Allon Therapeutics releases Q2 operating results and provides corporate update
VANCOUVER, Aug. 7, 2012 /PRNewswire/ – Allon Therapeutics Inc. (TSX: NPC) today announced its unaudited operating results for the
three and six-month periods ended June 30, 2012. Allon also said that
its successful $10 million equity financing completed during the second
quarter and ongoing progress in its pivotal clinical trial have kept
the Company on track to achieve its objective of securing marketing
approval for its lead neuroprotective drug candidate davunetide as a
treatment for progressive supranuclear palsy (PSP), a rapidly
progressing and fatal degenerative brain disease.
Gordon McCauley, President and CEO of Allon Therapeutics, said the
quarter’s progress ensures that the Company has the resources needed to
complete the trial, analyze the data and to advance davunetide towards
commercialization. “Our shareholders and employees stand with thousands
of patients, caregivers, families, and health professionals in search
of a treatment for PSP, a debilitating and fatal neurodegenerative
disease with no approved treatments,” McCauley said, “and from a
commercial perspective we believe this market is in excess of $700
million in the U.S. and Europe.”
Allon shareholders voted at the Company’s annual general meeting June 13
to approve the terms of the $10 million brokered private placement
equity offering previously announced by the Company May 2. The approval
triggered the conversion of subscription receipts sold as part of the
financing making the full $10 million raised available to the Company
for development of davunetide.
The fully enrolled pivotal trial is proceeding under a Special Protocol
Assessment with the U.S. Food and Drug Administration. The trial is
expected to complete patient dosing and release top-line data in Q4
2012. The trial is based upon statistically significant human efficacy
demonstrated in patients with amnestic mild cognitive impairment,
cognitive impairment associated with schizophrenia, and positive
DSMB approves trial protocol
Another important event for the Company during the Second Quarter was
the final review of the pivotal trial by the independent Data Safety
Monitoring Board (DSMB).
The DSMB completed its fourth review and unanimously recommended
continuing the trial without any change or modification to the
protocol. 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. While the Company,
investigators, patients and others are blinded as to whether a patient
is given drug or placebo, the DSMB is independent of the company and
the clinical investigators, and reviewing unblinded data.
Data shows davunetide impacts cell life
The Company presented preclinical data May 12 at the 12th International
Stockholm/Springfield Symposium on Advances in Alzheimer Therapy
showing that davunetide acted to prevent the death of brain cells of
animals in controlled studies. This research was also recently
published in the International Journal of Alzheimer’s Disease.
The article, “Tau and Caspase 3 as Targets for Neuroprotection”, was
authored by Professor Illana Gozes, scientific founder of Allon. The
manuscript and presentation describe the neuroprotective effect of davunetide at preventing apoptosis, or cell death, in
different cellular pathways associated with neurodegenerative diseases
like Alzheimer’s and PSP.
PSP is considered a tauopathy, involving the tau protein in brain cells.
Allon has previously demonstrated, in both preclinical and clinical
studies, that davunetide has an impact on the tau pathology. The
current evaluation of davunetide in a pivotal clinical trial as a
potential treatment for PSP makes it the most advanced tau therapy in
the world. The Company believes that success in treating PSP with
davunetide would define the opportunity to evaluate davunetide in other
tau-related diseases, such as Alzheimer’s, subtypes of frontotemporal
dementia, as well as other neurodegenerative diseases like
schizophrenia and Parkinson’s.
Trial data presented to Alzheimer’s conference
In a subsequent event, Allon announced July 16 that data presented at
the Alzheimer’s Association International Conference (AAIC) in
Vancouver confirm the integrity of patient enrollment and the
importance of cognitive impairment in the pivotal clinical trial. The
data describe the baseline demographics of subjects enrolled in the
pivotal trial as well as baseline cognitive data.
Dr. Michael Gold, Allon’s Chief Medical Officer and Vice-President of
Clinical Development, said, “These data confirm that Allon enrolled
exactly the kind of patients we set out to enroll in our clinical
trial. In addition, as perhaps the largest data-set of
well-characterized PSP patients ever assembled, this information yields
novel insights into the extent and nature of cognitive impairment in
Results of operations
Allon reported a net loss of $3,243,214 ($0.03 per share) for the three
months ended June 30, 2012, compared to a net loss of $2,919,833 ($0.04
per share) for the three months ended June 30, 2011, representing an
increase in net loss of $323,381. For the six months ended June 30,
2012, the Company reported a net loss of $6,021,918 ($0.06 per share),
compared to a net loss of $5,893,909 ($0.08 per share) for the six
months ended June 30, 2011. This increase in net loss is explained in
the following description of significant variances from the comparable
periods in 2011.
For the three and six months ended June 30, 2012, research and
development expenses were $2,254,941 and $4,395,471 compared to
$2,199,221 and $4,213,017 for the three and six months ended June 30,
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 for the
three and six months ended June 30, 2012 also included amortization and
depreciation expenses of $127,453 and $254,824 (2011 – $127,813 and
$255,352) and share-based compensation of $17,013 and $38,584 (2011 -
$15,429 and $24,187).
For the three and six months ended June 30, 2012, general and
administrative expenses were $819,281 and $1,455,430 compared to
$688,099 and $1,538,984 for the three and six months ended June 30,
2011. General and administrative expenses for the three and six months
ended June 30, 2012 were comparable to the same periods in 2011 with
lower expenses associated with corporate development activities partly
offset by higher compensation expenses in the second quarter of 2012.
Included in general and administrative expenses for the three and six
months ended June 30, 2012 were share-based compensation of $72,489 and
$153,503 (2011 – $49,468 and $95,201) and amortization and depreciation
expenses of $2,130 and $5,004 (2011 – $3,284 and $7,080).
The Company’s other income and expenses are comprised of loss on debt
repayment, interest income/expense and foreign exchange gains/losses.
During the second quarter of 2012, the Company completed a brokered
private placement equity offering of $10.0 million. Concurrent with
this equity offering, the Company repaid the $2.5 million convertible
loan it entered into in March 2012 with Neuro Discovery II Limited
Partnership. Upon repayment of the loan, the Company recognized a loss
of $110,055 representing the unamortized discount on the loan.
During the three and six months ended June 30, 2012, the Company
incurred interest expense of $31,595 and $57,339 in relation to the
convertible loan entered into on March 7, 2012. The Company earned
interest revenue of $1,479 and $1,521 during the three and six months
ended June 30, 2012 compared to $1,489 and $6,390 for the same period
in 2011. Reduced interest earnings resulted from lower average cash
balances during the three and six months ended June 30, 2012 compared
to the same period in 2011.
Foreign exchange loss was $28,821 and $5,144 for the three and six
months ended June 30, 2012. This compared to a loss of $34,002 and
$148,298 for the same periods 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 loss for 2012 resulted from the
impact of the U.S. dollar’s appreciation 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,
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, 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 on track to
complete the study, analyse the data and release top-line results
before the end of 2012. This pivotal trial is based upon statistically
significant human efficacy demonstrated in patients with amnestic mild
cognitive impairment, cognitive impairment associated with
schizophrenia, and in positive biomarker data.
The Company is listed on the Toronto Stock Exchange under the trading
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.
SOURCE Allon Therapeutics Inc.