15, 2009, between us and Holdings. In addition, Holdings is entitled to
receive payments from us equal to specified percentages of certain upfront, milestone, royalty,
profit sharing or similar payments received by us in respect of any agreement or arrangement with
any third party with respect to the development and/or commercialization of the Programs.
In connection with the closing of our acquisition of the Symphony Allegro Equity Securities
pursuant to the Amended Purchase Option, we, Holdings, Symphony Capital and Symphony Strategic
Partners (collectively with Holdings and Symphony Capital, the "Symphony Parties") entered into an
agreement pursuant to which we agreed
25.
Table of Contents
to nominate and use our commercially reasonable efforts to
cause to be elected and cause to remain as a director on our board of directors one individual
designated by the Symphony Parties, for so long as the Symphony Parties and their affiliates
beneficially own more than 10% of our total outstanding shares of common stock. The Symphony
Parties also agreed, for so long as the Symphony Parties and their affiliates beneficially own more
than 10% of our total outstanding shares of common stock, to certain limitations on their ability
to acquire additional Alexza securities, vote their shares or take certain actions intended to
influence control of us.
The table sets forth, as of September 9, 2009, (i) the name of each selling stockholder, (ii)
the number of shares of our common stock beneficially owned by each selling stockholder, (iii) the
maximum number of shares of our common stock that each selling stockholder can sell pursuant to
this prospectus assuming the exercise of all warrants held, (iv) the number of shares of our common
stock that will be beneficially owned by each selling stockholder assuming all of the shares they
are offering pursuant to this prospectus are sold, and (v) the percentage ownership of our
outstanding common stock that each selling stockholder will hold after the offering.
Although we have assumed for purposes of the table that each selling stockholder will sell all
of the shares offered by this prospectus, we are unaware of any present intent to sell such shares
and can give no assurance as to the actual number of shares that will be sold, if any.
Number of
Shares of
Number of
Common
Maximum
Shares
Stock
Number of
of Common Stock
Beneficially
Shares of
Beneficially
Percentage
Owned Before
Common
Owned After
Ownership
Offering
Stock to be
the
After
Name of Selling Stockholder
(1)(2)
Offered (2)
Offering (3)
Offering
Symphony Capital Partners, L.P.
9,421,114
9,421,114
0
*
Symphony Strategic Partners, LLC
664,886
664,886
0
*
Howard Hughes Medical Institute
1,954,147
1,395,000
559,147
1.3
%
Stormlaunch & Co. for the
benefit of Morgan Stanley
Private Markets Fund III LP
1,116,000
1,116,000
0
*
Sailorshell & Co. for the
benefit of Morgan Stanley AIP
Global Diversified Fund LP
502,200
502,200
0
*
Mellon Bank, N.A. as Trustee of
the Weyerhaeuser Company Master
Retirement Trust
627,750
627,750
0
*
Sailorpier & Co. for the
benefit of Aurora Cayman
Limited
195,300
195,300
0
*
26.
Table of Contents
Number of
Shares of
Number of
Common
Maximum
Shares
Stock
Number of
of Common Stock
Beneficially
Shares of
Beneficially
Percentage
Owned Before
Common
Owned After
Ownership
Offering
Stock to be
the
After
Name of Selling Stockholder
(1)(2)
Offered (2)
Offering (3)
Offering
Nuclear Electric Insurance Ltd.
111,600
111,600
0
*
Factory Mutual Insurance Company
111,600
111,600
0
*
Stormbay & Co. for the benefit
of Vijverpoort Huizen C.V.
83,700
83,700
0
*
Stormstar & Co. for the benefit
of Morgan Stanley Private
Markets Fund Employee Investors
III LP
41,850
41,850
0
*
Northlight Fund LP
279,000
279,000
0
*
RRD International, LLC
450,000
450,000
0
*
*
Less than 1%.
(1)
Beneficial ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of common stock which
can be acquired under options or warrants that are currently exercisable, or which will become
exercisable no later than 60 days after September 9, 2009, are deemed outstanding for the
purposes of computing the percentage of the person holding such options or warrants, but not
deemed outstanding for the purposes of computing the percentage of any other person. Except
as indicated by footnote and subject to community property laws where applicable, the persons
named in the table have sole voting and investment power with respect to all shares of common
stock shown beneficially owned by them.
(2)
Includes all shares issuable upon the exercise of warrants without regard to restrictions on
exercise.
(3)
Assumes sale of all shares available for sale under this prospectus and no further
acquisitions of shares by the selling stockholders.
27.
Table of Contents
PLAN OF DISTRIBUTION
We are registering the shares of our common stock offered in this prospectus on behalf of the
selling stockholders. The selling stockholders, which as used herein includes pledgees, donees,
transferees or other successors-in-interest selling shares received from the selling stockholders
as a gift, pledge, partnership distribution or other transfer after the date of this prospectus,
may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of our
common stock or interests in shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. The selling stockholders will
pay any brokerage commissions and similar selling expenses attributable to the sale of the shares.
We will pay other expenses relating to the preparation, updating and filing of this registration
statement. We will not receive any of the proceeds from the sale of the shares by the selling
stockholders. However, in the case of warrants issued to the selling stockholders on August 26,
2009, upon a cash exercise of the warrants by the selling stockholders, we will receive the
exercise price of $2.26 per share of our common stock exercised. If the warrants are exercised in a
cashless exercise, we will not receive any proceeds from the exercise of the warrants.
These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market price, at varying prices determined at the time of sale, or
at negotiated prices. To the extent any of the selling stockholders gift, pledge or otherwise
transfer the shares offered hereby, such transferees may offer and sell the shares from time to
time under this prospectus, provided that this prospectus has been amended under Rule 424(b)(3) or
other applicable provision of the Securities Act to include the name of such transferee in the list
of selling stockholders under this prospectus.
The selling stockholders may use any one or more of the following methods when disposing of
shares or interests therein, some of which may or may not involve broker-dealers acting as agent or
principal:
•
ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
•
block trades in which the broker-dealer will attempt to sell the shares as agent,
but may position and resell a portion of the block as principal to facilitate the
transaction;
•
purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;
•
an exchange distribution in accordance with the rules of the applicable exchange;
•
privately negotiated transactions;
•
short sales;
•
through the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
•
broker-dealers may agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share;
•
a combination of any such methods of sale; and
•
any other method permitted pursuant to applicable law.
The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of our common stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell the shares of our
common stock, from time to time, under this prospectus or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the
Securities Act, by amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this prospectus.
28.
Table of Contents
In connection with the sale of our common stock or interests therein, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of our common stock in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge our common stock to broker-dealers
that in turn may sell these securities. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The aggregate proceeds to the selling stockholders from the sale of our common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if any. Each
of the selling stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents.
The selling stockholders may effect transactions by selling shares of our common stock
directly to purchasers or to or through broker-dealers, which may act as agents or principals.
Such broker-dealers may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders and/or the purchasers of shares of our common stock for whom such
broker-dealers may act as agents or to whom they sell as principal, or both (which compensation as
to a particular broker-dealer might be in excess of customary commissions).
To the extent required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, may apply to sales of
shares in the market and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or amended from time to
time) available to the selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act, the Exchange Act and state securities laws, relating to the
registration of the shares offered by this prospectus.
We have agreed with the selling stockholders to keep the registration statement that includes
this prospectus effective until the earlier of (i) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the registration statement that
contains this prospectus and (ii) the date on which the selling stockholders may sell all of the
shares without restriction pursuant to Rule 144.
The selling stockholders and any broker dealers that act in connection with the sale of the
shares might be deemed to be "underwriters" as the term is defined in Section 2(11) of the
Securities Act. Consequently, any commissions received by these broker dealers and any profit on
the resale of the shares sold by them while acting as principals might be deemed to be underwriting
discounts or commissions under the Securities Act. Because the
29.
Table of Contents
selling stockholders may be deemed
to be "underwriters" as defined in Section 2(11) of the Securities Act, the selling stockholders
may be subject to the prospectus delivery requirements of the Securities Act.
The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the
criteria and conform to the requirements of that rule.
30.
Table of Contents
VALIDITY OF COMMON STOCK
The validity of our common stock being offered hereby will be passed upon for us by Cooley
Godward Kronish LLP, Broomfield, Colorado.
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, has audited our
consolidated financial statements included in our Current Report on Form 8-K dated September 9,
2009, and the effectiveness of our internal control over financial reporting as of December 31,
2008, as set forth in their reports, which are incorporated by reference in this prospectus and
elsewhere in the registration statement. Our consolidated financial statements are incorporated by
reference in reliance on Ernst & Young LLP's reports, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document we file with the SEC at the SEC's Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference room. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other information regarding issuers
that file electronically with the SEC, including Alexza. The SEC's Internet site can be found at
http://www.sec.gov.
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to another document that we have
filed separately with the SEC. You should read the information incorporated by reference because it
is an important part of this prospectus. We incorporate by reference the following information or
documents that we have filed with the SEC (Commission File No. 000-51820):
The following documents filed with the SEC are incorporated by reference in this prospectus:
•
Our current report on Form 8-K, filed with the SEC on January 20, 2009.
•
Our current report on Form 8-K, filed with the SEC on January 26, 2009.
•
Our current report on Form 8-K, filed with the SEC on February 2, 2009.
•
Our current report on Form 8-K, filed with the SEC on February 24, 2009.
•
Our current report on Form 8-K, filed with the SEC on February 26, 2009.
•
Our annual report on Form 10-K for the fiscal year ended December 31, 2008, filed
with the SEC on March 10, 2009.
•
Our definitive proxy statement on Schedule 14A, filed with the SEC on March 27,
2009.
•
Our current report on Form 8-K, filed with the SEC on March 27, 2009.
•
Our quarterly report on Form 10-Q for the quarter ended March 31, 2009, filed with
the SEC on May 11, 2009.
•
Our current report on Form 8-K, filed with the SEC on June 15, 2009.
31.
Table of Contents
•
Our amendment to quarterly report on Form 10-Q/A for the quarter ended March 31,
2009, filed with the SEC on June 19, 2009.
•
Our amendment to current report on Form 8-K/A, filed with the SEC on June 26, 2009.
•
Our amendment to current report on Form 8-K/A, filed with the SEC on June 26, 2009.
•
Our definitive proxy statement on Schedule 14A, filed with the SEC on July 27, 2009.
•
Our quarterly report on Form 10-Q for the quarter ended June 30, 2009, filed with
the SEC on August 5, 2009.
•
Our current report on Form 8-K, filed with the SEC on August 26, 2009.
•
Our current report on Form 8-K, filed with the SEC on September 9, 2009.
•
The description of our common stock set forth in our registration statement on Form
S-1, filed with the SEC on December 22, 2005, including any amendments thereto or
reports filed for the purpose of updating this transaction.
Any information in any of the foregoing documents will automatically be deemed to be modified
or superseded to the extent that information in this prospectus or in a later filed document that
is incorporated or deemed to be incorporated herein by reference modifies or replaces such
information.
We will furnish without charge to you, upon written or oral request, a copy of any or all of
the documents incorporated by reference, including exhibits to these documents. You should direct
any requests for documents to Alexza Pharmaceuticals, Inc., Attention: Corporate Secretary, 2091
Stierlin Court, Mountain View, California 94043. Our phone number is (650) 944-7000. In addition,
all of the documents incorporated by reference into this prospectus may be accessed via the
Internet at our website: http://www.alexza.com.
32.
Table of Contents
15,000,000 Shares
Alexza Pharmaceuticals, Inc.
Common Stock
PROSPECTUS
, 2009
Table of Contents
PART II
Information Not Required In Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses to be paid by the Registrant, other than the
underwriting discounts and commissions payable by the Registrant, in connection with the sale of
the common stock being registered. All amounts shown are estimates except for the SEC registration
fee.
AMOUNT
TO BE
PAID
SEC registration fee
$
2,151
Legal fees and expenses
45,000
Accounting fees and expenses
25,000
Miscellaneous expenses
5,000
Total
$
77,151
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits indemnification of officers,
directors and other corporate agents under certain circumstances and subject to certain
limitations. The Registrant's certificate of incorporation and bylaws provide that the Registrant
will indemnify its directors, officers, employees and agents to the full extent permitted by
Delaware General Corporation Law, including in circumstances in which indemnification is otherwise
discretionary under Delaware law. In addition, the Registrant has entered into indemnification
agreements with its directors and officers that require us, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service (other than
liabilities arising from willful misconduct of a culpable nature). The indemnification provisions
in the Registrant's certificate of incorporation and bylaws and the indemnification agreement
entered into between the Registrant and its directors may be sufficiently broad to permit
indemnification of its officers and directors for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act. The Registrant also maintains director and officer
liability insurance to insure its directors and officers against the cost of defense, settlement or
payment of a judgment under certain circumstances.
Item 15. Recent Sales of Unregistered Securities and Use of Proceeds.
Recent Sales of Unregistered Equity Securities
Between February 10, 2009, and March 27, 2009, the Registrant issued an aggregate of 14,699 shares
of common stock that were not registered under the Securities Act to employees pursuant to the
exercise of stock options for cash consideration with aggregate exercise proceeds of approximately
$18,800. As previously disclosed in "Risk Factors" above, the Registrant failed to timely file a
current report on Form 8-K in February 2009. As a result of the failure to timely file the report,
the Registrant's registration statement on Form S-8 was unavailable for registration of the shares
issued pursuant to the option exercises described above at the time of the exercises. Consequently,
the Registrant may be deemed to have inadvertently failed to register these shares. The failure to
register the shares issued pursuant to the option exercises was inadvertent, and the Registrant has
treated the shares issued under the option plan as outstanding for financial reporting purposes.
Consequently, the unregistered transactions do not represent additional dilution. In addition, the
Registrant believes that it has provided the employees exercising the options with the same
information they would have received if the registration statement had been available at the time
of exercise.
On August 26, 2009, the Registrant issued 10,000,000 shares of common stock and warrants to
purchase 5,000,000 shares of common stock at an exercise price of $2.26 per share to Symphony
Capital, Symphony Strategic Partners
and certain other investors of Holdings in connection with the Registrant's acquisition of the
Symphony Allegro Equity Securities from Holdings. These entities are collectively referred to as
the selling stockholders. The
II-1
Table of Contents
warrants are exercisable for a term of five years from the date of
issuance. The number of shares for which the warrants are exercisable and the associated exercise
prices are subject to certain adjustments as set forth in the warrants. In addition, upon certain
changes in control of the Registrant, the holder must either exercise the warrant or surrender the
warrant for a new warrant exercisable in return for shares of common stock of the surviving entity.
These shares of common stock and warrants were issued pursuant to the exemption from the
registration requirements of the Securities Act afforded by Section 4(2) of the Securities Act and
Rule 506 of Regulation D thereunder, as a transaction not involving a public offering. Pursuant to
a registration rights agreement with Holdings, the Registrant is obligated to file with the SEC a
registration statement for these shares of common stock and the shares of common stock underlying
the warrants and to use commercially reasonable efforts to cause the SEC to declare the
registration statement effective and to keep the registration statement effective.
Use of Proceeds from the Sale of Registered Securities
None.
II-2
Table of Contents
Item 16. Exhibits.
EXHIBIT INDEX
Exhibit
Number
Description of Document
3.5
Restated Certificate of Incorporation(1)
3.7
Amended and Restated Bylaws(1)
3.8
Amendment to Amended and Restated Bylaws(5)
4.1
Specimen Common Stock Certificate(1)
4.2
Second Amended and Restated Investors' Rights Agreement between Registrant and certain holders of Preferred
Stock dated November 5, 2004(1)
5.1
w
Opinion of Cooley Godward Kronish LLP
10.2
Form of Director/Officer Indemnification Agreement entered into between Registrant and each of its
directors and officers(9)*
10.3
Form of Change of Control Agreement(13)*
10.4
2005 Equity Incentive Plan(8)*
10.5
Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Equity
Incentive Plan(1)*
10.6
2005 Non-Employee Directors' Stock Option Plan(1)
10.7
Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Non-Employee
Directors' Stock Option Plan(1)
10.8
2005 Employee Stock Purchase Plan(1)*
10.9
Form of Offering Document to 2005 Employee Stock Purchase Plan(1)*
10.10
Lease between Registrant and California Pacific Commercial Corporation dated March 20, 2002(1)
10.11
First Amendment to Lease between Registrant and California Pacific Commercial Corporation dated May 8,
2003(1)
10.12
Second Amendment to Lease between Registrant and California Pacific Commercial Corporation dated February
11, 2005(1)
10.13
Development Agreement between Registrant and Autoliv ASP, Inc. dated October 3, 2005(1)
10.14
Loan and Security Agreement between Registrant and Silicon Valley Bank dated March 20, 2002, as amended on
January 7, 2003, September 3, 2003, March 18, 2004 and May 16, 2005(1)
10.15
Master Security Agreement between Registrant and General Electric Capital Corporation dated May 17, 2005,
as amended on May 18, 2005(1)
10.16
Promissory Note between Registrant and General Electric Capital Corporation dated June 15, 2005(1)
10.17
Promissory Note between Registrant and General Electric Capital Corporation dated August 24, 2005(1)
10.20
Warrant to Purchase shares of Series B Preferred Stock issued to Silicon Valley Bank dated March 20, 2002(1)
10.21
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated January 7, 2003,
as amended on March 4, 2003(1)
10.22
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated September 19,
2003(1)
10.23
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated April 7, 2004(1)
10.24
Lease Agreement between the Brittania, LLC and the Registrant dated August 25, 2006(2)
II-3
Table of Contents
Exhibit
Number
Description of Document
10.26†
Purchase Option Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December 1, 2006(2)
10.27
Warrant Purchase Agreement between Symphony Allegro Holdings LLC and Registrant dated December 1, 2006(2)
10.28
Warrant to Purchase shares of Common Stock issued to Symphony Allegro Holdings LLC dated December 1, 2006(2)
10.29†
Amended and Restated Research and Development Agreement by and among Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. and Registrant dated December 1, 2006(2)
10.30
Registration Rights Agreement between Symphony Allegro Holdings LLC and Registrant dated December 1, 2006(2)
10.31†
Novated and Restated Technology License Agreement by and among Symphony Allegro Holdings LLC and Symphony
Allegro, Inc. and Registrant dated December 1, 2006(2)
10.32
Confidentiality Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December 1, 2006(2)
10.33
2007 Performance Bonus Program(2)*
10.34
First Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated May 4, 2007(3)
10.35†
Second Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated August 28, 2007(4)
10.36†
Manufacturing and Supply Agreement between Registrant and Autoliv ASP, Inc., dated November 2, 2007(5)
10.38
Offer Letter between the Registrant and Michael Simms, dated January 23, 2008(5)*
10.39
Stock and Warrant Purchase Agreement between Registrant and Biomedical Investment Fund Pte Ltd., dated
March 26, 2008(6)
10.40
Warrant to Purchase shares of Common Stock issued to Biomedical Investment Fund Pte Ltd. dated March 27,
2008(6)
10.41
Common Stock Purchase Agreement between Registrant and Azimuth Opportunity Ltd. dated March 31, 2008(7)
10.42
Form of Notice of Grant of Award and Stock Unit Award Agreement to 2005 Equity Incentive Plan(13)*
10.43
2006 Performance Bonus Program(10)*
10.44
2008 Performance Bonus Program(11)*
10.45
2009-2010 Performance Based Incentive Program(12)*
10.46
Severance Agreement and Release Agreement between the Registrant and Anthony Tebbutt, dated February 6,
2009 and February 17, 2009, respectively(14)*
10.47†
Amended and Restated Purchase Option Agreement by and among Registrant, Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. dated June 15, 2009(15)
10.48
Warrant Purchase Agreement between Registrant and Symphony Allegro Holdings LLC dated June 15, 2009(15)
10.49
Amended and Restated Registration Rights Agreement between the Registrant and Symphony Allegro Holdings LLC
dated June 15, 2009(15)
10.50
Form of Amendment to Change of Control Agreement(16)*
10.51
Form of Warrants to Purchase shares of Common Stock dated August 26, 2009(17)
10.52
Letter Agreement among the Company, Symphony Allegro Holdings LLC, Symphony Capital Partners, L.P. and
Symphony Strategic Partners, LLC dated August 26, 2009(17)
14.1
Alexza Pharmaceuticals, Inc. Code of Business Conduct for Employees, Executive Officers and Directors(2)
21.1
w
Subsidiaries of Registrant
II-4
Table of Contents
Exhibit
Number
Description of Document
23.1
w
Consent of Independent Registered Public Accounting Firm
23.2
w
Consent of Cooley Godward Kronish LLP (Included in Exhibit 5.1)
24.1
w
Power of Attorney included on the signature pages hereto
*
Management contract or compensation plan or arrangement.
w
Filed herein
†
Confidential treatment has been granted with respect to certain
portions of this exhibit. This exhibit omits the information subject
to this confidentiality request. Omitted portions have been filed
separately with the SEC.
(1)
Incorporated by reference to exhibits to our Registration Statement
on Form S-1 filed on December 22, 2005, as amended (File No.
333-130644)
(2)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 29, 2007.
(3)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on August 13, 2007
(4)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on November 1, 2007
(5)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 17, 2008
(6)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March 17, 2008
(7)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March 31, 2008
(8)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on May 30, 2008.
(9)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on July 14, 2008.
(10)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June 5, 2006.
(11)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on April 16, 2008.
(12)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on February 24, 2009, as amended by
Amendment No. 1 thereto as filed with the SEC on June 26, 2009.
(13)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 10, 2009.
(14)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on May 11, 2009.
(15)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June 15, 2009, as amended by
Amendment No. 1 thereto as filed with the SEC on June 26, 2009.
(16)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on August 5, 2009.
II-5
Table of Contents
(17)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on August 26, 2009.
II-6
Table of Contents
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of this offering.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC this form
of indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against these liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted
by a director, officer or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of this issue.
II-7
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Mountain View, California, on the 9
th
day of September, 2009.
ALEXZA PHARMACEUTICALS, INC.
By:
/s/ Thomas B. King
Thomas B. King
President and Chief Executive Officer
II-8
Table of Contents
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE POWER OF ATTORNEY PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Thomas B. King and August J. Moretti, and each of them acting
individually, as his or her true and lawful attorneys-in-fact and agents, each with full power of
substitution, for him or her in any and all capacities, to sign any and all amendments to this
registration statement (including post-effective amendments), and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power
and authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully for all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been
signed by the following persons in the capacities and on the dates indicated:
Signature
Title
Date
/s/ Thomas B. King
Thomas B. King
President, Chief Executive Officer and Director
(Principal Executive Officer)
September 9, 2009
/s/ August J. Moretti
August J. Moretti
Senior Vice President and Chief Financial
Officer
(Principal Financial and Accounting Officer)
September 9, 2009
/s/ Hal V. Barron
Hal V. Barron
Director
September 9, 2009
/s/ Samuel D. Colella
Samuel D. Colella
Director
September 9, 2009
/s/ Alan D. Frazier
Alan D. Frazier
Director
September 9, 2009
/s Deepika R. Pakianathan
Deepika R. Pakianathan
Director
September 9, 2009
/s/ J. Leighton Read
J. Leighton Read
Director
September 9, 2009
/s/ Gordon Ringold
Gordon Ringold
Director
September 9, 2009
/s/ Isaac Stein
Isaac Stein
Director
September 9, 2009
II-9
Table of Contents
EXHIBIT INDEX
Exhibit
Number
Description of Document
3.5
Restated Certificate of Incorporation(1)
3.7
Amended and Restated Bylaws(1)
3.8
Amendment to Amended and Restated Bylaws(5)
4.1
Specimen Common Stock Certificate(1)
4.2
Second Amended and Restated Investors' Rights Agreement between Registrant and certain holders of Preferred
Stock dated November 5, 2004(1)
5.1
w
Opinion of Cooley Godward Kronish LLP
10.2
Form of Director/Officer Indemnification Agreement entered into between Registrant and each of its
directors and officers(9)*
10.3
Form of Change of Control Agreement(13)*
10.4
2005 Equity Incentive Plan(8)*
10.5
Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Equity
Incentive Plan(1)*
10.6
2005 Non-Employee Directors' Stock Option Plan(1)
10.7
Form of Option Grant Notice, Form of Option Agreement and Form of Notice of Exercise to 2005 Non-Employee
Directors' Stock Option Plan(1)
10.8
2005 Employee Stock Purchase Plan(1)*
10.9
Form of Offering Document to 2005 Employee Stock Purchase Plan(1)*
10.10
Lease between Registrant and California Pacific Commercial Corporation dated March 20, 2002(1)
10.11
First Amendment to Lease between Registrant and California Pacific Commercial Corporation dated May 8,
2003(1)
10.12
Second Amendment to Lease between Registrant and California Pacific Commercial Corporation dated February
11, 2005(1)
10.13
Development Agreement between Registrant and Autoliv ASP, Inc. dated October 3, 2005(1)
10.14
Loan and Security Agreement between Registrant and Silicon Valley Bank dated March 20, 2002, as amended on
January 7, 2003, September 3, 2003, March 18, 2004 and May 16, 2005(1)
10.15
Master Security Agreement between Registrant and General Electric Capital Corporation dated May 17, 2005,
as amended on May 18, 2005(1)
10.16
Promissory Note between Registrant and General Electric Capital Corporation dated June 15, 2005(1)
10.17
Promissory Note between Registrant and General Electric Capital Corporation dated August 24, 2005(1)
10.20
Warrant to Purchase shares of Series B Preferred Stock issued to Silicon Valley Bank dated March 20, 2002(1)
10.21
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated January 7, 2003,
as amended on March 4, 2003(1)
10.22
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated September 19,
2003(1)
10.23
Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated April 7, 2004(1)
10.24
Lease Agreement between the Brittania, LLC and the Registrant dated August 25, 2006(2)
10.26†
Purchase Option Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December 1, 2006(2)
II-10
Table of Contents
Exhibit
Number
Description of Document
10.27
Warrant Purchase Agreement between Symphony Allegro Holdings LLC and Registrant dated December 1, 2006(2)
10.28
Warrant to Purchase shares of Common Stock issued to Symphony Allegro Holdings LLC dated December 1, 2006(2)
10.29†
Amended and Restated Research and Development Agreement by and among Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. and Registrant dated December 1, 2006(2)
10.30
Registration Rights Agreement between Symphony Allegro Holdings LLC and Registrant dated December 1, 2006(2)
10.31†
Novated and Restated Technology License Agreement by and among Symphony Allegro Holdings LLC and Symphony
Allegro, Inc. and Registrant dated December 1, 2006(2)
10.32
Confidentiality Agreement by and among Symphony Allegro Holdings LLC and Symphony Allegro, Inc. and
Registrant dated December 1, 2006(2)
10.33
2007 Performance Bonus Program(2)*
10.34
First Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated May 4, 2007(3)
10.35†
Second Amendment to Lease between Britannia Hacienda VIII LLC and the Registrant dated August 28, 2007(4)
10.36†
Manufacturing and Supply Agreement between Registrant and Autoliv ASP, Inc., dated November 2, 2007(5)
10.38
Offer Letter between the Registrant and Michael Simms, dated January 23, 2008(5)*
10.39
Stock and Warrant Purchase Agreement between Registrant and Biomedical Investment Fund Pte Ltd., dated
March 26, 2008(6)
10.40
Warrant to Purchase shares of Common Stock issued to Biomedical Investment Fund Pte Ltd. dated March 27,
2008(6)
10.41
Common Stock Purchase Agreement between Registrant and Azimuth Opportunity Ltd. dated March 31, 2008(7)
10.42
Form of Notice of Grant of Award and Stock Unit Award Agreement to 2005 Equity Incentive Plan (13)*
10.43
2006 Performance Bonus Program(10)*
10.44
2008 Performance Bonus Program(11)*
10.45
2009-2010 Performance Based Incentive Program(12)*
10.46
Severance Agreement and Release Agreement between the Registrant and Anthony Tebbutt, dated February 6,
2009 and February 17, 2009, respectively(14)*
10.47†
Amended and Restated Purchase Option Agreement by and among Registrant, Symphony Allegro Holdings LLC and
Symphony Allegro, Inc. dated June 15, 2009(15)
10.48
Warrant Purchase Agreement between Registrant and Symphony Allegro Holdings LLC dated June 15, 2009(15)
10.49
Amended and Restated Registration Rights Agreement between the Registrant and Symphony Allegro Holdings LLC
dated June 15, 2009(15)
10.50
Form of Amendment to Change of Control Agreement(16)*
10.51
Form of Warrants to Purchase shares of Common Stock dated August 26, 2009(17)
10.52
Letter Agreement among the Company, Symphony Allegro Holdings LLC, Symphony Capital Partners, L.P. and
Symphony Strategic Partners, LLC dated August 26, 2009(17)
14.1
Alexza Pharmaceuticals, Inc. Code of Business Conduct for Employees, Executive Officers and Directors(2)
21.1
w
Subsidiaries of Registrant
23.1
w
Consent of Independent Registered Public Accounting Firm
23.2
w
Consent of Cooley Godward Kronish LLP (Included in Exhibit 5.1)
II-11
Table of Contents
Exhibit
Number
Description of Document
24.1
w
Power of Attorney included on the signature pages hereto
*
Management contract or compensation plan or arrangement.
w
Filed herein
†
Confidential treatment has been granted with respect to certain
portions of this exhibit. This exhibit omits the information subject
to this confidentiality request. Omitted portions have been filed
separately with the SEC.
(1)
Incorporated by reference to exhibits to our Registration Statement
on Form S-1 filed on December 22, 2005, as amended (File No.
333-130644)
(2)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 29, 2007.
(3)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on August 13, 2007
(4)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on November 1, 2007
(5)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 17, 2008
(6)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March 17, 2008
(7)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on March 31, 2008
(8)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on May 30, 2008.
(9)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on July 14, 2008.
(10)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on June 5, 2006.
(11)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on April 16, 2008.
(12)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on February 24, 2009, as amended by
Amendment No. 1 thereto as filed with the SEC on June 26, 2009.
(13)
Incorporated by reference to our Annual Report on Form 10-K (File No.
000-51820) as filed with the SEC on March 10, 2009.
(14)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on May 11, 2009.
(15)
Incorporated by reference to our Amendment No. 1 to Current Report on
Form 8-K/A (File No. 000-51820) as filed with the SEC on June 26,
2009.
(16)
Incorporated by reference to our Quarterly Report on Form 10-Q (File
No. 000-51820) as filed with the SEC on August 5, 2009.
(17)
Incorporated by reference to our Current Report on Form 8-K (File No.
000-51820) as filed with the SEC on August 26, 2009.
II-12