Allon Therapeutics Inc.

Allon Therapeutics Inc.

May 14, 2009 17:00 ET

Allon Therapeutics Releases First Quarter Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 14, 2009) - Allon Therapeutics Inc. (TSX:NPC) reported today in its First Quarter 2009 operating results that the Company is on track to achieve its 2009 milestones, including completing a partnership with a major pharmaceutical company and advancing the clinical development of lead neuroprotective product candidate davunetide intranasal (AL-108) with three Phase II human clinical trials.

Highlights of the First Quarter included:

- Announcement at an international Alzheimer's conference in Prague, Czech Republic, of new preclinical data confirming the potential of the Company's lead neuroprotective drug candidate davunetide intranasal (AL-108) as a treatment for frontotemporal dementia (FTD). The new preclinical data demonstrates that davunetide intranasal (AL-108) reduces the "tangle" pathology in brain cells and improves cognitive performance in mice bred to replicate two human mutations of the tau gene, both of which are found in the genetic forms of FTD.

- Issuance of a United States patent strengthening the intellectual property underlying the Company's activity-dependent neurotrophic factor (ADNF) technology platform. The patent covers the chemical composition of two component peptides and covering their use in drugs to protect brain cells from degenerative diseases.

Gordon McCauley, President and CEO of Allon, said, "Our focus during the First Quarter was advancing our partnership negotiations and our Phase II clinical trial preparations. However, the new preclinical data for davunetide intranasal (AL-108) and the U.S. patent issued for our ADNF platform added considerable value to our technology pipeline."

Also during the First Quarter:

- McCauley presented the Company's progress on its 2009 corporate and clinical milestones at the 29th Annual Cowen and Company Health Care Conference in Boston and at the 11th annual BIO CEO and Investor Conference in New York City.

- The Company's investor relations program was ranked by IR Magazine's survey of Canadian investors and analysts as the Best Overall Investor Relations Program for small-cap Canadian companies. The award was accepted by Aaron Keay, Allon's director of investor relations, at an awards banquet in Toronto.

Future event

Gordon McCauley, President and CEO, will outline Allon's progress on its 2009 clinical and corporate milestones at 9:20am EST May 19, 2009 to the Bio International Convention in Atlanta, GA. The three-day convention is attended by biotech executives and investors from around the world and includes two former United States' presidents as keynote speakers.

Results of Operations

Allon reported a net loss of $2,009,589 ($0.03 per share) for the three months ended March 31, 2009, compared to a net loss of $4,349,737 ($0.07 per share) for the three months ended March 31, 2008, representing a decrease in net loss of $2,340,148.

For the three months ended March 31, 2009, research and development expenses were $1,198,936 compared to $3,764,608 for the three months ended March 31, 2008. The decline in research and development expenses resulted from a decrease in clinical trial activity. During the first quarter of 2008, the Company had three ongoing Phase II clinical programs, two of which were completed in the first and third quarters of 2008 respectively.

For the three months ended March 31, 2009, general and administrative expenses were $750,685 compared to $696,052 for the three months ended March 31, 2008. The increase of $54,633 compared to 2008 resulted from higher expenditures on business development and the addition of personnel, partly offset by reduced expenditures on investor relations activity.

Amortization expense for the three months ended March 31, 2009 was $136,612 compared to $138,489 for the three months ended March 31, 2008. Allon amortizes tangible assets and intellectual property on a straight-line basis. The small decline compared to the previous year was primarily the result of certain assets being amortized.

For the three months ended March 31, 2009, the Company recognized other income of $76,644 compared to $249,412 for the three months ended March 31, 2008. The decrease of $172,768 was primarily due to decreased foreign exchange gain on translation of U.S. dollar balances to Canadian dollars and decreased interest earned on cash reserves.

At March 31, 2009 the Company had cash and cash equivalents of $16,041,586 compared to $19,093,499 of cash and cash equivalents at December 31, 2008. The company's cash equivalents are held in high-grade, liquid commercial paper, government bonds and other low risk investments which are recorded at fair value.

About Allon's neuroprotective platforms

Allon's two neuroprotective technology platforms are based on 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). Because the two platforms are based on different proteins, the drugs from each are different molecules 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) are focused on Alzheimer's disease, frontotemporal dementias, and cognitive impairment.

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. Allon's drug davunetide intranasal (AL-108) has 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:

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 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