Allon Therapeutics releases first quarter 2012 operating results
VANCOUVER, B.C. — Allon Therapeutics Inc. (TSX: NPC) today announced its unaudited operating results for the three months ended March 31, 2012 and updated clinical development plans for 2012.
Gordon McCauley, Allon’s President and CEO, said the Company’s most significant achievement during the first quarter of 2012 was its progress on the pivotal clinical trial evaluating lead drug candidate davunetide, as a treatment for progressive supranuclear palsy (PSP).
McCauley said the independent Data Safety Monitoring Board (DSMB) that is monitoring the trial completed its third review and unanimously recommended continuing the trial without any change or modification to the protocol.
McCauley also noted that Allon’s completion of a $10 million equity financing on May 2 ensures that the Company is in a strong financial position as it enters the final stages of the pivotal trial. “We are encouraged by the addition of new sophisticated institutional investors from the U.S. and Europe as well as the continued support from our existing shareholders,” McCauley said.
“My colleagues have done an exemplary job executing this study and consequently we remain on track to complete patient dosing in our pivotal trial, analyze data and release top-line results by late 2012,” McCauley said. “With the recent equity financing of $10 million, we have secured the financial resources needed to complete these objectives and to continue to advance davunetide towards commercialization as a treatment for PSP if the trial results warrant.”
PSP is a devastating neurodegenerative disease with no approved treatments and a market potential in excess of $700 million in the U.S. and Europe.
A DSMB is a group of clinical experts with the primary responsibility of monitoring the safety and well-being of subjects and to assure scientific integrity of the study. A DSMB is independent of the company and the clinical investigators, who are blinded from the safety and efficacy data until all treatment has been completed.
Other achievements during the First Quarter included:
- Receipt of a U.S. patent that covers the use of the Company’s neuroprotective technology platform in the treatment of peripheral neuropathy. This includes the Company’s lead drug candidate, davunetide, and pipeline product AL-309 as treatments for peripheral neuropathy caused by anti-cancer drugs
- Advancement into a second set of studies funded by the Michael J. Fox Foundation for Parkinson’s Research to conduct preclinical research that will help determine the potential of davunetide as a treatment for Parkinson’s disease.
- The announcement March 9 that major shareholder Neuro Discovery II Limited Partnership provided a $2.5 million bridge loan facility to ensure Allon’s financial flexibility as it continues its pivotal study in PSP.
- Receipt of an Australian patent covering the use of Allon’s drug candidates, including davunetide and pipeline product AL-309, to treat certain types of peripheral neurotoxicity.
- Publication in the February edition of Neuropsychiatric Disease and Treatment of a review of davunetide as a potential treatment of PSP.
Results of operations
Allon reported a net loss of $2,778,704 ($0.03 per share) for the three months ended March 31, 2012, compared to a net loss of $2,974,076 ($0.04 per share) for the three months ended March 31, 2011, representing a decrease in net loss of $195,372.
For the three ended March 31, 2012, research and development expenses were $2,140,531 compared to $2,013,795 for the three months ended March 31, 2011. Research and development expenses were slightly higher compared to the same period in 2011 due to an increase in clinical trial activities related to PSP. Research and development expenses also included amortization and depreciation expenses of $127,372 (2011 – $127,539) and share-based compensation of $21,571 (2011 – $8,758).
For the three months ended March 31, 2012, general and administrative expenses were $636,149 compared to $850,885 for the three months ended March 31, 2011. Decline in general and administrative expenses in 2012 as compared to 2011 was primarily due to lower expenses associated with corporate development activities. Included in general and administrative expenses were amortization and depreciation expenses of $2,873 (2011 – $3,796) and share-based compensation of $81,013 (2011 – $45,734).
The Company’s other income and expenses are primarily comprised of interest income/expense and foreign exchange gains/losses. During the three months ended March 31, 2012, the Company incurred interest expense of $25,744 in relation to the convertible loan entered into on March 7, 2012. The Company earned interest revenue of $43 during the three months ended March 31, 2012 compared to $4,900 for the same period in 2011. Reduced interest earnings resulted from lower average cash balances during the three months ended March 31, 2012 compared to the same period in 2011.
Foreign exchange gain was $23,677 for the three months ended March 31, 2012. This compared to a loss of $114,296 for the same period in 2011. The Company’s foreign exchange exposure is primarily limited to the translation of U.S. dollar denominated balances in cash, cash equivalents and accounts payable to Canadian dollars. The foreign exchange gain in the first quarter of 2012 resulted from the impact of the U.S. dollar’s decline against the Canadian dollar on the Company’s U.S. dollar denominated accounts payable. This compared to the same period in 2011 when even though the U.S. dollar declined as well, the Company had a larger U.S. dollar cash balance which generated an exchange loss that more than offset the exchange gain from its U.S. dollar denominated accounts payable.
Allon Therapeutics Inc. is a clinical-stage biotechnology company focused on bringing to market innovative central nervous system therapies. Allon’s lead drug davunetide is proceeding in a pivotal clinical trial in an orphan indication, in Progressive Supranuclear Palsy (PSP), under a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA). The trial is fully enrolled and is expected to complete patient dosing and release top-line data by late 2012. This pivotal trial is based upon statistically significant human efficacy demonstrated in patients with amnestic mild cognitive impairment (a precursor to Alzheimer’s disease), cognitive impairment associated with schizophrenia, and in positive biomarker data.
The Company is listed on the Toronto Stock Exchange under the trading symbol “NPC”.
Forward Looking Statements
Statements contained herein, other than those which are strictly statements of historical fact may include forward-looking information. Such statements will typically contain words such as “believes”, “may”, “plans”, “will”, “estimate”, “continue”, “anticipates”, “intends”, “expects”, and similar expressions. While forward-looking statements represent management’s outlook based on assumptions that management believes are reasonable, forward-looking statements by their nature are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by them. Such factors include, among others, the inherent uncertainty involved in scientific research and drug development, Allon’s early stage of development, lack of product revenues, its additional capital requirements, the risks associated with successful completion of clinical trials and the long lead-times and high costs associated with obtaining regulatory approval to market any product which Allon may eventually develop. Other risk factors include the limited protections afforded by intellectual property rights, rapid technology and product obsolescence in a highly competitive environment and Allon’s dependence on collaborative partners and contract research organizations. These factors can be reviewed in Allon’s public filings at www.sedar.com and should be considered carefully. Readers are cautioned not to place undue reliance on such forward-looking statements. Similarly, nothing in this press release is meant to promote a pharmaceutical product or make a regulated claim of efficacy.