VANCOUVER, March 9, 2012 /CNW/ - Allon Therapeutics Inc. (TSX: NPC) announced today it has secured a bridge financing to
strengthen the Company's financial resources as it continues on
schedule with its pivotal clinical trial investigating lead
neuroprotective drug candidate davunetide as a potential treatment for progressive supranuclear palsy (PSP), a rapidly progressing and fatal degenerative brain disease.
Gordon McCauley, Allon's President and CEO, said the bridge financing facility is a
$2.5 million loan from major shareholder Neuro Discovery II Limited
Partnership (NDI) to ensure that the Company maintains financial
flexibility as it continues to advance davunetide towards commercialization. Allon successfully completed patient
enrollment of its pivotal trial on schedule in the fourth quarter of
2011 and expects to complete patient treatment, analyze data and
release top-line data by late 2012.
"It is significant that NDI has provided this bridge loan facility",
McCauley said, "and has thereby shown its confidence that the trial
results will determine that davunetide should be commercialized as a treatment for a terrible brain disease.
There are currently no approved therapies for PSP and the market
potential in the U.S. and European Union exceeds $700 million a year."
Under the terms of the one-year 12% interest bearing bridge loan, NDI
has the right to convert the loan at any time for common shares at a
discount to the prevailing five day volume weighted average price,
$0.20 for a maximum of 12.5 million shares. No more than 10,055,666
shares may be acquired without prior Allon shareholders' approval which
will be sought at the June 2012 annual shareholders' meeting. If the
required shareholders' approval is not received, the balance of the
loan will be due in cash. In the event of conversion of the entire
loan, NDI together with its affiliates would own or control a maximum
of 38% of Allon's issued shares. Completion of the loan is subject to
Toronto Stock Exchange conditional approval as of the date hereof.
In addition, the loan amount may convert in full or in part and
participate in any Allon equity financing prior to the maturity date on
the same terms as third parties, subject to the Company obtaining the
necessary TSX approval.
This bridge loan facility follows the Company's December 2011 equity
financing that raised gross proceeds of $5.4 million.
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, in 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 is expected
to complete patient dosing and release top-line data by late 2012. This
pivotal trial is based upon statistically significant human efficacy
demonstrated in patients with amnestic mild cognitive impairment (a
precursor to Alzheimer's disease), 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.
For further information:
Allon Therapeutics Inc.
Director, Investor Relations