Allon Therapeutics Inc.
TSX : NPC

Allon Therapeutics Inc.

November 14, 2005 08:30 ET

Allon Reports Third Quarter Operating Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 14, 2005) - Allon Therapeutics Inc. (TSX:NPC), The Neuro Protection Company™, reported today in its third quarter 2005 operating results that it achieved several important milestones, including the commencement of a Phase I human clinical trial evaluating AL-208 as a treatment for mild cognitive impairment (MCI) associated with cardiac artery bypass graft (CABG or bypass) surgery. Allon remains on track to report data from this Phase I trial and to commence a Phase IIa trial for this indication in early 2006.

Other achievements during the quarter included a private placement of common shares to a group of largely institutional investors for gross proceeds of $6.3 million, which provides the Company with approximately two years cash, and the commencement of trading on September 21, 2005 on the Toronto Stock Exchange.

Gordon McCauley, President and CEO of Allon, said the Company remains focused on building shareholder value through consistently executing on its development and commercialization strategy. "The broad effectiveness of Allon's compounds will allow us to build a strong drug platform to pursue multiple indications with different routes of administration and to commence several Phase II clinical trials in 2006," said McCauley.

Financials

For the three months ended September 30, 2005 the Company reported a net loss of $1,492,248 ($0.05 per share) compared to a loss of $356,098 ($0.04 per share) for the same period in 2004 (Q3 2004) and a loss of $1,261,196 ($0.05 per share) for the previous quarter ended June 30, 2005 (Q2 2005). The increased loss of $1,136,150 over the comparable three months ended Q3 2004 resulted from the acquisition of Allon Therapeutics, Inc. (Allon USA) and subsequent change of business the Company underwent in Q3 2004 from an investment company to a biotechnology company. Q3 2005 losses are reflective of the Company's clinical development program. The increased loss of $231,052 over Q2 2005 is the result of planned increases in both R&D and G&A. R&D increases are largely the result of the commencement of clinical development for the Company's second compound, AL-208. Additional G&A costs were associated with the Company's transition from a Venture issuer to a TSX listed company and successful completion of a $6.3 million private placement.

For the nine month period ended September 30, 2005, the Company reported a loss of $3,957,259 compared to $579,565 for the same period in 2004. The increased loss of $3,377,694 results from the acquisition of Allon USA and subsequent change of business.

On August 29, 2005, the Company completed a $6.3 million dollar private placement of common shares. At September 30, 2005, the Company had cash and short-term investments of $11,175,476, compared to $9,266,403 at December 31, 2004 and $6,339,427 at June 30, 2005. The Company believes this level of cash and short-term investments is sufficient to fund operations and commitments into Q4 2007.

Clinical Development

Allon has two compounds, AL-108 (intranasal administration) and AL-208 (intravenous administration), in clinical trials.

During Q2, the Company successfully completed a Phase Ia human clinical trial evaluating AL-108 as a treatment for Alzheimer's disease. AL-108 was given intranasally to five groups of six healthy adults in a double-blind, placebo-controlled, randomized and ascending dose study to evaluate the safety and pharmacokinetic results. The dosing was well tolerated by all subjects and no meaningful side effects were observed.

In Q3, after discussion with the United States Food and Drug Administration (FDA), the Company opted to conduct additional pre-clinical work with AL-108 before commencing a Phase Ib trial in 2006. The advantage of this work is that it will allow Allon to better understand the pharmacokinetics and pharmacodynamics (how a drug interacts with and moves through the body) of AL-108.

"This information will provide for a superior design for the Phase IIa trial we expect to commence next year," McCauley said. "We expect to complete this additional preclinical work and to commence the Phase Ib trial in the first half of 2006. Thereafter, we plan to complete the Phase Ib trial and commence a Phase IIa trial as a first stage to determining effectiveness in patients in the second half of 2006."

In its AL-208 program, Allon began dosing patients in a Phase I human clinical trial evaluating AL-208 as a treatment for MCI associated with bypass surgery. AL-208 was administered intravenously to six dose groups totalling 48 healthy adults and two additional dose groups totalling 16 healthy elderly adults in a single-dose, double-blind, placebo controlled, randomized, sequential and ascending study to evaluate primarily the safety and pharmacokinetic results.

Subsequent to quarter end, the Company announced that it had completed dosing subjects in this trial and expects to release data in Q1 2006. The Company expects to begin a Phase IIa trial early in 2006 as a first stage to determining effectiveness in patients.

About Allon

Allon Therapeutics Inc. is a development-stage Canadian biotechnology company developing drugs that protect against neurodegenerative conditions such as stroke, traumatic brain injury, Alzheimer's, multiple sclerosis and neuropathy. The Company is listed on the Toronto Stock Exchange under the trading symbol "NPC" (Neuro Protection Company™) and based in Vancouver.


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