Allon Therapeutics Inc.
TSX : NPC

Allon Therapeutics Inc.

March 09, 2009 08:30 ET

Allon Reports 2008 Audited Operating Results and Updates 2009 Plans

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 9, 2009) - Allon Therapeutics Inc. (TSX:NPC) today announced its audited operating results for 2008 and updated clinical development plans for 2009.

Gordon McCauley, Allon's President and CEO, said the Company made "dramatic progress" in 2008 in its mission to develop a disease-modifying therapy for Alzheimer's disease.

"Our most significant achievement resulted in acknowledgment from Alzheimer's disease physicians and researchers that our drugs are leading candidates to be the first treatments to slow the disease course of Alzheimer's," said McCauley.

McCauley said this acknowledgment resulted from the release of human efficacy data in February 2008 from Allon's Phase IIa clinical trial evaluating the Company's lead product, davunetide intranasal (AL-108), in patients with amnestic mild cognitive impairment (aMCI), a precursor to Alzheimer's disease. This data set showed a statistically significant, dose dependent, and durable effect of davunetide intranasal (AL-108) resulting in specific memory function improvement in these patients.

Subsequently, Allon was invited to present its human and animal data in July 2008 to the International Conference on Alzheimer's Disease and Related Disorders (ICAD 2008), the world's largest Alzheimer's conference.

McCauley said the presentations "validated the therapeutic potential of addressing the 'tangles' component of the Alzheimer's 'plaques and tangles' pathologies" and also established Allon's technology as the most clinically advanced therapy related to tau protein - and the only technology that can prevent the formation of tangles.

Another key success for Allon in 2008 was a $20 million equity financing in July. At year-end, the Company had cash and short-term investments of $19.1 million, giving Allon one of the strongest balance sheets among development-stage biotech companies and sufficient financial resources to fund drug development into 2011.

McCauley said world economic events interfered with the Company's efforts in 2008 to conclude a drug development partnership with a major pharmaceutical company. "We remain actively engaged in this process and are confident that major pharmaceutical companies are keenly interested in our neuroprotection drugs and technology. We believe that we will conclude a partnership in 2009."

Allon has announced it will take the next major step in the Company's Alzheimer's program - a Phase IIb trial in Alzheimer's patients - after it signs a partnership.

Allon plans to add value to davunetide intranasal (AL-108) in 2009 by undertaking two Phase II clinical trials.

A Phase II trial will evaluate davunetide intranasal (AL-108) in frontotemporal dementia (FTD). FTD describes several cognitive disorders that strike people in their prime, typically 45 to 65 years of age and is characterized by rapid decline and death often within five years of diagnosis. No treatment exists for FTD.

A second Phase II trial will use positron emission tomography (PET scans) to enhance the understanding of dosing, pharmacokinetics and pharmacodynamics of davunetide intranasal (AL-108).

Beyond these specific clinical milestones, Allon will not advance further programs until the financial climate has improved. "These days the only added value recognized by the marketplace is human clinical progress. Therefore, we will continue to advance our clinical-stage assets, reduce non-essential costs, and examine ways to broaden our pipeline without impacting our clinical milestones or cash," said McCauley.

2008 achievements

Allon's achievements in 2008 include:

- February 26: Reported human efficacy and demonstrated safety in Phase IIa trial of davunetide intranasal (AL-108) in patients with amnestic mild cognitive impairment (aMCI), a precursor to AD.

- June 10: Received a United States patent for composition of AL-309, lead compound from Allon's second technology platform, activity-dependent neurotrophic factor (ADNF).

- July 15: Completion of a $20 million equity financing.

- July 28-30: Presented data at ICAD 2008 validating the therapeutic potential of addressing the "tangles" component of the classic Alzheimer's "plaques and tangles" pathology.

- August 12: Confirmed in a pharmacokinetics study that davunetide intranasal (AL-108) and davunetide intravenous (AL-208) penetrate the brains of healthy adults and Alzheimer's patients in sufficient quantities to enable a therapeutic effect.

- October 7: Issued a U.S. patent covering peptides combined from Allon's two technology platforms.

- November 18: Issued a U.S. patent for potential treatments for peripheral neuropathy.

2009 milestones

Allon milestones for 2009 are:

- Execute a partnership agreement with a major pharmaceutical company.

- Commence a Phase IIb clinical trial in Alzheimer's with a partner.

- Initiate a Phase II clinical trial in patients with frontotemporal dementia.

- Initiate a Phase II PET clinical trial in Alzheimer's patients.

- Announce top-line results from the Phase II clinical trial in schizophrenia-related cognitive impairment.

Financials

Allon reported a net loss of $11,312,034 ($0.17 per share) for the year ended December 31, 2008 compared to a net loss of $12,681,350 ($0.24 per share) for the year ended December 31, 2007, representing a year over year decreased loss of $1,369,317.

For the fiscal year ended December 31, 2008, research and development expenses were $8,634,382 compared to $9,091,320 for the fiscal year ended December 31, 2007. The decline in research and development expenses results from the decrease in clinical trial activity in the second half of 2008, partly offset by higher patent expenses. In 2007, the Company had three ongoing Phase II clinical programs, two of which were fully funded by the Company. Two of the three clinical programs were completed during 2008, in the first and third quarters respectively.

For the year ended December 31, 2008, general and administrative expenses were $3,458,931 compared to $2,633,847 for the year ended December 31, 2007. The increase of $825,084 compared to 2007 primarily resulted from additional business development and investor relations activity, and the addition of personnel.

Amortization expense for the fiscal year ended December 31, 2008 was $549,186 compared to $546,288 for the fiscal year ended December 31, 2007. Allon depreciates tangible assets and intellectual property on a straight-line basis. The $2,898 year over year increase primarily resulted from acquiring more fixed assets.

For the year ended December 31, 2008, the Company recognized other income of $1,330,465 compared to other expenses of $409,895 for the year ended December 31, 2007. The increase of $1,740,361 is primarily due to increased foreign exchange gain on translation of U.S. balances to Canadian dollars, partly offset by decreased interest earned on cash reserves.

At December 31, 2008 the Company had cash and cash equivalents of $19,093,499 compared to $13,126,865 of cash and short-term investments at December 31, 2007. The company's cash equivalents and short-term investments are held in high-grade, liquid commercial paper and other low risk investments which are recorded at fair value. The Company has no exposure to liquidity or other risks associated with certain Asset-Backed Securities. Management expects cash on hand and interest revenue to fund operations into 2011.

About Allon's neuroprotective platforms

Allon's two neuroprotective technology platforms are based on two naturally occurring proteins produced by the brain in response to a range of insults. The platforms are activity-dependent neuroprotective protein (ADNP) and activity-dependent neurotrophic factor (ADNF).

Since the two platforms are based on different proteins, the drug candidates from each represent different classes of molecule with different therapeutic mechanisms and distinct commercial opportunities. Clinical-stage drugs davunetide intranasal (AL-108) and davunetide intravenous (AL-208) are derived from ADNP, while preclinical stage drug AL-309 is derived from ADNF.

ADNP drugs davunetide intranasal (AL-108) and davunetide intravenous (AL-208), focused on Alzheimer's disease and cognitive impairment, are administered intranasally and intravenously respectively. ADNF drug candidate AL-309 is being developed for the treatment of peripheral neuropathies and is administered orally or subcutaneously.

About Allon

Allon Therapeutics Inc. is a clinical-stage biotechnology company developing treatments for major neurodegenerative conditions. In Q1 2008, Allon's drug davunetide intranasal (AL-108) demonstrated human efficacy in amnestic mild cognitive impairment, a precursor to Alzheimer's disease. Allon has Phase II human efficacy programs pursuing large underserved markets: Alzheimer's disease, frontotemporal dementia and schizophrenia-related cognitive impairment. The Company is listed on the Toronto Stock Exchange under the trading symbol "NPC" (Neuro Protection Company™) and based in Vancouver. For additional information please visit the Company's website: www.allontherapeutics.com.

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 and Allon disclaims any obligation to update or announce changes in any such factors except in its periodic filings.

Contact Information