Allos Therapeutics: Small-Cap Cancer Biotech with FDA Catalyst Print
Monday, 27 April 2009 04:05

Allos Therapeutics (ALTH) is small-cap cancer biotech which filed a NDA on 3/25/09 for pralatrexate (PDX) in the treatment of patients with relapsed/refractory peripheral T-cell lymphoma (PTCL). ALTH requested priority (six-month) review for the application, with an expected 60-day period for the FDA to accept the filing and rule on priority review status.

The priority review PDUFA date would be 9/25/09 (versus 1/25/10 for standard, 10-month review). PTCL comprises a biologically diverse group of blood-based cancers that typically have a worse prognosis than other types of lymphoma and are less responsive to traditional chemotherapy regimens. There are currently no agents approved by the FDA for the treatment of patients with PTCL.

PDX is classified as an anti-folate drug which targets and accumulates selectively within cancer cells based on a protein receptor (RFC-1) that is over-expressed compared to normal cells. Once PDX enters cancer cells, it undergoes a process known as polyglutamylation which leads to high retention of the drug within cancer cells and resistance to drug resistance adaptations in cancer cells such as efflux pumps which act to hasten chemotherapy drug removal. As an anti-folate drug, PDX interferes with DNA synthesis, halting the rapid division associated with cancer cells and killing them while largely sparing healthy cells.

On 4/19/09, ALTH presented new data at the American Association for Cancer Research Annual Meeting which demonstrated the anti-cancer activity of its investigational drug, PDX, in colon, ovarian, lung, prostate, and head and neck cancer cell lines. The preclinical research further showed that the antiproliferative effects against these cancer lines were achieved at drug concentrations that are attainable in humans. The presentation also demonstrated a rapid anti-cancer effect for the drug (within 24-72 hours) and the identification of a potential enzyme biomarker (folyl-polyglutamate synthetase or FPGS) to predict which patients will benefit from treatment with the drug.

In early April, ALTH closed a public offering with UBS as the underwriter (with an option granted to purchase an additional 1.2M shares at the public offering price through the end of April) for the sale of 7.75 million shares of common stock at price of $6.30 each (about 10% higher than the current price of $5.75 per share prior to the market open on 4/27/09) for net proceeds of $48.6M. ALTH ended 2008 with cash/equivalents of $84M and used about $43M to fund operations for the year.

In 2009, ALTH projects a cash burn rate of $50-54M, which is about 10% above the net proceeds from the early April public offering and would result in a 2009 year-end cash balance around $80M. ALTH has retained the exclusive worldwide commercial rights to PDX for all indications and

plans to commercialize the drug through its own oncology-focused sales and

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marketing team.

ALTH began patient enrollment (expects to complete enrollment during 3Q09) in an international Phase 2b clinical trial evaluating PDX and Tarceva (erlotinib) in patients with Stage IIIB/IV non-small cell lung cancer (NSCLC) who are, or have been, cigarette smokers who have failed treatment with at least one prior platinum-based chemotherapy regimen. Another Phase 2 clinical trial also initiated enrollment to evaluate PDX in patients with advanced or metastatic relapsed transitional cell carcinoma (TCC) of the urinary bladder.

Earlier clinical trials for PDX include a Phase 1/2a study evaluating the drug in combination with gemcitabine and

vitamin B12/folic acid supplementation for the treatment of relapsed or refractory non-Hodgkin's lymphoma (NHL) and Hodgkin's disease. A Phase 1 open label study is evaluating PDX in patients with relapsed or refractory cutaneous T-cell lymphoma. A Phase 1/2 open label study will evaluate PDX in relapsed or refractory NHL and Hodgkin's disease to determine dosing schedules and the potential clinical utility of the drug for the treatment of B-cell lymphoma.

ALTH is a promising small-cap cancer biotech with the potential for approval of PDX by the end of September if the FDA grants a priority review for the recently submitted NDA in the treatment of PTCL. The Company has zero debt, about 89M shares of stock outstanding after the recent public offering, and should end the year with around $80M in cash.

The active clinical development program for PDX serves as an additional catalyst as new data becomes available and will also support additional indications for the drug - translating into better outcomes and more treatment options for cancer patients and higher sales for ALTH if successful.

Disclosure: No positions.

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