Recently, Allos Therapeutics (ALTH) received orphan drug status from the US Food and Drug Administration (FDA) for pralatrexate to treat bladder cancer. The drug is being studied in a phase II clinical trial in patients with advanced or metastatic transitional cell carcinoma (TCC) of the urinary bladder, a form of bladder cancer.
The orphan drug designation brings with it seven years of marketing exclusivity in the US during which the FDA may not approve another company’s application for any drug containing the same active ingredient and for the same orphan indication. Additionally, this status also provides several other benefits such as advice on clinical trials, tax credits for research expenses and grant funding for research of rare diseases.
Huge potential lies in the area of bladder cancer due to the huge unmet medical need. It is estimated that more than 70,000 new cases of bladder cancer are diagnosed each year. However, pralatrexate has a long way to go before being approved for this indication.
Pralatrexate is marketed in the US under the brand name Folotyn for the treatment of patients with T-cell lymphoma. The drug received accelerated approval from the FDA in September 2009. It is the only approved product of Allos.
We believe Folotyn’s approval for the T-cell lymphoma indication will provide major relief to patients suffering from this disease as prior to Folotyn there was no approved drug. While the drug has been available to patients since October, it was launched commercially in January 2010.
Allos has agreed to conduct additional clinical trials to further verify the benefit of Folotyn. The requirement of additional trials comes with accelerated FDA approval as the agency requires further studies post launch to confirm the drug’s benefits. The company plans to initiate this study in 2010 and will submit results to the FDA by Jun 30, 2017.
Following the first quarter results, Allos reiterated its guidance for 2010. The company expects total operating costs in the range of $120 – $130 million (excluding non-cash stock-based compensation expense). Given the recent launch of Folotyn, Allos has not provided any revenue guidance. A marketing authorization application for Folotyn is expected to be submitted in Europe by the fourth quarter of 2010. Additionally, the company intends to target other markets including Japan.
We are currently Neutral on the stock.
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