Allos Therapeutics’ (ALTH) third quarter loss per share came in at 21 cents, in line with the Zacks Consensus Estimate. However, the loss increased compared to the net loss of 16 cents reported in the year ago period. Loss increased primarily due to a 41% rise in operating expense. The huge increase in general and administrative expenses by 113% led to a rise in operating expenses.
The quarter has been quite significant for Allos. In September, the company received accelerated approval from the US Food and Drug Administration (FDA) for pralatrexate (Folotyn) for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL). Folotyn is Allos’ first drug to receive FDA approval. While the drug is available to patients since October, the commercial launch is scheduled for January 2010.
Allos is increasing its sales force from the current strength of 25 to 50 and is taking the necessary preparations for its launch. During the conference call, the company stated the pricing of the drug; the average wholesale acquisition cost is $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.
Allos has also provided an update on the development status of its other pipeline candidates. The company completed patient enrollment (n=201) in the phase IIb, randomized trial comparing pralatrexate with Roche’s (RHHBY.PK) erlotinib (Tarceva) in patients with stage IIIB/IV non-small cell lung cancer (NSCLC) who are − or have been − cigarette smokers and are not responding to chemotherapy. The top line results from this trial are expected in the first half of 2010. In addition, Allos initiated patient enrollment in a phase II study of Folotyn in patients with aggressive relapsed or refractory B-cell non-Hodgkin’s lymphoma (NHL).
At the end of the quarter, cash, cash equivalents and investments in marketable securities were $84.1 million. Earlier in October, Allos received net proceeds of approximately $93 million from a public offering of 14 million shares. We believe the funds raised will be sufficient to support the commercial launch of Folotyn in addition to carrying out the other clinical trials. We carry a Neutral recommendation on the stock.
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