Allos Therapeutics’ (ALTH) fourth quarter loss per share came in at 22 cents, worse than the Zacks Consensus Estimate of 20 cents and a loss of 18 cents reported in the year-ago period. For 2009, the company reported a loss per share of 81 cents compared to 69 cents in 2008.
In Sep 2009, Allos received accelerated approval from the US Food and Drug Administration (FDA) for Folotyn for the treatment of patients with relapsed or refractory PTCL. During the third quarter conference call, the company stated the pricing of the drug – the average wholesale acquisition cost as $3,125 for the 20 mg vial and $6,250 for the 40 mg vial.
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 after the launch to confirm the drug’s benefits to patients. The drug was launched commercially in Jan 2010 although it has been made available to patients since Oct 2009. Allos recorded $3.6 million in revenues for the fourth quarter and the full year.
A 73.5% rise in operating expense during the quarter was primarily responsible for the increased losses. Following the approval of Folotyn, Allos has done the necessary preparations for its commercial launch. This led to a 149% increase in selling, general and administrative expenses. However, research and development expenses recorded a 1.4% decline to $7.9 million.
Allos exited 2009 with $158.5 million in cash, cash equivalents and investments in marketable securities. In Oct last year, the company received net proceeds of approximately $93 million from a public offering of 14 million shares. Allos had to raise funds to support the commercial launch of Folotyn in addition to carrying out its other clinical trials.
For 2010, Allos expects its total operating costs in the range of $120 – $130 million. The company has not provided any revenue guidance. A marketing authorization application of Folotyn is expected to be submitted in Europe by the fourth quarter of 2010. We have a Neutral recommendation on the stock.
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