We are awaiting the decision of the US Food and Drug Administration’s (FDA) cancer advisory committee regarding approval of Allos Therapeutics’ (ALTH) Pralatrexate at a meeting scheduled for September 2, 2009. The company is seeking FDA approval for Pralatrexate for the treatment of patients with T-cell lymphoma.
Although the FDA is not bound to follow the decision of the advisory panel, it generally does so. A positive recommendation from the panel increases the possibility of gaining approval for pralatrexate from the FDA. The final decision is expected by September 24th.
In February this year, Allos Therapeutics came out with encouraging data from the clinical trials of pralatrexate and filed a New Drug Application (NDA) in March based on it. Pralatrexate has “orphan drug” status from the FDA and European Medicines Agency (EMEA) for the treatment of patients with T-cell lymphoma, indicating that Allos will obtain seven years of marketing exclusivity in the US and ten years of marketing exclusivity in EU countries. During this period, the FDA and EMEA may not approve another company’s application for the same drug for the same orphan indication.
Apart from T-cell lymphoma, the drug is being studied for several other indications including non-small cell lung cancer (NSCLC), bladder cancer, non-Hodgkin’s lymphoma (NHL) and Hodgkin’s disease.
Although Allos is making significant progress on the drug development front, we are concerned about the company’s weak cash position. Since its inception in 1992, Allos has not generated any revenues from product sales and has experienced significant net losses and negative cash flows from operations. It is raising funds by issuing shares, thus diluting shareholder value.
In April 2009, the company made an underwritten public offering of 7.75 million shares mopping up $46.9 million. Allos is depending heavily on pralatrexate and the company has little to fall back on, should the drug fail to receive FDA approval.
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