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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
    Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31,
    2010o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    000-51820
 Alexza Pharmaceuticals,
    Inc.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

77-0567768(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)   2091 Stierlin Court
    Mountain View, California 94043 (Address of Principal
    Executive Offices including Zip Code) Registrants
    telephone number, including area code:(650) 944-7000
  Securities registered pursuant
    to Section 12 (b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.0001 per share

Nasdaq Global Market   Securities registered pursuant
    to Section 12 (g) of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o(Do not check if a smaller
    reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS INCORPORATED BY
    REFERENCE
  Form 10-K




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##### 





ANNUAL
    REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
    TABLE OF CONTENTS
   
 PART IItem 1.


Business


3Item 1A.


Risk Factors


26Item 1B


Unresolved Staff Comments


44Item 2.


Properties


44Item 3.


Legal Proceedings


44Item 4.


Reserved


45PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


45Item 5A.


Quarterly Stock Price Information and Registered
    Shareholders


45Item 5B.


Use of Proceeds from the Sale of Registered
    Securities


47Item 5C.


Treasury Stock


47Item 6.


Selected Financial Data


48Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


49Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risks


60Item 8.


Financial Statements and Supplementary Data


61Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


104Item 9A.


Controls and Procedures


104Item 9B.


Other Information


106PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


106Item 11.


Executive Compensation


106Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


106Item 13.


Certain Relationships and Related Transactions
    and Director Independence


107Item 14.


Principal Accountant Fees and Services


107PART IVItem 15.


Exhibits and Financial Statement Schedules


107Signatures


111Exhibits Index


113EX-10.45EX-10.46EX-10.47EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   2




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Staccato Staccato Form 10-K
 PART I.
    SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS



Some of the statements under Business, Risk
    Factors, Managements Discussion and Analysis
    of Financial Condition and Results of Operations and
    elsewhere in this Annual Report 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 following: the prospects of us
    receiving approval to market AZ-004, our anticipated timing and
    prospects for the resubmission of our New Drug Application for
    AZ-004, the implications of interim or final results of our
    clinical trials, the progress and timing 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 our product candidates to lead to
    the development of safe or effective therapies, our ability to
    enter into collaborations, 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 Annual Report, 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 Annual Report 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
    Annual Report 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.



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 Quarterly Reports on
    Form 10-Q,
    Current Reports on
    Form 8-K,
    and our website. Item 1.
    Business  Staccato Staccato
  Staccato Staccato Staccato-
 3




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Staccato Staccato Staccato Staccato Staccato Staccato
    
    AZ-004 (Staccato loxapine).  We are developing
    AZ-004 for the rapid treatment of agitation in patients with
    schizophrenia or bipolar disorder. In December 2009, we
    submitted an NDA for AZ-004. The NDA was accepted for filing by
    the U.S. Food and Drug Administration, or the FDA, in
    February 2010. In October 2010, we received a Complete Response
    Letter, or CRL, from the FDA regarding our NDA for AZ-004,
    submitted as
    Adasuvetm

    Staccato®

    (loxapine) inhalation aerosol, 5 mg and 10 mg. A CRL
    is issued by the FDA indicating that the NDA review cycle is
    complete and the application is not ready for approval in its
    present form. In December 2010, we completed an
    End-of-Review
    meeting with the FDA to discuss the issues outlined in the
    AZ-004 CRL. In January 2011, we received the official FDA
    minutes of the meeting, and we anticipate resubmitting the
    AZ-004 NDA in July 2011. We plan to seek commercial partners for
    the worldwide development and commercialization of AZ-004.  1 1 End-of-Review 1
  End-of-Review Staccato
 4




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Staccato
    and/or
  
    AZ-007(Staccato zaleplon).  We have
    completed Phase 1 testing for AZ-007. This product candidate is
    being developed 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.
    In the Phase 1 study, AZ-007 delivered an IV-like
    pharmacokinetic profile with a median time to peak drug
    concentration of 1.6 minutes. Pharmacodynamics, measured as
    sedation assessed on a 100 mm visual-analog scale, showed onset
    of effect as early as 2 minutes after dosing. We do not intend
    to spend any external development resources on AZ-007 in the
    first half of 2011, but are continuing internal work on the
    technical product development of AZ-007.
    Staccato nicotineis designed to help smokers quit by
    addressing both the chemical and behavioral components of
    nicotine addiction by delivering nicotine replacement via
    inhalation. On August 25, 2010, we entered into a license
    and development agreement, or the Cypress Agreement, with
    Cypress Bioscience, Inc., or Cypress, for Staccatonicotine. According to the terms of the Cypress Agreement,
    Cypress paid us a non-refundable upfront payment of
    $5 million to acquire the worldwide license for the
    Staccatonicotine technology. In addition, following the
    completion of certain preclinical and clinical milestones
    relating to the Staccato nicotine technology, if Cypress
    elects to continue the development of Staccatonicotine,
    Cypress is obligated to pay to us an additional technology
    transfer payment of $1 million. We have a carried interest
    of 10%, subject to adjustment in certain circumstances, in the
    net proceeds of any sale or license by Cypress of the
    Staccatonicotine assets and the carried interest will be
    subject to put and call rights in certain circumstances. Under
    the Cypress Agreement, Cypress has responsibility for
    preclinical, clinical and regulatory aspects of the development
    of Staccatonicotine, along with the commercialization of
    the product. Cypress will pay us a total of $3.9 million
    for our efforts to execute a defined development plan for
    Cypress culminating with the delivery of clinical trial
    materials for a Phase 1 study with Staccatonicotine. We
    have received $2.9 million of this amount as of January
    2011. In January 2011, Cypress was acquired by Ramius Value and
    Opportunity Advisors LLC, Royalty Pharma, US Partner, LP,
    Royalty Pharma US Partners 2008, LP and RP Investment Corp., or
    collectively, Royalty Pharma. We do not know what, if any,
    impact this will have on the partnership. 5




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
    AZ-104(Staccato loxapine,
    low-dose).  AZ-104, a lower-dose version of
    AZ-004, is being studied for the treatment of patients suffering
    from acute migraine headaches. AZ-104 has completed a Phase 1
    clinical trial in healthy subjects and two Phase 2 clinical
    trials in patients with migraine headache.
    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.
    AZ-003(Staccato fentanyl).  We have
    completed and announced positive results from a Phase 1 clinical
    trial of AZ-003 in opioid-naïve healthy subjects. This
    product candidate is intended for the treatment of patients with
    acute pain, including patients with breakthrough cancer pain and
    postoperative patients with acute pain episodes.  Staccato
  Market
    Opportunity for Acute and Intermittent Conditions
    
    Oral Tablets.  Oral tablets or capsules are
    convenient and cost effective, but they generally do not provide
    rapid onset of action. Oral tablets may require at least one to
    four hours to achieve peak plasma levels. Also, some drugs, if
    administered as a tablet or capsule, do not achieve adequate or
    consistent bioavailability due to the degradation of the drug by
    the stomach or liver or inability to be absorbed into the
    bloodstream.
    Injections.  IV or intramuscular, or IM,
    injections provide a more rapid onset of action than oral
    tablets and can sometimes be used to titrate potent drugs with
    very rapid changes in effect. Titration refers to the ability of
    a patient or care giver to administer an initial dose of
    medication and then determine if the medication is effective; if
    the medication is effective no further dosing is required.
    However, if the medication is not yet effective, another dose
    can be administered repeating this process until the medication
    has had an adequate effect. However, with a few exceptions,
    injections generally are administered by trained medical
    personnel in a medical care setting. Other forms of injections
    result in an onset of action that is generally substantially
    slower than IV injection, although often faster than oral
    administration. All forms of injections are invasive, can be
    painful to some patients and are often expensive. In addition,
    many drugs are not water soluble and can be difficult to
    formulate in an injectable form.
    Traditional Inhalation.  Traditional dry powder
    and aerosolized inhalation delivery systems have been designed
    and used primarily for local delivery of drugs to the airways,
    not to the deep lung for rapid systemic drug delivery. Certain
    recent variants of these systems, however, can provide systemic
    delivery of drugs, either for the purpose of rapid onset of
    action or to enable noninvasive delivery of drugs that are not
    orally bioavailable. Nevertheless, many of these systems have
    difficulty in generating appropriate drug particle sizes or
    consistent emitted doses for deep lung delivery. To achieve
    appropriate drug particle sizes and consistent emitted doses,
    most traditional inhalation systems require the use of
    excipients and additives such as detergents, stabilizers and
    solvents, which may potentially cause toxicity or allergic
    reactions. Many traditional inhalation devices require patient
    coordination to deliver the correct drug dose, leading to
    potentially wide variations in the drug delivered to a patient. 6




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Our
    Solution: StaccatoSystem
  Staccato Staccato
  Staccato
  
    Rapid Onset.  The aerosol produced with the
    Staccatosystem is designed to be rapidly absorbed
    through the deep lung with a speed of therapeutic onset
    comparable to an IV injection, generally achieving peak
    plasma levels of drug in two to five minutes.
    Ease of Use.  The Staccatosystem is
    breath actuated, and a patient simply inhales to administer the
    drug dose. Unlike injections, the Staccatosystem is
    noninvasive and does not require caregiver assistance. The
    aerosol produced with the Staccatosystem is relatively
    insensitive to patient inhalation rates. Unlike many other
    inhalation technologies, the patient does not need to learn a
    special breathing pattern. In addition, the Staccatodevice is small and easily portable.
    Consistent Particle Size and Dose.  The
    Staccatosystem uses rapid heating of the drug film to
    create consistent and appropriate particle sizes for deep lung
    inhalation and absorption into the bloodstream. The Staccatosystem also produces a consistent high emitted dose,
    regardless of the patients breathing pattern.
    Broad Applicability.  We have screened over 400
    drugs, and approximately 200 have exhibited initial vaporization
    feasibility using our Staccatosystem. The Staccatosystem can deliver both water soluble and water insoluble
    drugs and eliminates the need for excipient and additives such
    as detergents, stabilizers and solvents, avoiding the side
    effects that may be associated with the excipient or additives.
    Design Flexibility.  The Staccatosystem
    can incorporate multiple features, including lockout to
    potentially enhance safety, the convenience of patient
    titration, and a variety of dose administration regimens.  Drug
    Candidates Based on the Staccato System
  Staccato Staccato
  Staccato
    System
  Staccato
  Staccato Staccato
 7




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Staccato Staccato
  Staccato
 8




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Our
    Pipeline
  AlexzaCommercialProduct Candidate

API

Target Indication

Development Status

RightsAZ-004

Loxapine

Agitation in patients with schizophrenia or bipolar disorder

NDA submitted December 2009, CRL received October 2010. End of
    Review meeting held December 2010

WorldwideAZ-007

Zaleplon

Insomnia

Phase 1 completed

WorldwideStaccatoNicotine

Nicotine

Smoking cessation

Pre-Phase 1

Licensed to Cypress Bioscience, Inc.AZ-104

Loxapine (low-dose)

Migraine headache

Phase 2 (currently inactive)

WorldwideAZ-002

Alprazolam

Panic attacks and other CNS conditions

Phase 2 (currently inactive)

WorldwideAZ-003

Fentanyl

Acute pain

Phase 1 completed (currently inactive)

Worldwide   AGITATION
    PROGRAM: AZ-004 (Staccato loxapine)
  Staccato
    Market
    Opportunity
     9




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Staccato Staccato
      Development
    Status
      1 1 End-of-Review 1
  End-of-Review Staccato Staccato
   10




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INSOMNIA
    PROGRAM: AZ-007 (Staccato zaleplon)
    Market
    Opportunity
    30-60 20-30
    Development
    Status
  Clinical
    Studies
     11




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Preclinical
    Studies
    SMOKING
    CESSATION PROGRAM: Staccato nicotine
  Staccato Staccato Staccato hand-to-mouth Staccato
  Staccato Staccato
  MIGRAINE
    HEADACHE PROGRAM: AZ-104 (Staccato loxapine,
    low-dose)
  Staccato
  Market
    Opportunity
     12




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Development
    Status
  Clinical
    Trials
  2-hour
  intent-to-treat
  2-hours
    Preclinical
    Studies
    ACUTE
    PAIN PROGRAM: AZ-003 (Staccato fentanyl)
  Staccato
 13




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Staccato
  Staccato
  Development
    Status
  Clinical
    Studies
    Staccato
   14




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Preclinical
    Studies
    AZ-002
    (Staccato alprazolam)
  Staccato
  Development
    Status
  Clinical
    Trials
  proof-of-concept
  proof-of-concept Staccato Staccato
  Preclinical
    Studies
    Our
    Strategy
    
    Focus on Acute and Intermittent Conditions.  We
    focus our development and commercialization efforts on product
    candidates based on our Staccatosystem that are intended
    to address important unmet medical and 15




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patient needs in the treatment of acute and intermittent
    conditions in which rapid onset, ease of use, noninvasive
    administration and, in some cases, patient titration of dosage
    are required.  
    Establish Strategic Partnerships.  We intend to
    strategically partner with pharmaceutical and other companies to
    provide development funding or to address markets that may
    require a larger sales force or greater marketing resources than
    we are able to provide, or specific expertise to maximize the
    value of some product candidates. We also intend to seek
    international distribution partners for our product candidates.
    We may also enter into strategic partnerships with other
    pharmaceutical companies to combine our Staccatosystem
    with their proprietary compounds.
    Retain and Control Product Manufacturing.  We
    own all manufacturing rights to our product candidates, other
    than Staccatonicotine. We intend to internally complete
    the final manufacture and assembly of our product candidates and
    any future products, potentially enabling greater intellectual
    property protection and economic return from our future
    products. We also believe controlling the final manufacture and
    assembly reduces the risk of supply interruptions and allows
    more cost effective manufacturing.  Licensing
    Collaborations
  Cypress
    Bioscience, Inc.
  Staccato Staccato
  Staccato Staccato Staccato
  Staccato Staccato
  month-to-month
  Biovail
    Laboratories International SRL
  and/or
 16




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Research
    and Development
    Year Ended December 31,2010


2009


2008Product candidate expenses

$
26,059


$
31,896


$
48,681General research


7,469



7,882



12,884Total research and development

$
33,528


$
39,778


$
61,565   Manufacturing
        Staccato
     17




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Autoliv
    ASP, Inc.
  Staccato
            Product
    Commercialization
    Government
    Regulation
   18




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
    preclinical laboratory studies and animal tests;
    the submission to the FDA of an IND for human clinical testing,
    which must become effective before human clinical trials
    commence;
    adequate and well controlled human clinical trials to establish
    the safety and efficacy of the product;
    the submission to the FDA of an NDA;
    satisfactory completion of an FDA inspection of the
    manufacturing facilities at which the product is made to assess
    compliance with cGMP. In addition, the FDA may inspect clinical
    trial sites that generated the data in support of the
    NDA; and
    FDA review and approval of the NDA.        
    Phase 1.  Phase 1 clinical trials involve the
    initial introduction of the drug into human subjects, frequently
    healthy volunteers. These studies are designed to determine the
    metabolism and pharmacologic actions of the drug in humans, the
    adverse effects associated with increasing doses and, if
    possible, to gain early evidence of effectiveness. In Phase 1
    clinical trials, the drug is usually tested for safety,
    including adverse effects, dosage tolerance, absorption,
    distribution, metabolism, excretion and pharmacodynamics.
    Phase 2.  Phase 2 clinical trials usually
    involve studies in a limited patient population to
    (1) evaluate the efficacy of the drug for specific,
    targeted indications; (2) determine dosage tolerance and
    optimal dosage; and (3) identify possible adverse effects
    and safety risks. Although there are no statutory or regulatory
    definitions for Phase 2a and Phase 2b, Phase 2a is commonly used
    to describe a Phase 2 clinical trial designed to evaluate
    efficacy, adverse effects and safety risks and Phase 2b is
    commonly used to describe a subsequent Phase 2 clinical trial
    that also evaluates dosage tolerance and optimal dosage.
    Phase 3.  If a compound is found to be
    potentially effective and to have an acceptable safety profile
    in Phase 2 clinical trials, the clinical trial program will be
    expanded to further demonstrate clinical efficacy, optimal
    dosage and safety within an expanded patient population at
    geographically dispersed clinical trial sites. Phase 3 clinical
    trials usually include several hundred to several thousand
    patients.
    Phase 4.  Phase 4 clinical trials are studies
    required of, or agreed to by, a sponsor that are conducted after
    the FDA has approved a product for marketing. These studies are
    used to gain additional information from 19




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the treatment of patients in the intended therapeutic indication
    and to verify a clinical benefit in the case of drugs approved
    under accelerated approval regulations. If the FDA approves a
    product while a company has ongoing clinical trials that were
    not necessary for approval, a company may be able to use the
    data from these clinical trials to meet all or part of any Phase
    4 clinical trial requirement. These clinical trials are often
    referred to as Phase 3/4 post-approval clinical trials. Failure
    to promptly conduct Phase 4 clinical trials could result in
    withdrawal of approval for products approved under accelerated
    approval regulations.  1 2
    method-of-use.
   20




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and/or
      Staccato
 21




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Staccato
  Staccato Staccato Staccato
  paid-up
    Pharmaceutical
    Pricing and Reimbursement
      
    controls on government funded reimbursement for medical products
    and services;
    controls on healthcare providers;
    challenges to the pricing of medical products and services or
    limits or prohibitions on reimbursement for specific products
    and therapies through other means;
    reform of drug importation laws; and
    expansion of use of managed care systems in which healthcare
    providers contract to provide comprehensive healthcare for a
    fixed cost per person. 22




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Patents
    and Proprietary Rights
    
    the Staccatosystem and its components;
    methods of using the Staccatosystem;
    the aerosolized form of drug compounds produced by the
    Staccatosystem; and
    methods of making and using the drug containing aerosols,
    including methods of administering the aerosols to a patient.  Staccato
  AZ-004/AZ-104
    (Staccato loxapine)
  Staccato
  AZ-007
    (Staccato zaleplon)
  Staccato
  AZ-002
    (Staccato alprazolam)
  Staccato
 23




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AZ-003
    (Staccato fentanyl)
  Staccato
  Staccato
    nicotine
    Competition
    
    develop products that are superior to other products in the
    market;
    attract and retain qualified scientific, product development,
    manufacturing, and commercial personnel;
    obtain patent
    and/or other
    proprietary protection covering our future products and
    technologies;
    obtain required regulatory approvals; and
    successfully collaborate with pharmaceutical and biotechnology
    companies in the development and commercialization of new
    products.  and/or
    
    AZ-004 would compete with the injectable form of loxapine and
    other antipsychotic drugs;
    AZ-007 would compete with non-benzodiazepine GABA-A receptor
    agonists;
    AZ-104 would compete with available triptan drugs and IV
    prochlorperazine;
    AZ-003 would compete with injectable and other forms of fentanyl
    and various generic oxycodone, hydrocodone and morphine
    products; and
    AZ-002 would compete with the oral tablet form of alprazolam and
    other benzodiazepines.   24




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Employees
    Corporate
    Information
    Available
    Information
  Form 10-Q, Form 8-K 1-800-SEC-0330.
 25




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Item 1A.
    Risk
    Factors  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
    Annual Report, 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
  Our
    management and our independent registered public accounting
    firm, in their report on our financial statements as of and for
    the year ended December 31, 2010, have concluded that due
    to our need for additional capital, and the uncertainties
    surrounding our ability to raise such funding, substantial doubt
    exists as to our ability to continue as a going
    concern.
    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.
     26




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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.
  End-of-Review
  
    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.    We
    will need substantial additional capital in the future. If
    additional capital is not available, we will have to delay,
    reduce or cease operations.
    
    our response to the CRL, including the NDA we expect to resubmit
    in July 2011, and interactions with the FDA regarding the issues
    raised in the CRL;
    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;
    the cost, timing and outcomes of regulatory proceedings;
    the cost and timing of developing manufacturing capacity;
    the cost and timing of developing sales and marketing
    capabilities prior to receipt of any regulatory approval of our
    product candidates;
    revenues received from any existing or future products;
    payments received under our collaboration with Cypress and any
    future strategic partnerships; 27




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
    the filing, prosecution and enforcement of patent
    claims; and
    the costs associated with commercializing our product
    candidates, if they receive regulatory approval.    
    expenditures related to continued preclinical and clinical
    development of our product candidates during this period within
    budgeted levels;
    no unexpected costs related to the development of our
    manufacturing capability;
    no unexpected costs related to the resubmission of our AZ-004
    NDA: and
    no growth in the number of our employees during this period.    The
    process for obtaining approval of an NDA is time consuming,
    subject to unanticipated delays and costs, and requires the
    commitment of substantial resources. We received a CRL for our
    NDA in October 2010.
       28




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##### Table of Contents



Unstable
    market conditions may have serious adverse consequences on our
    business.
    Unless
    our preclinical studies demonstrate the safety of our product
    candidates, we will not be able to commercialize our product
    candidates.
  Staccato
    
    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.    Failure
    or delay in commencing or completing clinical trials for our
    product candidates could harm our business.
   29




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##### Table of Contents




    insufficient financial resources to fund such trials;
    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 Staccatosystem.    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.
    proof-of-concept Staccato Staccato
 30




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##### Table of Contents



If our
    product candidates fail to show a clinically significant benefit
    compared to placebo, they will not be approved for
    marketing.
  Staccato
  Regulatory
    authorities may not approve our product candidates even if they
    meet safety and efficacy endpoints in clinical
    trials.
    
    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.         31




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##### Table of Contents



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.
      
    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.  If we
    do not produce our devices cost effectively, we will never be
    profitable.
  Staccato Staccato Staccato Staccato
 32




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##### Table of Contents



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.
    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.
          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.
  Staccato
 33




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##### Table of Contents



Staccato Staccato
  Staccato
  Staccato Staccato Staccato
  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.
  Staccato
 34




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##### Table of Contents



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.
    
    business combinations or significant changes in a strategic
    partners business strategy may adversely affect a
    strategic partners willingness or ability to complete its
    obligations under any arrangement;
    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;
    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.
  Staccato Staccato
  
    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; 35




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##### Table of Contents




    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, including the package insert, and the
    marketing restrictions required by the FDA or regulatory
    authorities in other countries.  Our
    product candidates that we may develop may require expensive
    carcinogenicity tests.
  Staccato
  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.
      
    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;
    the claims of our issued patents may be narrower than as filed
    and not sufficiently broad to prevent third parties from
    circumventing them;
    it is possible that none of our pending patent applications will
    result in issued patents;
    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. 36




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##### Table of Contents



Even
    if valid and enforceable patents cover our product candidates
    and technologies, the patents will provide protection only for a
    limited amount of time.
    and/or
      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.
     37




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##### Table of Contents



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.
             38




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##### Table of Contents



If we
    are unable to establish sales and marketing capabilities or
    enter into additional agreements with third parties to market
    and sell our product candidates, we may be unable to generate
    significant product revenue.
    and/or
  
    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.    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.
   39




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##### Table of Contents



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.
    Healthcare
    law and policy changes, based on recently enacted legislation,
    may have an adverse effect on us.
  over-the-counter
   40




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##### Table of Contents



Our
    product candidates AZ-002, AZ-003 and AZ-007 contain drug
    substances that are regulated by the U.S. Drug Enforcement
    Administration. Failure to comply with applicable regulations
    and requirements could harm our business.
    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.
  Staccato Staccato Staccato Staccato Staccato
  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.
     41




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##### Table of Contents



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.
      Our
    business is subject to increasingly complex corporate
    governance, public disclosure and accounting requirements that
    could adversely affect our business and financial
    results.
  (say-on-pay).
  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.
   42




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##### Table of Contents



Risks
    Relating to Owning Our Common Stock
  Our
    stock price has been and may continue to be extremely
    volatile.
    
    actual or anticipated regulatory approvals or non-approvals of
    our product candidates or competing products;
    actual or anticipated cash depletion of our financial resources
    actual or anticipated results and timing of our clinical trials;
    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;
    sales results for AZ-004, if it is approved for marketing;
    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; and
    sales and distributions of our common stock by our stockholders.   43




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##### Table of Contents



If we
    sell shares of our common stock in future financings, existing
    common stockholders will experience immediate dilution and, as a
    result, our stock price may go down.
    If we
    fail to continue to comply with the listing requirements of The
    NASDAQ Global Market, the price of our common stock and our
    ability to access the capital markets could be negatively
    impacted.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings   44




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##### Table of Contents



Item 4.
    Reserved   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Item 5A.
    Quarterly
    Stock Price Information and Registered
    Shareholders    2010

High

LowFirst Quarter

$
2.96


$
2.30Second Quarter


3.92



2.65Third Quarter


3.64



2.42Fourth Quarter


3.26



0.86   2009

High


LowFirst Quarter

$
3.40


$
1.40Second Quarter


3.25



1.50Third Quarter


3.01



1.90Fourth Quarter


2.55



1.93     Recent
    Sales of Unregistered Securities
   45




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##### Table of Contents



Performance
    Graph
  58-month 3/8/2006 12/31/2010.
  COMPARISON
    OF 58 MONTH CUMULATIVE TOTAL RETURN* Among
    Alexza Pharmaceuticals, Inc., the NASDAQ Composite Index
    and the NASDAQ Biotechnology Index
  
  *
    
    $100 invested on 3/8/06 in stock or 2/28/06 in index, including
    reinvestment of dividends.Fiscal year ending December 31.  3/06


3/06


4/06


5/06


6/06


7/06


8/06


9/06


10/06


11/06


12/06Alexza Pharmaceuticals, Inc.



100.00




114.57




105.76




95.89




86.13




86.02




82.26




94.48




95.53




98.24




133.84NASDAQ Composite



100.00




103.06




102.55




96.46




96.33




93.16




97.27




100.68




105.79




108.88




108.57NASDAQ Biotechnology



100.00




98.71




93.10




89.42




88.02




90.35




90.59




92.70




98.13




96.98




94.80   1/07


2/07


3/07


4/07


5/07


6/07


7/07


8/07


9/07


10/07


11/07


12/07


1/08


2/08113.40



117.74




151.12




126.79




113.75




97.18




103.17




96.47




101.76




95.65




102.94




95.06




74.03




74.27110.98



108.96




109.14




113.77




117.24




117.80




115.15




117.48




123.28




130.68




121.28




121.13




108.95




103.5998.05



95.04




92.46




100.59




99.12




96.72




95.82




97.12




103.07




107.49




104.33




98.01




96.15




95.00   3/08


4/08


5/08


6/08


7/08


8/08


9/08


10/08


11/08


12/08


1/09


2/09


3/09


4/0980.85



77.91




60.16




46.30




69.10




62.40




58.05




33.49




21.15




37.25




33.96




18.80




25.97




19.51103.67



110.07




115.10




104.83




104.88




106.33




93.40




77.32




69.39




71.68




67.32




63.14




69.60




77.7695.13



95.92




98.00




96.46




109.52




106.64




100.12




91.49




85.30




91.59




90.31




81.82




84.87




83.44  46




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##### Table of Contents



5/09


6/09


7/09


8/09


9/09


10/09


11/09


12/09


1/10


2/10


3/10


4/10


5/10


6/1024.56



27.85




31.02




31.14




26.44




25.15




25.85




28.20




30.55




30.67




31.55




39.25




39.01




31.9680.79



83.67




90.32




92.02




96.91




93.91




98.62




104.08




98.50




102.77




109.98




112.46




103.11




96.9186.00



91.28




99.06




97.75




100.46




91.98




98.10




101.24




103.81




106.04




110.27




107.87




97.09




93.92   7/10


8/10


9/10


10/10


11/10


12/1032
.55



33.14




37.25




12.22




10.62




14.69103
.59



97.58




109.30




115.63




115.14




122.3697
.86



95.55




103.89




107.64




103.99




109.14   The stock price performance included in this graph is not
    necessarily indicative of future stock price performance.
  Item 5B.
    Use
    of Proceeds from the Sale of Registered Securities    Item 5C.
    Treasury
    Stock   47




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Period FromDecember 19,2000(Inception) toYear Ended December 31,


December 31,2010


2009


2008


2007


2006


2010(In thousands, except per share data)Consolidated Statement of Operations Data:Revenue

$
42,876


$
9,514


$
486


$



$
1,028


$
59,821Operating expenses:Research and development


33,528



39,778



61,565



45,645



36,494



277,989General and administrative


14,000



15,406



17,641



14,888



9,969



92,110Restructuring charges






2,037















2,037Acquired in-process research and development






















3,916Total operating expenses


47,528



57,221



79,206



60,533



46,463



376,052Loss from operations


(4,652
)


(47,707
)


(78,720
)


(60,533
)


(45,435
)


(316,231
)Change in fair value of contingent consideration liability


4,838



(7,983
)














(3,145
)Interest income/(expense) and other income/(expense), net


(1,667
)


(375
)


1,679



4,623



1,909



8,183Net loss


(1,481
)


(56,065
)


(77,041
)


(55,910
)


(43,526
)


(311,193
)Consideration paid in excess of carrying value of the
    noncontrolling interest in Symphony Allegro, Inc.






(61,566
)














(61,566
)Loss attributed to noncontrolling interest in Symphony Allegro,
    Inc.






13,987



18,591



10,791



1,720



45,089Net loss attributable to Alexza common stockholders

$
(1,481
)

$
(103,644
)

$
(58,450
)

$
(45,119
)

$
(41,806
)

$
(327,670
)Basic and diluted net loss per share attributable to Alexza
    common stockholders

$
(0.03
)

$
(2.68
)

$
(1.81
)

$
(1.58
)

$
(2.13
)Shares used to compute basic and diluted net loss per share
    attributable to Alexza common stockholders


55,421



38,609



32,297



28,605



19,584   December 31,2010

2009

2008

2007

2006(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and marketable securities

$
41,449


$
19,916


$
37,556


$
69,391


$
42,623Investments held by Symphony Allegro, Inc.










21,318



39,449



49,956Working capital


8,031



(3,830
)


42,771



106,092



79,649Total assets


68,482



46,174



84,635



149,125



105,766Noncurrent portion of financing obligations


13,208







2,515



6,317



5,865Convertible preferred stock


















Deficit accumulated during development stage


(266,104
)


(264,623
)


(222,545
)


(164,095
)


(118,976
)Total stockholders equity (deficit)


12,290



(7,126
)


39,054



99,943



84,517  48




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following Managements Discussion and Analysis of
    Financial Condition and Results of Operations contains
    forward-looking statements that are based upon current
    expectations. In some cases, you can identify forward-looking
    statements by terminology such as may,
    will, should, expect,
    plan, anticipate, believe,
    estimate, predict, intend,
    potential or continue or the negative of
    these terms or other comparable terminology. Forward-looking
    statements involve risks and uncertainties. Our actual results
    and the timing of events could differ materially from those
    discussed in our forward-looking statements as a result of many
    factors, including those set forth under Risk
    Factors and elsewhere in this Annual Report on
    Form 10-K.
  Overview
  Staccato Staccato
  Staccato Staccato Staccato Staccato Staccato Staccato
  Lead
    product update
  tm ® End-of-Review
  1 1
 49




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##### Table of Contents



End-of-Review 1
  End-of-Review Staccato Staccato
    and/or
  Financing
    update
  Staccato Staccato Staccato Staccato Staccato Staccato 5-year
 50




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##### Table of Contents



and/or and/or
    24-month 24-month
    Staccato Staccato
     51




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##### Table of Contents



Critical
    Accounting Estimates and Judgments
      Preclinical
    Study and Clinical Trial Accruals
    
    fees paid to contract research organizations in connection with
    preclinical studies;
    fees paid to contract research organizations and other clinical
    sites in connection with clinical trials; and 52




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##### Table of Contents




    fees paid to contract manufacturers in connection with the
    production of components and drug materials for preclinical
    studies and clinical trials.    Share-Based
    Compensation
            Contingent
    Consideration Liability
  5-year Staccato Staccato
   53




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##### Table of Contents



Revenue
    Recognition
  Revenue Recognition in Financial Revision of Topic 13.
      Recently
    Issued Accounting Standards
  2009-13, 605-25, 2009-13
  2010-17, 2010-17 2010-17
 54




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##### Table of Contents



Results
    of Operations
  Comparison
    of Years Ended December 31, 2010 and 2009 and
    2008
  Revenue.
  Operating
    Expenses
  Research and Development Expenses.
  
    external research and development expenses incurred under
    agreements with third party contract research organizations and
    investigational sites where a substantial portion of our
    preclinical studies and all of our clinical trials are conducted;
    third party supplier, consultant and employee related expenses,
    which include salary and benefits; and
    facilities, depreciation and other allocated expenses, which
    include direct and allocated expenses for rent and maintenance
    of facilities, depreciation of leasehold improvements and
    equipment and laboratory and other supplies.    Year Ended December 31,2010


2009


2008Product candidate expenses

$
26,059


$
31,896


$
48,681General research


7,469



7,882



12,884Total research and development

$
33,528


$
39,778


$
61,565   Research and Development Expenses. Staccato
   55




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##### Table of Contents



General and Administrative Expenses.
  2009-2010
  Restructuring Charges Staccato
  Interest and Other Income, Net.
  Interest Expense.
  Change in the Fair Value of Contingent Consideration
    Liability. and/or and/or
   56




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##### Table of Contents



Loss Attributed to Noncontrolling Interest in Symphony
    Allegro.
  Liquidity
    and Capital Resources
       57




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##### Table of Contents




    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.    
    the scope, rate of progress, results and costs of our
    preclinical studies, clinical trials and other research and
    development activities;
    the terms and timing of any distribution, strategic partnerships
    or licensing agreements that we may establish;
    the cost, timing and outcomes of regulatory approvals;
    the number and characteristics of product candidates that we
    pursue;
    the cost and timing of establishing manufacturing, marketing and
    sales capabilities;
    the cost of establishing clinical and commercial supplies of our
    product candidates;
    the cost of preparing, filing, prosecuting, defending and
    enforcing any patent claims and other intellectual property
    rights; and
    the extent to which we acquire or invest in businesses, products
    or technologies, although we currently have no commitments or
    agreements relating to any of these types of transactions.   58




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##### Table of Contents



Contractual
    Obligations
        Staccato
       59




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##### Table of Contents



Payments Due by PeriodLess ThanTotal


1 Year


1-3 Years


3-5 Years


ThereafterEquipment financing obligations

$
443


$
443


$



$



$
Operating lease obligations


34,582



4,572



9,294



9,582



11,134Term note obligations


22,226



7,100



13,962



1,164



$
57,251


$
12,115


$
23,256


$
10,746


$
11,134   Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   60




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  ALEXZA
    PHARMACEUTICALS, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 Report of Independent Registered Public
    Accounting Firm


62Consolidated Balance Sheets as of
    December 31, 2010 and 2009


63Consolidated Statements of Operations for the
    years ended December 31, 2010, 2009 and 2008 and for the
    period from December 19, 2000 (inception) to
    December 31, 2010


64Consolidated Statements of Convertible Preferred
    Stock and Stockholders Equity (Deficit) for the period
    from December 19, 2000 (inception) to December 31,
    2010


65Consolidated Statements of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008 and for the
    period from December 19, 2000 (inception) to
    December 31, 2010


75Notes to Consolidated Financial Statements


76   61




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               
      62




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC
    (a development stage company)
 CONSOLIDATED
    BALANCE SHEETS  December 31,2010


2009(In thousands, except shareand per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
13,671


$
13,450Marketable securities


27,778



6,466Other receivables






1,406Prepaid expenses and other current assets


965



804Total current assets


42,414



22,126Property and equipment, net


24,361



23,598Restricted cash


400



400Other assets


1,307



50Total assets

$
68,482


$
46,174LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable

$
2,781


$
2,705Accrued clinical trial liabilities


216



303Other accrued liabilities


3,158



3,481Current portion of contingent consideration liability


5,300



13,202Other current liabilities






3,750Financing obligations


18,597



2,515Deferred revenues


4,331



Total current liabilities


34,383



25,956Deferred rent


14,609



15,708Noncurrent portion of contingent consideration liability


7,200



11,636Commitments (See Note 8)Stockholders equity (deficit):Preferred stock, $0.0001 par value, 5,000,000 shares
    authorized at December 31, 2010 and 2009; no shares issued
    and outstanding at December 31, 2010 or 2009






Common stock, $0.0001 par value; 100,000,000 shares
    authorized at December 31, 2010 and 2009; 59,766,328 and
    52,411,356 shares issued and outstanding at
    December 31, 2010 and 2009, respectively


6



5Additional paid-in capital


278,386



257,493Other comprehensive income (loss)


2



(1
)Deficit accumulated during development stage


(266,104
)


(264,623
)Total stockholders equity (deficit)


12,290



(7,126
)Total liabilities and stockholders equity (deficit)

$
68,482


$
46,174    63




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Period fromDecember 19,2000 (Inception)Year Ended December 31,


to December 31,2010


2009


2008


2010(In thousands, except per share amounts)Revenue

$
42,876


$
9,514


$
486


$
59,821Operating expenses:Research and development


33,528



39,778



61,565



277,989General and administrative


14,000



15,406



17,641



92,110Restructuring charges






2,037







2,037Acquired in-process research and development














3,916Total operating expenses


47,528



57,221



79,206



376,052Loss from operations


(4,652
)


(47,707
)


(78,720
)


(316,231
)Change in fair value of contingent consideration liability


4,838



(7,983
)






(3,145
)Interest and other income, net


(35
)


92



2,614



13,863Interest expense


(1,632
)


(467
)


(935
)


(5,680
)Net loss


(1,481
)


(56,065
)


(77,041
)


(311,193
)Consideration paid in excess of carrying value of the
    noncontrolling interest in Symphony Allegro, Inc.






(61,566
)






(61,566
)Loss attributed to noncontrolling interest in Symphony Allegro,
    Inc.






13,987



18,591



45,089Net loss attributable to Alexza common stockholders


(1,481
)


(103,644
)


(58,450
)


(327,670
)Net loss per share attributable to Alexza common stockholders

$
(0.03
)

$
(2.68
)

$
(1.81
)Shares used to compute net loss per share attributable to Alexza
    common stockholders


55,421



38,609



32,297    64




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)CONSOLIDATED STATEMENTS OF
    CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS
    EQUITY (DEFICIT)
  Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Issuance of common stock to founders at $0.22 per share in
    December 2000 in exchange for technology and cash of $8





$







$




454,536


$



$
100


$



$



$



$



$



$
100Issuance of Series A preferred stock for cash at $0.40 per
    share in July 2001, net of issuance costs of $9


2,500,000



991











































Issuance of Series A1 preferred stock at $1.55 per share in
    December 2001, in connection with merger


1,610,250



2,496











































Issuance of Series B preferred stock for cash at $1.40 per
    share in December 2001, net of issuance costs of $71


6,441,000



8,946











































Issuance of common stock in connection with merger at $1.10 per
    share in December 2001


















868,922







956























956Warrants assumed in merger transaction


























10























10Issuance of common stock for cash at $0.22 per share upon
    exercise of options in December 2001


















9,090







2























2Compensation expense related to consultant stock options


























3























3Net loss










































(5,652
)






(5,652
)Balance at December 31, 2001 (carried forward)


10,551,250


$
12,433






$




1,332,548


$



$
1,071


$



$



$



$
(5,652
)

$



$
(4,581
)    65




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2001 (brought forward)


10,551,250


$
12,433






$




1,332,548


$



$
1,071


$



$



$



$
(5,652
)

$



$
(4,581
)Issuance of common stock for cash at $0.22 per share upon
    exercise of options in February 2002


















10,606







3























3Issuance of warrants to purchase Series B preferred stock
    in March 2002, in connection with equipment financing loan






27











































Issuance of common stock for cash at $0.22 per share upon
    exercise of options in July 2002


















2,180































Issuance of common stock to stockholder at $0.99 per share in
    exchange for promissory note in July 2002


















53,156







53



(53
)


















Issuance of Series C preferred stock for cash at $1.56 per
    share in September 2002, net of issuance costs of $108


28,870,005



44,892











































Repurchase of common stock for cash at $1.05 per share in
    October 2002


















(2,634
)






(3
)






















(3
)Issuance of common stock for cash at $1.05 per share for
    services upon exercise of warrants in December 2002


















9,368







10























10Compensation expense related to consultant stock options


























10























10Unrealized gain on investments






































51











51Net loss










































(8,163
)






(8,163
)Balance at December 31, 2002 (carried forward)


39,421,255


$
57,352






$




1,405,224


$



$
1,144


$
(53
)

$



$
51


$
(13,815
)

$



$
(12,673
)    66




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2002 (brought forward)


39,421,255


$
57,352






$




1,405,224


$



$
1,144


$
(53
)

$



$
51


$
(13,815
)

$



$
(12,673
)Issuance of common stock for cash at $0.22, $0.99 and $1.10 per
    share upon exercise of options


















74,903







47























47Issuance of warrants to purchase Series C preferred stock
    in connection with equipment financing loan in January 2003






35











































Issuance of warrants to purchase Series C preferred stock
    in connection with equipment financing loan in September 2003






27











































Repurchase of common stock for cash at $1.05 per share in
    January 2003


















(1,172
)






(1
)






















(1
)Repurchase of common stock for cash at $0.22 per share in
    November 2003


















(14,772
)






(3
)






















(3
)Compensation expense related to consultant stock options


























31























31Deferred stock compensation expense related to modification of
    consultant stock option


























1







(1
)














Unrealized loss on investments






































(55
)










(55
)Net loss










































(14,328
)






(14,328
)Balance at December 31, 2003 (carried forward)


39,421,255


$
57,414






$




1,464,183


$



$
1,219


$
(53
)

$
(1
)

$
(4
)

$
(28,143
)

$



$
(26,982
)    67




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2003 (brought forward)


39,421,255


$
57,414






$




1,464,183


$



$
1,219


$
(53
)

$
(1
)

$
(4
)

$
(28,143
)

$



$
(26,982
)Cancellation of unvested common stock at $0.99 per share in
    March 2004


















(24,365
)






(24
)


24



















Repayment of vested portion of stockholder note receivable for
    cash






























29



















29Issuance of warrants to purchase Series C preferred stock
    in connection with equipment financing loan in April 2004






20











































Issuance of common stock for cash at $0.22, $0.99 and $1.10 per
    share upon exercise of options


















100,192







72























72Repurchase of common stock for cash at $1.05 per share in
    September 2004


















(404
)






























Issuance of Series D preferred stock at $1.29 per share in
    November and December 2004, net of issuance costs of $2,239


40,435,448



49,760











































Issuance of warrants to purchase common stock in connection with
    Series D financing in November 2004


























91























91Compensation expense related to consultant stock options


























40























40Compensation expense related to employee stock option
    modifications


























19























19Amortization of deferred stock compensation


































1















1Unrealized loss on investments






































(41
)










(41
)Net loss










































(16,625
)






(16,625
)Balance at December 31, 2004 (carried forward)


79,856,703


$
107,194






$




1,539,606


$



$
1,417


$



$



$
(45
)

$
(44,768
)

$



$
(43,396
)    68




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2004 (brought forward)


79,856,703


$
107,194






$




1,539,606


$



$
1,417


$



$



$
(45
)

$
(44,768
)

$



$
(43,396
)Issuance of common stock upon exercise of options $0.22, $0.99,
    $1.10, per share


















380,508







357























357Compensation expense related to consultant stock options


























195























195Deferred stock compensation, net of $4 reversal in connection
    with employee terminations


























3,329







(3,329
)














Amortization of deferred stock compensation,


































404















404Variable compensation expense


























442























442Unrealized gain on investments






































15











15Net loss










































(32,402
)






(32,402
)Balance at December 31, 2005 (carried forward)


79,856,703


$
107,194






$




1,920,114


$



$
5,740


$



$
(2,925
)

$
(30
)

$
(77,170
)

$



$
(74,385
)    69




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-in


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2005 (brought forward)


79,856,703


$
107,194






$




1,920,114


$



$
5,740


$



$
(2,925
)

$
(30
)

$
(77,170
)

$



$
(74,385
)Issuance of common stock for cash and shares upon exercise of
    options at a weighted average price of $1.28 per share


















159,446







195























195Issuance of common stock for cash under the Companys
    Employee Stock Purchase Plan


















131,682







896























896Issuance of common stock for shares upon exercise of warrant


















85,359































Issuance of common stock for cash, net of offering costs of
    $2,156


















6,325,000



1



44,901























44,902Conversion of convertible preferred stock into common stock


(79,856,703
)


(107,194
)










15,197,712



1



107,193























107,194Purchase of noncontrolling interest by Symphony Allegro, Inc,
    preferred shareholders














































36,463



36,463Compensation expense related to consultant stock options


























145























145Compensation expense related to fair value of employee share
    based awards issued after January 1, 2006


























1,601























1,601Amortization of deferred stock compensation


































727















727Reversal of deferred stock compensation in connection with
    employee terminations


























(495
)






495















Variable compensation expense


























(442
)






















(442
)Issuance of warrant to Symphony Allegro Holdings LLC


























10,708























10,708Unrealized gain on investments






































39











39Net loss










































(41,806
)


(1,720
)


(43,526
)Balance at December 31, 2006 (carried forward)





$







$




23,819,319


$
2


$
170,442


$



$
(1,703
)

$
9


$
(118,976
)

$
34,743


$
84,517    70




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


In


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-In


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2006 (brought forward)





$







$




23,819,319


$
2


$
170,442


$



$
(1,703
)

$
9


$
(118,976
)

$
34,743


$
84,517Issuance of common stock for cash and shares upon exercise of
    options at a weighted average price of $1.28 per share


















204,423







432























432Issuance of common stock for cash under the Companys
    Employee Stock Purchase Plan


















205,870







1,405























1,405Issuance of common stock upon vesting of restricted stock units


















8,245































Issuance of common stock for cash, net of offering costs of
    $4,743


















6,900,000



1



65,981























65,982Compensation expense related to consultant stock options


























75























75Compensation expense related to fair value of employee share
    based awards issued after January 1, 2006


























2,733























2,733Amortization of deferred stock compensation


































577















577Reversal of deferred stock compensation in connection with
    employee terminations


























(387
)






387















Unrealized gain on investments






































132











132Net loss










































(45,119
)


(10,791
)


(55,910
)Balance at December 31, 2007(carried forward)





$







$




31,137,857


$
3


$
240,681


$



$
(739
)

$
141


$
(164,095
)

$
23,952


$
99,943    71




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


In


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-In


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2007 (brought forward)





$







$




31,137,857


$
3


$
240,681


$



$
(739
)

$
141


$
(164,095
)

$
23,952


$
99,943Issuance of common stock and common stock warrant for cash


















1,250,000







9,840























9,840Issuance of common stock for cash upon exercise of options at a
    weighted average price of $1.55 per share


















104,428







161























161Issuance of common stock for cash under the Companys
    Employee Stock Purchase Plan


















305,146







1,172























1,172Issuance of common stock upon vesting of restricted stock units


















23,443































Compensation expense related to consultant stock options


























22























22Compensation expense related to fair value of employee share
    based awards issued after January 1, 2006


























4,633























4,633Amortization of deferred stock compensation


































437















437Reversal of deferred stock compensation in connection with
    employee terminations


























(83
)






83















Unrealized loss on investments






































(113
)










(113
)Net loss










































(58,450
)


(18,591
)


(77,041
)Balance at December 31, 2008





$







$




32,820,874


$
3


$
256,426


$



$
(219
)

$
28


$
(222,545
)

$
5,361


$
39,054    72




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingAccumulated


InterestConvertible














Additional


Stockholder


Deferred


Other


During the


In


TotalPreferred Stock


Preferred Stock


Common Stock


Paid-In


Note


Stock


Comprehensive


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


(Loss) Income


Stage


Allegro, Inc.


Equity (Deficit)(In thousands, except share and per share amounts)Balance at December 31, 2008 (brought forward)





$







$




32,820,874


$
3


$
256,426


$



$
(219
)

$
28


$
(222,545
)

$
5,361


$
39,054Issuance of common stock


















135,041































Issuance of common stock and common stock warrants for cash


















8,107,012



1



18,989























18,990Issuance of common stock and common stock warrants for the
    purchase of noncontrolling interest in Symphony Allegro,
    Inc.


















10,000,000



1



36,084























36,085Deemed dividend for purchase of noncontrolling interest in
    Symphony Allegro, Inc.


























(61,566
)


















8,626



(52,940
)Issuance of common stock for cash upon exercise of options at a
    weighted average price of $1.20 per share


















69,708







84























84Issuance of common stock for cash under the Companys
    Employee Stock Purchase Plan


















439,252







599























599Issuance of common stock upon vesting of restricted stock units


















839,469































Compensation expense related to consultant stock options


























53























53Compensation expense related to fair value of employee share
    based awards issued after January 1, 2006


























6,860























6,860Amortization of deferred stock compensation


































183















183Reversal of deferred stock compensation in connection with
    employee terminations


























(36
)






36















Unrealized loss on investments






































(29
)










(29
)Net loss










































(42,078
)


(13,987
)


(56,065
)Balance at December 31, 2009





$







$




52,411,356


$
5


$
257,493


$



$



$
(1
)

$
(264,623
)

$



$
(7,126
)  73




---



##### Table of Contents



Alexza Pharmaceuticals, Inc. StockholdersDeficit


NoncontrollingOther


Accumulated


InterestConvertible














Additional


Stockholder


Deferred


Comprehensive


During the


in


TotalPreferred Stock


Preferred Stock


Common Stock


Paid in


Note


Stock


(Loss)


Development


Symphony


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Receivable


Compensation


Income


Stage


Allegro, Inc.


(Deficit) Equity(In thousands, except share and per share balances)Balance at December 31, 2009 (brought forward)





$







$




52,411,356


$
5


$
257,493


$



$



$
(1
)

$
(264,623
)

$



$
(7,126
)Issuance of common stock and common stock warrants


















6,685,183



1



16,351























16,352Issuance of common stock warrants


























921























921Issuance of common stock for cash upon exercise of options at a
    weighted average price of $1.87 per share


















114,278







215























215Issuance of common stock for cash under the Companys
    Employee Stock Purchase Plan


















406,207







482























482Issuance of common stock upon vesting of restricted stock units


















149,304































Compensation expense related to consultant stock options


























28























28Compensation expense related to fair value of employee share
    based awards issued after January 1, 2006


























2,896























2,896Unrealized gain on investments






































3











3Net loss










































(1,481
)






(1,481
)Balance at December 31, 2010





$







$




59,766,328


$
6


$
278,386


$



$



$
2


$
(266,104
)

$



$
12,290    74




---



##### Table of Contents





ALEXZA
    PHARMACEUTICALS, INC
    (a development stage company)
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Period fromDecember 19,2000(Inception) toYear Ended December 31,


December 31,2010


2009


2008


2010(In thousands)Cash flows from operating activities:Net loss


(1,481
)


(56,065
)


(77,041
)


(311,193
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Share-based compensation expense


2,924



7,096



5,092



21,859Change in fair value of contingent consideration liability


(4,838
)


7,983







3,145Extinguishment of officer note receivable














2,300Issuance of common stock for intellectual property














92Charge for acquired in-process research and development














3,916Amortization of assembled workforce














222Amortization of debt discount and deferred interest


299



29



38



690Amortization of discount on
    available-for-sale
    securities


180



126



(797
)


(421
)Write-off of other asset


2,800











2,800Depreciation


4,557



4,850



5,294



26,166Loss on disposal of property and equipment


79



43



17



205Changes in operating assets and liabilities:Other receivables


1,406



(1,406
)


12,055



Prepaid expenses and other current assets


(161
)


326



247



(959
)Other assets


(71
)






(24
)


(2,696
)Accounts payable


76



(2,223
)


(278
)


2,652Accrued clinical trial expense and other accrued liabilities


(410
)


(2,715
)


111



(326
)Deferred revenues


4,331



(9,514
)


(486
)


4,331Other liabilities


(1,099
)


(1,678
)


701



17,999Net cash provided by (used in) operating activities


8,592



(53,148
)


(55,071
)


(229,218
)Cash flows from investing activities:Purchase of
    available-for-sale
    securities


(63,434
)


(13,259
)


(47,111
)


(401,606
)Maturities of
    available-for-sale
    securities


41,945



18,158



74,329



374,252Purchase of
    available-for-sale
    securities held by Symphony Allegro, Inc.














(49,975
)Maturities of
    available-for-sale
    securities held by Symphony Allegro, Inc.






16,436



18,131



45,093Decrease (increase) in restricted cash










204



(400
)Purchases of property and equipment


(9,178
)


(1,189
)


(2,732
)


(50,524
)Proceeds from disposal of property and equipment


29







25



57Cash paid for merger














(250
)Net cash provided by (used in) investing activities


(30,638
)


20,146



42,846



(83,353
)Cash flows from financing activities:Proceeds from issuance of common stock, common stock warrants
    and exercise of stock options and stock purchase rights


17,049



19,673



11,173



162,207Repurchase of common stock














(8
)Proceeds from issuance of convertible preferred stock














104,681Proceeds from repayment of stockholder note receivable














29Proceeds received from purchase of the noncontrolling interest
    in Symphony Allegro, Inc.






4,882







4,882Proceeds from purchase of non controlling interest by preferred
    shareholders in Symphony Allegro, Inc., net of fees














47,171Payment of contingent payment to Symphony Allegro Holdings, LLC


(7,500
)










(7,500
)Proceeds from term loans


14,806











33,738Payments of term loans


(2,088
)


(4,139
)


(4,249
)


(18,958
)Net cash provided by financing activities


22,267



20,416



6,924



326,242Net increase (decrease) in cash and cash equivalents


221



(12,586
)


(5,301
)


13,671Cash and cash equivalents at beginning of period


13,450



26,036



31,337



0Cash and cash equivalents at end of period


13,671



13,450



26,036



13,671Supplemental disclosures of cash flow informationCash paid for interest

$
1,080


$
467


$
935


$
3,732Non cash investing and financing activities:Conversion of convertible preferred stock to common stock

$



$



$



$
107,194Issuance of shares and warrants, net of warrant cancellation in
    conjunction with Symphony Allegro purchase

$



$
36,085


$



$
36,085Issuance of contingent consideration liability

$



$
16,855


$



$
16,855Issuance of warrants in conjunction with establishment of
    Symphony Allegro

$



$



$



$
10,708Issuance of warrants in conjunction with debt issuance

$
921


$



$



$
921    75




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    The
    Company and Basis of Presentation  Business
      Basis
    of Consolidation
    Registered
    Direct Equity Issuances
       76




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Unregistered
    Direct Equity Issuance
      Equity
    Financing Facility
  24-month
     77




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2.
    Need to
    Raise Additional Capital      3.
    Summary
    of Significant Accounting Policies  Use of
    Estimates
    Fair
    Value of Financial Instruments
    
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 that are
    observable, either directly or indirectly, such as quoted prices
    for similar assets or liabilities; quoted prices in markets that
    are not active; or other inputs that are observable or can be
    corroborated by observable market data for substantially the
    full term of the assets or liabilities.
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets or liabilities. 78




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2010

Level 1


Level 2


Level 3


TotalAssetsMoney market funds

$
12,750


$



$



$
12,750Available for sale debt securitiesCorporate debt securities

$



$
12,997


$



$
12,997Government-sponsored enterprises






14,781







14,781Total available for sale debt securities

$



$
27,778


$



$
27,778Total assets

$
12,750


$
27,778


$



$
40,528LiabilitiesContingent consideration liability

$



$



$
12,500


$
12,500Total liabilities

$



$



$
12,500


$
12,500   December 31, 2009

Level 1


Level 2


Level 3


TotalAssetsMoney market funds

$
10,421


$



$



$
10,421Available for sale debt securitiesGovernment-sponsored enterprises

$



$
5,217


$



$
5,217Corporate debt securities






3,500







3,500Total available for sale debt securities

$



$
8,717


$



$
8,717Total assets

$
10,421


$
8,717


$



$
19,138LiabilitiesContingent consideration liability

$



$



$
24,838


$
24,838Total liabilities

$



$



$
24,838


$
24,838     Contingent
    consideration liability
  Staccato Staccato
 79




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               80




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2010


2009(In thousands)Beginning balance

$
24,838


$
Acquisition date fair value measurement 
    August 26, 2009






16,855Payments made


(7,500
)


Adjustments to fair value measurement


(4,838
)


7,983Ending balance

$
12,500


$
24,838   Concentration
    of Credit Risk
    Cash
    Equivalents and Marketable Securities
      available-for-sale available-for-sale
    other-than-temporary
  Property
    and Equipment
   81




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restricted
    Cash
    Impairment
    of Long-Lived Assets
    Revenue
    Recognition
  Revenue Recognition in Financial Revision of Topic 13.
      Research
    and Development
     82




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income
    Taxes
      Comprehensive
    Income (Loss) Attributable to Alexza Common
    Stockholders
    Period fromDecember 19, 2000(Inception) to2010


2009


2008


December 31, 2010Net loss

$
(1,481
)

$
(56,065
)

$
(77,041
)

$
(311,193
)Change in unrealized income (loss) on marketable securities, net
    of taxes


3



(29
)


(113
)


2Comprehensive loss


(1,478
)


(56,094
)


(77,154
)


(311,191
)Comprehensive loss attributable to noncontrolling interest in
    Symphony Allegro. Inc., net of taxes






13,987



18,591



45,089Comprehensive loss attributable to Alexza common stockholders

$
(1,478
)

$
(42,107
)

$
(58,563
)

$
(266,102
)   Share-Based
    Compensation
     83




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009-2010
  Stock
    Options, Stock Purchase Rights and Restricted Stock
    Units
      2010

2009

2008Stock Option PlansWeighted-average expected term

5.0 years

5.0 years

5.0 yearsExpected volatility

84%

86%

67%Risk-free interest rate

2.0%

1.8%

3.1%Dividend yield

0%

0%

0%Employee Stock Purchase PlanWeighted-average expected term

1.93 Years

1.90 Years

1.65 yearsExpected volatility

79%

74%

71%Risk-free interest rate

1.6%

2.6%

2.7%Dividend yield

0%

0%

0%   Weighted-Average Expected Term
  Volatility
  Risk-Free Interest Rate
  Dividend Yield
  Forfeiture Rate
  Restricted Stock Units
 84




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Recently
    Issued Accounting Standards
  2009-13, 605-25, 2009-13
  2010-17, 2010-17 2010-17
  4.
    Net Loss
    per Share Attributable to Alexza Common Stockholders      Year Ended December 31,2010

2009

2008Outstanding stock options


4,559



4,570



3,710Unvested restricted stock units


1,168



706



123Warrants to purchase common stock


14,290



5,091



2,324  85




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Cash
    Equivalents and Marketable Securities    Amortized





UnrealizedDecember 31, 2010

Cost


Fair Value


Gain/(Loss)Money market funds

$
12,750


$
12,750


$
Corporate debt securities


12,994



12,997



3Government-sponsored enterprises


14,782



14,781



(1
)Total

$
40,526


$
40,528


$
2Less amounts classified as cash equivalents

$
(12,750
)

$
(12,750
)

$
Total investments

$
27,776


$
27,778


$
2   Amortized





UnrealizedDecember 31, 2009

Cost


Fair Value


Gain/(Loss)Money market funds

$
10,421


$
10,421


$
Government-sponsored enterprises


5,218



5,217



(1
)Corporate debt securities


3,500



3,500



Total

$
19,139


$
19,138


$
(1
)Less amounts classified as cash equivalents


(12,672
)


(12,672
)


Total investments

$
6,467


$
6,466


$
(1
)     6.
    Property
    and Equipment    December 31,2010


2009(In thousands)Lab equipment

$
10,862


$
11,702Manufacturing equipment


8,606


$
4,240Computer equipment and software


4,798



4,755Furniture


1,025



1,060Leasehold improvements


19,759



19,25545,050



41,012Less: accumulated depreciation


(20,689
)


(17,414
)$
24,361


$
23,598    86




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Other
    Accrued Liabilities    December 31,2010


2009(In thousands)Accrued compensation

$
1,557


$
2,174Accrued professional fees


798



630Other


803



6773,158



3,481   8.
    Commitments  Equipment
    Financing Obligations
    Term
    Loan Agreements
  Hercules
    Technology Growth Capital
      Autoliv
    ASP, Inc.
   87




---



##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        EquipmentFinancing


LoanObligations


Agreements


Total2011

$
427


$
5,407


$
5,8342012






6,396



6,3962013






6,082



6,0822014






1,115



1,115Thereafter










Total

$
427


$
19,000


$
19,427   Operating
    Leases
      month-to-month
    month-to-month
 88




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Lease


Sublease


NetPayments


Receipts


Payments2011

$
5,138


$
(566
)

$
4,5722012


5,263



(438
)


4,8252013


4,919



(451
)


4,4682014


4,934



(75
)


4,8592015


4,723







4,723Thereafter


11,135







11,135Total minimum payments

$
36,112


$
(1,530
)

$
34,582     Manufacturing
    and Supply Agreement
  Staccato
     89




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    9.
    License
    Agreements  Symphony
    Allegro, Inc.
  Staccato Staccato
       90




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Description

Fair ValueFair value of consideration transferred:10,000,000 shares of Alexza common stock

$
28,000Warrant consideration, net


8,085Fair value of contingent cash payments to Allegro stockholders


16,855Total consideration transferred


52,940Add: Deficit of noncontrolling interest in Allegro


8,626Excess consideration transferred over the carrying value of the
    noncontrolling interest in Allegro

$
61,566       Warrant

WarrantIssued

CancelledNumber of Shares

5,000,000

2,000,000Expected term

5.0 years

2.3 yearsExpected volatility

89%

117%Risk-free interest rate

2.46%

1.06%Dividend yield

0%

0%  91




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Endo
    Pharmaceuticals, Inc.
  Staccato Staccato
    Biovail
    Laboratories International SRL
  and/or
  Cypress
    Bioscience, Inc.
  Staccato Staccato
  Staccato Staccato Staccato
 92




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Staccato Staccato
  month-to-month
    10.
    Warrants       93




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               94




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Equity
    Incentive Plans  2005
    Equity Incentive Plan
        2005
    Non-Employee Directors Stock Option Plan
      Outstanding OptionsNumber of


Weighted AverageShares


Exercise PriceOptions granted


298,351


$
0.34Options exercised


(9,090
)

$
0.22Balance as of December 31, 2001


289,261


$
0.34Options granted


210,777


$
1.03Options exercised


(65,942
)

$
0.84Options forfeited


(10,909
)

$
0.22 95




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Outstanding OptionsNumber of


Weighted AverageShares


Exercise PriceBalance as of December 31, 2002


423,187


$
0.61Options granted


703,486


$
1.10Options exercised


(74,904
)

$
0.60Options forfeited


(50,092
)

$
0.57Balance as of December 31, 2003


1,001,677


$
0.95Options granted


893,952


$
1.10Options exercised


(100,192
)

$
0.74Options forfeited


(132,641
)

$
1.08Balance as of December 31, 2004


1,662,796


$
1.04Options granted


824,035


$
2.86Options exercised


(380,501
)

$
0.94Options forfeited


(98,310
)

$
1.08Balance as of December 31, 2005


2,008,020


$
1.80Options granted


848,075


$
7.71Options exercised


(160,662
)

$
1.28Options forfeited


(82,938
)

$
2.00Options cancelled


(1,453
)

$
8.64Balance as of December 31, 2006


2,611,042


$
5.23Options granted


1,054,656


$
9.10Options exercised


(204,423
)

$
2.11Options forfeited


(249,536
)

$
6.98Options cancelled


(4,875
)

$
6.60Balance as of December 31, 2007


3,206,864


$
6.56Options granted


1,472,171


$
5.26Options exercised


(104,428
)

$
1.55Options forfeited


(190,284
)

$
7.20Options cancelled


(200,975
)

$
7.81Balance as of December 31, 2008


4,183,348


$
6.14Options granted


1,394,632


$
2.48Options exercised


(69,708
)

$
1.20Options forfeited


(422,118
)

$
5.79Options cancelled


(345,655
)

$
6.08Balance as of December 31, 2009


4,740,499


$
5.17Options granted


425,071


$
2.77Options exercised


(114,278
)

$
1.87Options forfeited


(113,551
)

$
6.33Options cancelled


(419,085
)

$
8.18Balance as of December 31, 2010


4,518,656


$
4.72 96




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Outstanding OptionsNumber of


Weighted AverageShares


Exercise PriceOptions exercisable at:December 31, 2008


1,950,662


$
6.02December 31, 2009


2,865,898


$
5.71December 31, 2010


3,219,369


$
5.25         Outstanding


ExercisableRemaining







RemainingContractual

Aggregate





Contractual

AggregateNumber


Life

Intrinsic


Number


Life

IntrinsicExercise Price

of Shares


(In Years)

Value


of Shares


(In Years)

Value$1.10  1.38


454,744


3.96

$
46,000



454,744


3.96

$
46,0001.69  2.37


738,718


8.65






275,263


8.19


2.38  2.81


708,923


8.64






402,556


8.11


2.90  4.24


358,599


7.89






170,322


7.09


4.35  4.35


464,600


7.52






279,318


7.52


4.41  7.20


575,632


6.34






487,862


6.16


7.30  7.90


111,724


6.75






101,272


6.73


8.00  8.00


575,457


3.56






575,457


3.56


8.01  11.70


530,259


6.36






472,575


6.33


4,518,656


6.74

$
46,000



3,219,369


6.01

$
46,000    97




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedNumber


Averageof


Grant DateShares


Fair ValueOutstanding at January 1, 2006





$
Granted


34,680



7.00Released






Forfeited


(600
)


7.00Outstanding at December 31, 2006


34,080



7.00Granted


74,575



8.89Released


(8,245
)


7.00Forfeited


(7,285
)


7.71Outstanding at December 31, 2007


93,125



8.42Granted


112,423



4.35Released


(23,443
)


8.33Forfeited


(10,151
)


7.00Outstanding at December 31, 2008


171,954



5.86Granted


965,643



2.19Released


(839,469
)


2.31Forfeited


(101,858
)


4.03Outstanding at December 31, 2009


196,270



3.90Granted


1,445,284



2.54Released


(149,304
)


2.55Forfeited


(90,313
)


3.06Outstanding at December 31, 2010


1,401,937



2.60       98




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year

Number of Shares2001


363,6362002


770,7322003


454,5452004


1,000,0002005


25,5442006


1,327,9902007


676,3862008


2,174,8402009


656,4172010


1,037,500       2005
    Employee Stock Purchase Plan
        12.
    Restructuring
    Charges  Staccato
 99




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    401(k)
    Plan    14.
    Income
    Taxes      Year Ended December 31,2010


2009


2008Federal tax benefit at statutory rate

$
(525
)

$
(14,307
)

$
(19,873
)State tax benefit net of federal effect


(90
)


(2,385
)


(3,402
)Research and development credits


(1,502
)


(2,537
)


(2,693
)Other permanent differences


13



(31
)


19Share-based compensation


1,296



1,112



1,450Adjustment to basis in subsidiary


(1,927
)


3,180



Change in valuation allowance


2,740



14,662



24,567Other


(5
)


306



(68
)Total

$



$



$
     December 31,2010


2009Federal and state net operating loss carryforwards

$
90,114


$
79,479Federal and state research and development credit carryforwards


13,331



11,840Accrued liabilities


8,008



9,410Capitalized research and development costs


16,142



25,675Other


1,695



49Total deferred tax assets


129,290



126,453Valuation allowance


(129,290
)


(126,453
)Net deferred tax assets

$



$
    100




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           101




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Balance at January 1, 2008

$
2,246Additions based on tax positions taken during a prior period


Reductions based on tax positions taken during a prior period


(1,067
)Additions based on tax positions taken during the current period


401Reductions based on tax positions taken during the current period


Reductions related to settlement of tax matters


Reductions related to a lapse of applicable statute of
    limitations


Balance at December 31, 2008

$
1,580Additions based on tax positions taken during a prior period


645Reductions based on tax positions taken during a prior period


Additions based on tax positions taken during the current period


385Reductions based on tax positions taken during the current period


Reductions related to settlement of tax matters


Reductions related to a lapse of applicable statute of
    limitations


Balance at December 31, 2009

$
2,610Additions based on tax positions taken during a prior period


46Reductions based on tax positions taken during a prior periodAdditions based on tax positions taken during the current period


302Reductions based on tax positions taken during the current period


Reductions related to settlement of tax matters


Reductions related to a lapse of applicable statute of
    limitations


Balance at December 31, 2010

$
2,958       15.
    Subsequent
    Events  Employee
    Stock Option Exchange Program
     102




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##### Table of Contents



ALEXZA
    PHARMACEUTICALS, INC.
    (a development stage company)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    16.
    Quarterly
    Results (Unaudited)    Quarter EndedMarch 31

June 30

September 30

December 31Fiscal 2010Revenues

$



$



$
744


$
42,132Profit (loss) from operations


(12,616
)


(12,102
)


(8,520
)


28,586Net income (loss )


(13,412
)


(12,893
)


(591
)


25,415Net loss attributable to Alexza common stockholders


(13,412
)


(12,893
)


(591
)


25,415Basic net loss per share attributable to Alexza common
    stockholders


(0.26
)


(0.24
)


(0.01
)


0.43Diluted net loss per share attributable to Alexza common
    stockholders


(0.26
)


(0.24
)


(0.01
)


0.42Fiscal 2009Revenues

$
9,514


$



$



$
Loss from operations


(6,843
)


(16,835
)


(13,007
)


(11,022
)Net loss


(6,904
)


(16,969
)


(12,425
)


(19,767
)Net loss attributable to Alexza common stockholders


(1,714
)


(9,740
)


(72,423
)


(19,767
)Basic and diluted net loss per share attributable to Alexza
    common stockholders


(0.05
)


(0.29
)


(1.95
)


(0.39
)  103




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures:
      Managements
    Annual Report on Internal Control Over Financial
    Reporting:
  Rules 13a-15(f) 15d-15(f). Internal Control  Integrated Framework Form 10-K
 104




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                 
      105




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting:
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Securities
    Authorized For Issuance Under Equity Compensation
    Plans
   106




---



##### Table of Contents



(a)


(b)


(c)Number of Securities


Weighted- Average


Number of Securities Remainingto be Issued upon


Exercise Price of


Available for Future IssuanceExercise of


Outstanding


Under Equity CompensationOutstanding Options,


Options, Warrants


Plans (Excluding SecuritiesPlan Category

Warrants and Rights


and Rights


Reflected in Column (a))Equity compensation plans approved by security holders


5,920,593


$
3.60



324,309
(1)(2)Equity compensation plans not approved by security holders










Total


5,920,593



3.60



324,309     (1)
    
    The 2005 Plan incorporates an evergreen formula pursuant to
    which on each January 1, the aggregate number of shares
    reserved for issuance under the 2005 Plan will increase by a
    number equal to the lesser of (i) 1,000,000 shares,
    (ii) 2% of the outstanding shares on December 31 of the
    preceding calendar year, or (iii) an amount determined by
    our Board.The Directors Plan incorporates an evergreen formula
    pursuant to which on each January 1, the aggregate number
    of shares reserved for issuance under the Directors Plan
    will increase by the number of shares subject to options granted
    during the preceding calendar year less the number of shares
    that revert back to the share reserve during the preceding
    calendar year.The ESPP incorporates an evergreen formula pursuant to which on
    each January 1, the aggregate number of shares reserved for
    issuance under the ESPP will increase by a number equal to the
    lesser of (i) 250,000 shares, (ii) 1% of the
    outstanding shares on December 31 of the preceding calendar
    year, or (iii) an amount determined by our Board.(2)
    
    Of these shares, 149,273 shares remained available as of
    December 31, 2010 under the 2005 Plan, 175,000 shares
    under the Directors Plan and 36 under the ESPP.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements
    Financial Statement Schedules
    Exhibits
 107




---



##### Table of Contents



EXHIBIT INDEX  ExhibitNumber

Description of Document3
.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)10
.1

Form of Director/Officer Indemnification Agreement entered into
    between Registrant and each of its directors and officers(9)*10
.2

Form of Change of Control Agreement*(15)10
.3

2005 Equity Incentive Plan(7)*10
.4

Form of Option Grant Notice, Form of Option Agreement and Form
    of Notice of Exercise to 2005 Equity Incentive Plan(1)*10
.5

2005 Non-Employee Directors Stock Option Plan(1)10
.6

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
.7

2005 Employee Stock Purchase Plan(1)*10
.8

Form of Offering Document to 2005 Employee Stock Purchase
    Plan(1)*10
.9

Development Agreement between Registrant and Autoliv ASP, Inc.
    dated October 3, 2005(1)10
.10

Master Security Agreement between Registrant and General
    Electric Capital Corporation dated May 17, 2005, as amended
    on May 18, 2005(1)10
.11

Promissory Note between Registrant and General Electric Capital
    Corporation dated June 15, 2005(1)10
.12

Promissory Note between Registrant and General Electric Capital
    Corporation dated August 24, 2005(1)10
.13

Warrant to Purchase shares of Series B Preferred Stock
    issued to Silicon Valley Bank dated March 20, 2002(1)10
.14

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
.15

Warrant to Purchase shares of Series C Preferred Stock
    issued to Silicon Valley Bank dated September 19, 2003(1)10
.16

Warrant to Purchase shares of Series C Preferred Stock
    issued to Silicon Valley Bank dated April 7, 2004(1)10
.17

Lease Agreement between the Brittania, LLC and Registrant dated
    August 25, 2006(2)10
.18

First Amendment to Lease between Britannia Hacienda VIII LLC and
    Registrant dated May 4, 2007(3)10
.19

Second Amendment to Lease between Britannia Hacienda VIII LLC
    and Registrant dated August 28, 2007(4)10
.20

Manufacturing and Supply Agreement between Registrant and
    Autoliv ASP, Inc., dated November 2, 2007(5)10
.21

Offer Letter between Registrant and Michael Simms, dated
    January 23, 2008(5)10
.22

Stock and Warrant Purchase Agreement between Registrant and
    Biomedical Investment Fund Pte Ltd., dated March 26,
    2008(6)10
.23

Warrant to Purchase shares of Common Stock issued to Biomedical
    Investment Fund Pte Ltd. dated March 27, 2008(6)10
.24

Form of Notice of Grant of Award and Stock Unit Award Agreement
    to 2005 Equity Incentive Plan(15)10
.25

2009-2010
    Performance Based Incentive Program*(10)10
.26

Amended and Restated Purchase Option Agreement by and among
    Registrant, Symphony Allegro Holdings LLC and Symphony Allegro,
    Inc. dated June 15, 2009*(11) 108




---



##### Table of Contents



ExhibitNumber

Description of Document10
.27

Warrant Purchase Agreement between Registrant and Symphony
    Allegro Holdings LLC dated June 15, 2009(11)10
.28

Amended and Restated Registration Rights Agreement between
    Registrant and Symphony Allegro Holdings LLC dated June 15,
    2009(11)10
.29

Form of Amendment to Change of Control Agreement*(12)10
.30

Form of Warrants to Purchase Shares of Common Stock, dated
    August 26, 2009(13)10
.31

Letter Agreement among Registrant, Symphony Allegro Holdings
    LLC, Symphony Capital Partners, L.P. and Symphony Strategic
    Partners, LLC, dated August 26, 2009(13)10
.32

Securities Purchase Agreement by and among Registrant and the
    purchasers identified therein, dated September 29, 2009(14)10
.33

Form of Warrants to Purchase shares of Common Stock, dated
    October 5, 2009(14)10
.34

Collaboration and License Agreement between Registrant and
    Biovail Laboratories International SRL dated February 9,
    2010(16)10
.35

Manufacture and Supply Agreement between Registrant and Biovail
    Laboratories International SRL dated February 9, 2010(16)10
.36

Loan and Security Agreement between Registrant and Hercules
    Technology Growth Capital, Inc. dated May 4, 2010(17)10
.37

Warrant issued by Registrant to Hercules Technology Growth
    Capital, Inc. dated May 4, 2010(17)10
.38

Common Stock Purchase Agreement between Registrant and Azimuth
    Opportunity Ltd. dated May 26, 2010(18)10
.39

Amendment No. 1 to Manufacturing and Supply Agreement
    between Registrant and Autoliv ASP, Inc. dated June 30,
    2010(17)10
.40

Promissory Note issued by Registrant to Autoliv ASP, Inc. dated
    June 30, 2010(17)10
.41*

Form of RSU Agreement between Registrant and each of Thomas B.
    King, August J. Moretti, James V. Casella and Michael J. Simms
    dated May 19, 2010(19)10
.42

Amendment No. 1 to Loan and Security Agreement between
    Registrant and Hercules Technology Growth Capital, Inc. dated
    September 20, 2010(20)10
.43

Form of Warrant to Purchase Shares of Common Stock dated
    August 10, 2010(21)10
.44

Amendment to 2005 Non Employee Directors Option Plan(20)10
.45u

2011 Cash Bonus Plan10
.46u

Amendment No. 2 to Manufacturing and Supply Agreement
    between Registrant and Autoliv ASP, Inc. dated February 15,
    201110
.47u

Promissory Note issued by Registrant to Autoliv ASP, Inc. dated
    February 15, 201110
.48

Form of Notice of Grant of Stock Options to 2005 Equity
    Incentive Plan(22)*10
.49

Form of Option Agreement to 2005 Equity Incentive Plan(22)*10
.50

Form of Option Agreement to 2005 Equity Incentive Plan(22)*14
.1

Alexza Pharmaceuticals, Inc. Code of Business Conduct for
    Employees, Executive Officers and Directors(2)21
.1u

Subsidiaries of Registrant23
.1u

Consent of Independent Registered Public Accounting Firm24
.1u

Power of Attorney included on the signature pages hereto31
.1u

Section 302 Certification of CEO.31
.2u

Section 302 Certification of CFO.32
.1u

Section 906 Certifications of CEO and CFO.     *
    
    Management contract or compensation plan or arrangement.u
    
    Filed herein 109




---



##### Table of Contents




    
    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.
    
    Confidential treatment has been requested 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 May 30, 2008.(8)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on July 14, 2008.(9)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on June 5, 2006.(10)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on February 24, 2009.(11)
    
    Incorporated by reference to our Current Report on
    Form 8-K/A
    (File
    No. 000-51820)
    as filed with the SEC on June 26, 2009.(12)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on August 5, 2009.(13)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on August 26, 2009.(14)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on September 30, 2009.(15)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    (File No.
    000-51820)
    as filed with the SEC on March 10, 2009.(16)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    (File No.
    000-51820)
    as filed with the SEC on March 9, 2010.(17)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on July 26, 2010.(18)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on May 26, 2010.(19)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q/A
    (File
    No. 000-51820)
    as filed with the SEC on July 28, 2010.(20)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on November 9, 2010.(21)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on August 5, 2010.(22)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File No.
    000-51820)
    as filed with the SEC on February 22, 2011. 110




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##### Table of Contents



SIGNATURES      By:
    /s/  Thomas
    B. King   President and Chief Executive Officer
    POWER OF
    ATTORNEY
      Signature

Title/s/  THOMAS
    B. KINGThomas
    B. King

President, Chief Executive Officer and Director
    (Principal Executive Officer)/s/  AUGUST
    J. MORETTIAugust
    J. Moretti

Senior Vice President, Chief Financial Officer,
    General Counsel and Secretary
    (Principal Financial Officer)/s/  MARK
    K. OKIMark
    K. Oki

Vice President, Finance and Controller
    (Principal Accounting Officer)/s/  HAL
    V. BARRONHal
    V. Barron

Director/s/  ANDREW
    L. BUSSERAndrew
    L. Busser

Director/s/  SAMUEL
    D. COLELLASamuel
    D. Colella

Director/s/  ALAN
    D. FRAZIERAlan
    D. Frazier

Director 111




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##### Table of Contents



Signature

TitleDeepika
    R. Pakianathan

DirectorJ.
    Leighton Read

Director/s/  GORDON
    RINGOLDGordon
    Ringold

Director/s/  ISAAC
    STEINIsaac
    Stein

Director/s/  JOSEPH
    L. TURNERJoseph
    L. Turner

Director  112




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description of Document3
.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)10
.1

Form of Director/Officer Indemnification Agreement entered into
    between Registrant and each of its directors and officers(9)*10
.2

Form of Change of Control Agreement*(15)10
.3

2005 Equity Incentive Plan(7)*10
.4

Form of Option Grant Notice, Form of Option Agreement and Form
    of Notice of Exercise to 2005 Equity Incentive Plan(1)*10
.5

2005 Non-Employee Directors Stock Option Plan(1)10
.6

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
.7

2005 Employee Stock Purchase Plan(1)*10
.8

Form of Offering Document to 2005 Employee Stock Purchase
    Plan(1)*10
.9

Development Agreement between Registrant and Autoliv ASP, Inc.
    dated October 3, 2005(1)10
.10

Master Security Agreement between Registrant and General
    Electric Capital Corporation dated May 17, 2005, as amended
    on May 18, 2005(1)10
.11

Promissory Note between Registrant and General Electric Capital
    Corporation dated June 15, 2005(1)10
.12

Promissory Note between Registrant and General Electric Capital
    Corporation dated August 24, 2005(1)10
.13

Warrant to Purchase shares of Series B Preferred Stock
    issued to Silicon Valley Bank dated March 20, 2002(1)10
.14

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
.15

Warrant to Purchase shares of Series C Preferred Stock
    issued to Silicon Valley Bank dated September 19, 2003(1)10
.16

Warrant to Purchase shares of Series C Preferred Stock
    issued to Silicon Valley Bank dated April 7, 2004(1)10
.17

Lease Agreement between the Brittania, LLC and Registrant dated
    August 25, 2006(2)10
.18

First Amendment to Lease between Britannia Hacienda VIII LLC and
    Registrant dated May 4, 2007(3)10
.19

Second Amendment to Lease between Britannia Hacienda VIII LLC
    and Registrant dated August 28, 2007(4)10
.20

Manufacturing and Supply Agreement between Registrant and
    Autoliv ASP, Inc., dated November 2, 2007(5)10
.21

Offer Letter between Registrant and Michael Simms, dated
    January 23, 2008(5)10
.22

Stock and Warrant Purchase Agreement between Registrant and
    Biomedical Investment Fund Pte Ltd., dated March 26,
    2008(6)10
.23

Warrant to Purchase shares of Common Stock issued to Biomedical
    Investment Fund Pte Ltd. dated March 27, 2008(6)10
.24

Form of Notice of Grant of Award and Stock Unit Award Agreement
    to 2005 Equity Incentive Plan(15)10
.25

2009-2010
    Performance Based Incentive Program*(10)10
.26

Amended and Restated Purchase Option Agreement by and among
    Registrant, Symphony Allegro Holdings LLC and Symphony Allegro,
    Inc. dated June 15, 2009*(11) 113




---



##### Table of Contents



ExhibitNumber

Description of Document10
.27

Warrant Purchase Agreement between Registrant and Symphony
    Allegro Holdings LLC dated June 15, 2009(11)10
.28

Amended and Restated Registration Rights Agreement between
    Registrant and Symphony Allegro Holdings LLC dated June 15,
    2009(11)10
.29

Form of Amendment to Change of Control Agreement*(12)10
.30

Form of Warrants to Purchase Shares of Common Stock, dated
    August 26, 2009(13)10
.31

Letter Agreement among Registrant, Symphony Allegro Holdings
    LLC, Symphony Capital Partners, L.P. and Symphony Strategic
    Partners, LLC, dated August 26, 2009(13)10
.32

Securities Purchase Agreement by and among Registrant and the
    purchasers identified therein, dated September 29, 2009(14)10
.33

Form of Warrants to Purchase shares of Common Stock, dated
    October 5, 2009(14)10
.34

Collaboration and License Agreement between Registrant and
    Biovail Laboratories International SRL dated February 9,
    2010(16)10
.35

Manufacture and Supply Agreement between Registrant and Biovail
    Laboratories International SRL dated February 9, 2010(16)10
.36

Loan and Security Agreement between Registrant and Hercules
    Technology Growth Capital, Inc. dated May 4, 2010(17)10
.37

Warrant issued by Registrant to Hercules Technology Growth
    Capital, Inc. dated May 4, 2010(17)10
.38

Common Stock Purchase Agreement between Registrant and Azimuth
    Opportunity Ltd. dated May 26, 2010(18)10
.39

Amendment No. 1 to Manufacturing and Supply Agreement
    between Registrant and Autoliv ASP, Inc. dated June 30,
    2010(17)10
.40

Promissory Note issued by Registrant to Autoliv ASP, Inc. dated
    June 30, 2010(17)10
.41*

Form of RSU Agreement between Registrant and each of Thomas B.
    King, August J. Moretti, James V. Casella and Michael J. Simms
    dated May 19, 2010(19)10
.42

Amendment No. 1 to Loan and Security Agreement between
    Registrant and Hercules Technology Growth Capital, Inc. dated
    September 20, 2010(20)10
.43

Form of Warrant to Purchase Shares of Common Stock dated
    August 10, 2010(21)10
.44

Amendment to 2005 Non Employee Directors Option Plan(20)10
.45u

2011 Cash Bonus Plan10
.46u

Amendment No. 2 to Manufacturing and Supply Agreement
    between Registrant and Autoliv ASP, Inc. dated February 15,
    201110
.47u

Promissory Note issued by Registrant to Autoliv ASP, Inc. dated
    February 15, 201110
.48

Form of Notice of Grant of Stock Options to 2005 Equity
    Incentive Plan(22)*10
.49

Form of Option Agreement to 2005 Equity Incentive Plan(22)*10
.50

Form of Option Agreement to 2005 Equity Incentive Plan(22)*14
.1

Alexza Pharmaceuticals, Inc. Code of Business Conduct for
    Employees, Executive Officers and Directors(2)21
.1u

Subsidiaries of Registrant23
.1u

Consent of Independent Registered Public Accounting Firm24
.1u

Power of Attorney included on the signature pages hereto31
.1u

Section 302 Certification of CEO.31
.2u

Section 302 Certification of CFO.32
.1u

Section 906 Certifications of CEO and CFO.     *
    
    Management contract or compensation plan or arrangement.u
    
    Filed herein 114




---



##### Table of Contents




    
    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.
    
    Confidential treatment has been requested 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 May 30, 2008.(8)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on July 14, 2008.(9)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on June 5, 2006.(10)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on February 24, 2009.(11)
    
    Incorporated by reference to our Current Report on
    Form 8-K/A
    (File
    No. 000-51820)
    as filed with the SEC on June 26, 2009.(12)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on August 5, 2009.(13)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on August 26, 2009.(14)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on September 30, 2009.(15)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    (File
    No. 000-51820)
    as filed with the SEC on March 10, 2009.(16)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    (File
    No. 000-51820)
    as filed with the SEC on March 9, 2010.(17)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on July 26, 2010.(18)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on May 26, 2010.(19)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q/A
    (File
    No. 000-51820)
    as filed with the SEC on July 28, 2010.(20)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    (File
    No. 000-51820)
    as filed with the SEC on November 9, 2010.(21)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on August 5, 2010.(22)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    (File
    No. 000-51820)
    as filed with the SEC on February 22, 2011. 115