Allos Therapeutics Reports Third Quarter 2009 Financial Results

November 3, 2009 4:01 PM EST

-- Conference Call Scheduled for Today at 4:30 p.m. ET --

WESTMINSTER, Colo.--(BUSINESS WIRE)-- Allos Therapeutics, Inc. (Nasdaq: ALTH) today reported results for the third quarter of 2009. For the three months ended September 30, 2009, the Company reported a net loss of $18.7 million, or ($0.21) per share. This compares to a net loss of $13.2 million, or ($0.16) per share, for the third quarter of 2008. For the nine months ended September 30, 2009, the Company reported a net loss of $50.6 million, or ($0.58) per share, compared to a net loss of $37.0 million, or ($0.50) per share, for the same period last year. Net cash used in operating activities, together with the $5.8 million milestone payment under our license agreement for FOLOTYNTM (pralatrexate injection), was $47.8 million for the nine months ended September 30, 2009. Cash, cash equivalents and investments in marketable securities as of September 30, 2009 were $84.1 million. In October 2009, the Company received net proceeds of approximately $93.0 million from a public offering of 14 million shares of the Company's common stock.

"During the quarter, we achieved a significant milestone by obtaining accelerated approval for FOLOTYN for use as a single agent for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma," said Paul L. Berns, president and chief executive officer of Allos Therapeutics. "Importantly, this represents our first U.S. indication and marks our emergence as a commercial oncology company. With a prioritized product development and commercialization plan for FOLOTYN and a solid financial position, we believe we have established a strong foundation for continued progress."

Recent Highlights

    --  Announced the U.S. Food and Drug Administration (FDA) granted
        accelerated approval for FOLOTYN for use as a single agent for the
        treatment of patients with relapsed or refractory peripheral T-cell
        lymphoma (PTCL) on September 24, 2009. This indication is based on
        overall response rate. Clinical benefit such as improvement in
        progression free survival or overall survival has not been demonstrated.
        FOLOTYN is the first and only drug approved by the FDA for this
        indication and represents a new treatment option for patients with
        relapsed or refractory PTCL.
    --  Announced FOLOTYN availability for commercial sale in the U.S. on
        October 5, 2009. The Company intends to market and sell FOLOTYN in the
        U.S. through its commercial organization, which includes 25 sales
        specialists that the Company plans to increase to approximately 50
        specialists in advance of the planned commercial launch of FOLOTYN in
        January 2010.
    --  Established a patient assistance program named ASAP (Allos Support for
        Assisting Patients) to provide reimbursement resources for the
        uninsured, underinsured and insured and reimbursement support for health
        care professionals.
    --  Received notification from the National Comprehensive Cancer Network
        (NCCN) that it has updated the NCCN Clinical Practice Guidelines in
        Oncology(TM) for Non-Hodgkin's Lymphomas to include FOLOTYN as a
        suggested treatment regimen for patients with second-line PTCL.
    --  Completed patient enrollment in the Company's investigational Phase 2b,
        randomized, international, multi-center clinical trial comparing
        pralatrexate and erlotinib (Tarceva(R)) 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. The objective of this Phase 2b trial is to assess
        the treatment effect of pralatrexate in certain pre-specified subsets of
        patients with advanced NSCLC where the Company believes the agent has
        the potential to provide clinical benefit. Patient enrollment was
        initiated in January 2008 and was completed in July 2009, having
        enrolled 201 patients. The Company currently expects to report top line
        results from this trial in the first half of 2010.
    --  Initiated patient enrollment in an investigational Phase 2 study of
        FOLOTYN in patients with aggressive relapsed or refractory B-cell
        non-Hodgkin's lymphoma. This single-arm, open-label, multi-center study
        will seek to enroll approximately 27 evaluable patients in up to 10
        investigative sites worldwide. The primary endpoint of the study is
        objective response rate (complete and partial response) per
        International Workshop Criteria. Secondary endpoints include duration of
        response, progression free survival, overall survival, and the safety
        and tolerability of FOLOTYN.
    --  Strengthened the Company's balance sheet with an underwritten public
        offering of 14 million shares of newly issued common stock in October,
        resulting in net proceeds of approximately $93.0 million after
        underwriting discounts, commissions and other estimated offering
        expenses.

2009 Financial Guidance

The Company reaffirms prior financial guidance that net cash use in operating activities, together with the $5.8 million milestone payment under the Company's license agreement for FOLOTYN as discussed below, is expected to approximate $65 million to $70 million for the year ending December 31, 2009. The Company's financial guidance for 2009 includes the phase-in of key investments associated with its commercial, medical affairs and manufacturing operations in preparation for its planned commercial launch of FOLOTYN in January 2010, and the $1.5 million and $5.8 million milestone payments under the Company's license agreement for FOLOTYN paid upon FDA acceptance and approval of the Company's New Drug Application, respectively, during the nine months ended September 30, 2009. The $5.8 million milestone payment was recorded as an intangible asset and in net cash used in investing activities as of and for the nine months ended September 30, 2009, respectively.

Financial projections entail a high level of uncertainty due to, among other factors, the variability involved in predicting clinical trial initiation timelines, enrollment rates and results, and the cost of commercial activities.

Conference Call Information

The Company will host a conference call to review its third quarter results on Tuesday, November 3, 2009 at 4:30 p.m. ET. Participants can access the call at 1-877-941-8610 (U.S. and Canada) or +480-629-9819 (international). To access the live audio webcast or the subsequent archived recording, visit the "Investors - Presentations and Events" section of the Company's website at www.allos.com. Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call. Callers can access the replay by dialing 800-406-7325 (domestic) or 303-590-3030 (international). The passcode is 4169927#. The webcast will be recorded and available for replay on the Company's website until November 13, 2009.

About Allos Therapeutics

Allos Therapeutics, Inc. (Nasdaq: ALTH) is a biopharmaceutical company committed to the development and commercialization of innovative anti-cancer therapeutics. Allos is currently focused on the development and commercialization of FOLOTYNTM (pralatrexate injection), a folate analogue metabolic inhibitor. FOLOTYN is the first and only drug approved in the U.S. for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma. Allos is also developing FOLOTYN in other potential indications. Allos retains exclusive worldwide rights to FOLOTYN for all indications. Allos is headquartered in Westminster, CO. For additional information, please visit www.allos.com.

Important Safety Information

Warnings and Precautions:

FOLOTYN may suppress bone marrow function, manifested by thrombocytopenia, neutropenia, and anemia. Monitor blood counts and omit or modify dose for hematologic toxicities.

Mucositis may occur. If >= Grade 2 mucositis is observed, omit or modify dose.

Patients should be instructed to take folic acid (1.0 -1.25 mg orally on a daily basis) and receive vitamin B12 (1 mg intramuscularly every 8-10 weeks) to potentially reduce treatment-related hematological toxicity and mucositis.

FOLOTYN can cause fetal harm. Women should avoid becoming pregnant while being treated with FOLOTYN, and pregnant women should be informed of the potential harm to the fetus.

Use caution and monitor patients when administering FOLOTYN to patients with moderate to severe renal function impairment.

Elevated liver function test abnormalities may occur and require monitoring. If liver function test abnormalities are >= Grade 3, omit or modify dose.

Adverse Reactions:

The most common adverse reactions observed in PROPEL were mucositis (70%), thrombocytopenia (41%), nausea (40%), and fatigue (36%). The most common serious adverse events (>3%), regardless of causality, were pyrexia, mucositis, sepsis, febrile neutropenia, dehydration, dyspnea and thrombocytopenia. Forty-four percent of patients experienced a serious adverse event while on study or within 30 days after their last dose of FOLOTYN. Twenty-three percent of patients discontinued treatment due to adverse reactions.

Drug Interactions:

Co-administration of drugs subject to renal clearance (e.g., probenecid, NSAIDs, and trimethoprim/sulfamethaxazole) may result in delayed renal clearance.

Use in Specific Patient Population:

Nursing mothers should be advised to discontinue nursing or the drug, taking into consideration the importance of the drug to the mother.

For additional important safety information, please see the full prescribing information for FOLOTYN at www.allos.com.

Safe Harbor Statement

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include the Company's anticipated timeline and size of its sales force for its planned commercial launch of FOLOTYN; the Company's projected timeline for announcing top line results from the Company's Phase 2b clinical trial of FOLOTYN in patients with advanced non-small cell lung cancer; the Company's projected net cash use in operating activities for fiscal 2009; and other statements that are other than statements of historical facts. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "potential," "continue," and other similar terminology or the negative of these terms, but their absence does not mean that a particular statement is not forward-looking. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. Important factors that may cause actual results to differ materially include, but are not limited to, the risks and uncertainties associated with developing adequate sales, marketing and distribution capabilities; the acceptance of FOLOTYN in the marketplace; the status of reimbursement from third party payers; the Company's dependence on third party manufacturers; the Company's compliance with applicable regulatory requirements, including the healthcare fraud and abuse laws and the Company's post-marketing requirements; and the Company's access to capital to support its future operations, including product development and commercialization plans for FOLOTYN. Additional information concerning these and other factors that may cause actual results to differ materially from those anticipated in the forward-looking statements is contained in the "Risk Factors" section of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, and in the Company's other periodic reports and filings with the Securities and Exchange Commission. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. All forward-looking statements are based on information currently available to the Company on the date hereof, and the Company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation, except as required by law.

Note: The Allos logo and FOLOTYN name are trademarks of Allos Therapeutics, Inc.

Tarceva is a registered trademark of OSI Pharmaceuticals, Inc.

ALLOS THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share information)

(unaudited)

                 Three Months Ended              Nine Months Ended

                 September 30,                   September 30,

                 2009            2008             2009            2008

Operating
expenses:

Research and     $ 6,026         $ 6,361          $ 18,901        $ 17,739
development

Clinical           1,512           1,728            5,774           4,799
manufacturing

Marketing,
general and        11,327          5,326            26,326          15,776
administrative

Amortization of
intangible         7               --               7               --
asset

Total operating    18,872          13,415           51,008          38,314
expenses

Loss from          (18,872    )    (13,415    )     (51,008    )    (38,314    )
operations

Interest and
other income,      125             254              304             1,323
net

Loss before        (18,747    )    (13,161    )     (50,704    )    (36,991    )
income taxes

Income tax         77              --               77              --
benefit

Net loss         $ (18,670    )  $ (13,161    )   $ (50,627    )  $ (36,991    )

Net loss per
share: basic       (0.21      )    (0.16      )     (0.58      )    (0.50      )
and diluted

Weighted
average shares:    89,543,949      80,752,024       86,581,372      73,554,904
basic and
diluted

ALLOS THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS

(in thousands)

(unaudited)

                                            September 30,  December 31,

                                            2009           2008

ASSETS

Cash, cash equivalents and investments in   $ 84,115       $ 83,966
marketable securities

Intangible asset, net                         5,793          --

Other assets                                  4,451          4,067

Property and equipment, net                   1,990          1,307

Total assets                                $ 96,349       $ 89,340

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                         $ 10,944         9,875

Stockholders' equity                          85,405         79,465

Total liabilities and stockholders' equity  $ 96,349       $ 89,340

    Source: Allos Therapeutics, Inc.

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