Allos Therapeutics, Inc. (NASDAQ: ALTH) today reported its
fourth quarter 2010 financial highlights and announced its 2011 key
business priorities. Members of the Company's senior management
will provide a business update at the 29th Annual J.P. Morgan
Healthcare Conference in San Francisco at 8:00 a.m. Pacific Time on
Wednesday, January 12, 2011.
Recent Developments and Highlights
- Reports $11.8 million in FOLOTYN®
(pralatrexate injection) fourth quarter demand sales, representing
a 27 percent sequential increase over third quarter 2010
- Pursuing regulatory approval of FOLOTYN
for patients with relapsed or refractory peripheral T-cell lymphoma
(PTCL) in Europe following acceptance of the Company’s Marketing
Authorisation Application (MAA) for review by the European
Medicines Agency (EMA) in December 2010
- Prioritizing resources on the
development and commercialization of FOLOTYN for the treatment of
hematologic malignancies
- Maintaining current level of personnel
in sales and marketing to drive growth in sales while reducing
total employees by approximately 13 percent, primarily in research
and development and general and administrative – realizing
approximately $4 million in annual cash savings moving forward
- The Company will not pursue Phase 3
studies for non-small cell lung cancer (NSCLC) at this time
- Pursuing strategic partner for the
potential co-development and commercialization of FOLOTYN outside
the United States
- Reports strong balance sheet with total
cash and investments of $98.6 million and no debt at the end of
2010
“During 2010, we continued to make progress as a commercial
organization with the launch of FOLOTYN for patients with relapsed
or refractory PTCL, and we are encouraged by the sales growth
achieved in the fourth quarter. We believe the market opportunity
for FOLOTYN is substantial, and we are committed to driving brand
awareness and establishing FOLOTYN as the second-line standard of
care for PTCL,” said Paul L. Berns, president and chief executive
officer of Allos Therapeutics, Inc. “Moving forward, we intend to
prioritize our resources on the development and commercialization
of FOLOTYN for the treatment of PTCL, CTCL and other hematologic
malignancies. We are excited that our MAA for FOLOTYN was accepted
for review by the EMA, as we believe Europe represents another
important market opportunity for FOLOTYN. In addition, we are
pursuing a strategic partner for the potential co-development and
commercialization of FOLOTYN outside the United States.”
Financial Highlights for Fourth Quarter 2010 (Preliminary and
Unaudited)
- In January 2010, the Company commenced
the commercial launch of FOLOTYN, the first and only drug approved
in the U.S. for the treatment of patients with relapsed or
refractory PTCL. Allos sells FOLOTYN to pharmaceutical wholesale
distributors who then resell FOLOTYN to patients' health care
providers.
- Gross product sales to health care
providers, or demand sales, were approximately $11.8 million for
the fourth quarter 2010, a 27 percent sequential increase over the
third quarter 2010. Gross product sales to distributors, or factory
sales, were $12.1 million for the fourth quarter 2010, a 25 percent
sequential increase over the third quarter 2010.
- Net product sales, which represents
factory sales less gross to net sales adjustments, are expected to
approximate $11.7 million for the fourth quarter 2010. Net product
sales for the fourth quarter includes a one-time increase of
approximately $1.1 million related to a change in revenue
recognition methodology.
- Prior to the fourth quarter, the
Company recognized revenue on the basis of demand sales. During the
fourth quarter, the Company began recognizing revenue on the basis
of factory sales as the Company established a sufficient history in
order to reasonably estimate returns in accordance with GAAP. The
$1.1 million one-time increase in net product sales represents the
cumulative difference between factory sales and demand sales at the
end of the third quarter, or deferred revenue, less applicable
gross to net sales adjustments.
- Cash, cash equivalents and investments
totaled approximately $98.6 million as of December 31, 2010.
- The Company plans to report its
complete financial results for 2010 in March 2011.
“During the second half of 2010, we implemented a strategic
effort aimed at improving account penetration and optimizing the
duration of treatment for FOLOTYN, in addition to our ongoing
efforts to build brand and disease awareness,” said Mike Schick,
vice president of sales and marketing at Allos Therapeutics. “We
believe these efforts are driving increased awareness of FOLOTYN
among hematologists and oncologists leading to an increase in the
total number of ordering accounts, which contributed to the 27
percent increase over third quarter demand sales. We expect the
permanent J-Code that became effective in January 2011 to further
enhance patient access.”
Financial Guidance
Total operating costs and expenses, excluding cost of sales and
non-cash stock-based compensation expense, are expected to
approximate $95 to $98 million for 2011. Moving forward, the
Company intends to prioritize its resources on the development and
commercialization of FOLOTYN for the treatment of hematologic
malignancies. Therefore, the Company plans to maintain its current
level of personnel in sales and marketing to drive growth in sales
while reducing total employees by approximately 13 percent, or 25
employees, primarily in research and development and general and
administrative. The Company expects to incur a one-time charge of
approximately $0.7 million in 2011 related to this action and
expects to realize approximately $4 million in annual cash savings
moving forward.
“From a financial perspective, we enter 2011 with a strong
balance sheet, with approximately $98.6 million in cash and no
debt,” said David Clark, vice president of finance at Allos
Therapeutics. “We prudently managed our operating costs and
expenses during 2010. Our plans for 2011 reflect the continued
prioritization of our resources to drive our strategic goals for
the development and commercialization of FOLOTYN in hematologic
malignancies.”
Cost of sales for 2011 is expected to approximate 10 percent of
factory sales, which includes the current 8 percent royalty on
FOLOTYN sales. Actual financial results for 2011 will vary based
upon many factors, including the growth of FOLOTYN sales and rate
of patient enrollment in FOLOTYN clinical trials that are ongoing
and planned for initiation in 2011.
2011 Key Business Priorities
- Drive growth in U.S. sales of FOLOTYN
for relapsed or refractory PTCL
- Enrich PTCL patient population through
enhanced brand and disease-state awareness
- Establish FOLOTYN as second-line
standard of care for PTCL
- Ensure patient access
- Increase average duration of patient
therapy
- Pursue regulatory approval to market
FOLOTYN in Europe for relapsed or refractory PTCL
- The Company’s Marketing Authorisation
Application (MAA) was accepted for review by the European Medicines
Agency (EMA) in December 2010
- Secure strategic partner for the
co-development and commercialization of FOLOTYN outside the United
States
- Advance FOLOTYN development program in
hematologic malignancies and pursue new indications
- Obtain FDA agreement and initiate Phase
3 trial of sequential FOLOTYN in previously untreated patients with
PTCL following CHOP or a CHOP-like chemotherapy regimen
- Determine maximum tolerated dose and
obtain FDA agreement for Phase 3 trial of FOLOTYN in combination
with systemic bexarotene in patients with relapsed or refractory
cutaneous T-cell lymphoma (CTCL)
- Optimize investment in solid tumors
through efficient use of funds
- Ongoing collaboration with the NCCN
Oncology Research Program
- Complete ongoing Company-sponsored
studies in bladder and breast cancer
- The Company will not pursue Phase 3
studies for NSCLC at this time
Presentation to be Webcast
Members of the Company's senior management will present at the
29th Annual J.P. Morgan Healthcare Conference. The presentation
will begin at 8:00 a.m. Pacific Time on Wednesday, January 12,
2011. There will be a live webcast of the presentation, which will
be accessible through a link available on the home page and
investor relations section of the Allos website. In addition, the
webcast will be archived for 90 days.
About Peripheral T-Cell Lymphoma
T-cell lymphomas comprise a biologically diverse group of blood
cancers that account for approximately 10% to 15% of all cases of
non-Hodgkin lymphoma (NHL).1-3 The Company estimates the current
annual incidence of PTCL to be approximately 5,900 patients in the
U.S. and approximately 6,000-7,000 patients in the top five
European markets. The outcome of patients with PTCL is poor and the
majority of patients ultimately have refractory disease to a
variety of agents, including multi-agent chemotherapy with CHOP
(cyclophosphamide, doxorubicin, vincristine, and prednisone) or
CHOP-like regimens. The 5-year overall survival rate in these
patients is 25% to 40%, depending on sub-type.4-5
About FOLOTYN
FOLOTYN, a folate analogue metabolic inhibitor, was discovered
by Sloan-Kettering Institute for Cancer Research, SRI International
and Southern Research Institute and developed by Allos
Therapeutics. In September 2009, the FDA granted accelerated
approval for FOLOTYN for use as a single agent for the treatment of
patients with relapsed or refractory PTCL. This indication is based
on overall response rate. Clinical benefit such as improvement in
progression-free survival or overall survival has not been
demonstrated. FOLOTYN has been available to patients in the U.S.
since October 2009.
About Allos Therapeutics
Allos Therapeutics, Inc. (Nasdaq: ALTH) is a biopharmaceutical
company committed to the development and commercialization of
innovative anti-cancer therapeutics. Allos is currently focused on
the development and commercialization of FOLOTYN® (pralatrexate
injection), a folate analogue metabolic inhibitor. FOLOTYN is the
first and only drug approved in the U.S. for the treatment of
patients with relapsed or refractory peripheral T-cell lymphoma.
Allos is also developing FOLOTYN in other hematologic malignancies
and solid tumors. Allos retains exclusive worldwide rights to
FOLOTYN for all indications. Allos is headquartered in Westminster,
CO. For additional information, please visit www.allos.com.
Non-GAAP
Non-GAAP financial information is utilized by Allos' management
to provide a useful measure of operating performance of the
company. Non-GAAP financial information herein includes the 2011
financial guidance related to operating costs and expenses.
Guidance for operating costs and expenses excludes cost of sales,
amortization of intangible asset and non-cash stock based
compensation expense, which is not being provided at this time.
Safe Harbor Statement
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include statements regarding the commercialization of
FOLOTYN for the treatment of patients with relapsed or refractory
PTCL; the Company’s projected operating costs and expenses for
fiscal year 2011; the Company’s intent to enter into a strategic
partnership for the continued development and potential future
commercialization of FOLOTYN outside the United States; and other
statements that are other than statements of historical facts. In
some cases, you can identify forward-looking statements by
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“projects,” “potential,” “continue,” and other similar terminology
or the negative of these terms, but their absence does not mean
that a particular statement is not forward-looking. Such
forward-looking statements are not guarantees of future performance
and are subject to risks and uncertainties that may cause actual
results to differ materially from those anticipated by the
forward-looking statements. Important factors that may cause actual
results to differ materially include, but are not limited to, the
risks and uncertainties associated with the commercialization of
FOLOTYN; the ability to expand the approved indications for
FOLOTYN; the status of reimbursement from third party payers; the
Company’s dependence on third party manufacturers; the Company’s
compliance with applicable regulatory requirements, including the
healthcare fraud and abuse laws and the Company’s post-marketing
requirements; that the design of and data collected from the PROPEL
trial may not be adequate to demonstrate the safety and efficacy of
FOLOTYN for the treatment of patients with relapsed or refractory
PTCL, or otherwise be sufficient to support EMA approval; that the
Company may lack the financial resources and access to capital to
support its future operations, including its product development
and commercialization plans for FOLOTYN and that the Company may be
unable to negotiate a strategic partnership for the continued
development and potential future commercialization of FOLOTYN
outside the United States on acceptable terms, or at all.
Additional information concerning these and other factors that may
cause actual results to differ materially from those anticipated in
the forward-looking statements is contained in the "Risk Factors"
section of the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2010, and in the Company's other
periodic reports and filings with the Securities and Exchange
Commission. The Company cautions investors not to place undue
reliance on the forward-looking statements contained in this press
release. All forward-looking statements are based on information
currently available to the Company on the date hereof, and the
Company undertakes no obligation to revise or update these
forward-looking statements to reflect events or circumstances after
the date of this presentation, except as required by law.
Note: The Allos logo and FOLOTYN name are registered trademarks
of Allos Therapeutics, Inc.
References:
- The Non-Hodgkin's Lymphoma
Classification Project. A clinical evaluation of the International
Lymphoma Study Group classification of non-Hodgkin's lymphoma.
Blood. 1997;89(11):3909-3908.
- Hennessy BT, Hanrahan EO, Daly PA.
Non-Hodgkin lymphoma: an update [review]. Lancet Oncol.
2004;5(6):341-353.
- O'Leary HM, Savage KJ. Novel therapies
in peripheral T-cell lymphomas [review]. Curr Oncol Rep.
2008;134(5):202-207.
- Savage KJ, Chhanabhai M, Gascoyne RD,
et al. Characterization of peripheral T-cell lymphomas in a single
North American institution by the WHO classification. Ann Oncol
2004;15(10):1467-75.
- Savage KJ. Peripheral T-cell Lymphomas.
Blood Rev. 2007; 21:201-216.
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