We are awaiting the US Food and Drug Administration’s (FDA) decision regarding Allos Therapeutics’ (ALTH) lymphoma drug Folotyn. The company, which is seeking approval of Folotyn for the treatment of relapsed or refractory peripheral T-Cell lymphoma (PTCL), was assigned a Prescription Drug User Fee Act (PDUFA) date of Sept. 24.
We are optimistic about the approval of Folotyn based on the FDA advisory panel’s favorable recommendation earlier this month. The board voted 10-4 in favor of the drug and said that new treatments were required for the disease.
However, we are still wary as the studies conducted by Allos did not record robust data. The number of patients who responded to the treatment was rather low (27% of 115 patients) with the majority of them responding only partially. Moreover, effect of the treatment lasted for less than 14 weeks in more than half of these patients. The panel voted in favor of the drug despite the lukewarm clinical data due to the current unmet medical need of these patients.
At present, there is no approved drug for T-Cell lymphoma, which affects immunity. According to the FDA, though PTCL is a less common type of non-Hodgkin’s lymphoma, about 9,500 people in the U.S. suffer from the condition. The drug is also being studied for several other indications, including non-small cell lung cancer, bladder cancer, non-Hodgkin’s lymphoma and Hodgkin’s disease.
Although we are pleased with the favorable panel recommendation, we remain concerned about the prospects of final approval. Since its inception in 1992, Allos has not generated any revenue from product sales and has experienced significant losses and negative cash flows from operations. In this scenario, the FDA approval becomes crucial as the company is depending heavily on Folotyn. We have a Neutral recommendation on the stock.
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