Gordon McCauley, Allon's President and CEO, said the Company's most significant achievement in 2011 was the completion of enrollment in the pivotal clinical trial to evaluate its lead drug candidate, davunetide, as a treatment for progressive supranuclear palsy (PSP), a rapidly progressing and fatal degenerative brain disease. Enrollment of the trial's objective of 300 patients was completed on schedule in the fourth quarter of 2011.
"Patient treatment is continuing at leading medical institutions in the United States, Canada, Europe and Australia and we are on track to complete treatment, analyze data and release top-line results by late 2012," McCauley said. "We're running this trial with a Special Protocol Assessment (SPA) from the U.S. Food and Drug Administration (FDA) meaning that the data from this study, if positive, may be used as part of a marketing approval."
"Accordingly, we continue to ensure that the Company maintains financial flexibility as it advances davunetide towards commercialization beginning with the completion of the ongoing pivotal trial in PSP and the initiation of the regulatory process for marketing approval of davunetide if the trial results warrant," McCauley said.
McCauley said the Company's announcement March 9 of a $2.5 million bridge loan from Allon's largest shareholder Neuro Discovery II Limited Partnership (NDI) strengthens its financial flexibility. "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."
Davunetide is the most advanced tau therapy in the world and PSP is considered a tauopathy, involving impairment of the tau protein in brain cells. An article in the February edition of Neuropsychiatric Disease and Treatment reviews the strong scientific and clinical rationale for the potential efficacy of davunetide in PSP. The rationale includes the demonstration of activity in preclinical models of tauopathies and clinical efficacy in amnestic mild cognitive impairment (aMCI), an early form of Alzheimer's disease known to be associated with the build-up of tau tangles.
McCauley also said Allon is continuing in 2012 with a second set of studies funded by the Michael J. Fox Foundation (MJFF) for Parkinson's Research to conduct preclinical research that will help determine the potential of davunetide as a treatment for Parkinson's disease.
The first grant, received in 2007, generated research that found intranasal davunetide treatment significantly improved motor function and brain pathology in a mouse model which replicates certain characteristics of Parkinson's. A second grant of $625,000 received in 2010 led to a round of preclinical studies that was recently reviewed by MJFF scientists and an expert panel of scientific reviewers to help strengthen the study design of the second phase of the project.
Other 2011 achievements
Other achievements during 2011 included:
- A public equity offering that raised a total of $5.44 million.
- Receipt of patents, three from the U.S. and one Japan, strengthening Allon's intellectual property estate which now includes 15 patent families, 61 issued patents and more than 30 pending applications worldwide. The U.S. patents cover the composition of matter for the D-isomer of NAP (davunetide), an early-stage product candidate known as AL-408 in the Company's pipeline; the use and mode of delivery of davunetide, its parent protein ADNP and other derivatives of ADNP in mental diseases and disorders including schizophrenia; and the treatment of fetal alcohol syndrome, developed as a result of in-utero exposure to alcohol, with davunetide or derivatives and combinations of all other compounds in the Company's neuroprotection drug platform. The Japanese patent covers the composition of matter of davunetide and other peptides in its neuroprotection drug platform.
- Announcement of results of analysis of magnetic resonance imaging (MRI) data from an earlier Phase 2 clinical trial indicating that 12 weeks of treatment with davunetide appears to prevent cortical thinning of important parts of the brains of schizophrenia patients compared to placebo.
- Receipt of the Gold Leaf Award as the Early Stage Company of the Year (Health) from BIOTECanada, Canada's national biotechnology industry organization. The award was presented at the BIO 2011 International Convention in Washington, D.C.
- The appointment of Michael Aldridge as a Director of the Company. Aldridge currently serves as Executive Director and a Director of biopharmaceutical company Xenome Limited. Aldridge replaced Michael O'Brian who retired from the Board of Directors after serving since 2004.
- Presentation at two sessions of the 10th International Conference on Alzheimer's and Parkinson's Disease in Barcelona, Spain, of clinical and research data on the impact of davunetide on Parkinson's disease and other neurodegenerative conditions.
- Presentation at the American Society for Clinical Pharmacology and Therapeutics annual meeting in Dallas, Texas, of clinical trial results confirming the positive pharmacokinetic characteristics of davunetide. The data demonstrate that intranasal administration of davunetide yields the pharmacokinetic characteristics and brain concentrations apparently necessary to show clinical efficacy.
- The appointment of Michael Gold, M.S., M.D. as Vice President, Clinical Development and Chief Medical Officer. Gold joined Allon directly from GlaxoSmithKline Inc. (GSK) where he most recently served as Vice-President, Neuroscience Medicines. At GSK, Dr. Gold was responsible for clinical development of late-stage neurology compounds for the global pharmaceutical company.
- Announcement that a research project funded by the MJFF for Parkinson's Research found that intranasal davunetide treatment significantly improved motor function and brain pathology in a mouse model which replicates certain characteristics of Parkinson's disease. Treatment with davunetide caused a 38% improvement in motor performance and coordination relative to controls.
Achievements to date in 2012 include:
- The announcement March 9 that the Company had arranged bridge financing to strengthen its financial resources as it advances davunetide towards commercialization beginning with the completion of the ongoing pivotal trial and the initiation of the regulatory process for marketing approval of davunetide if the trial results warrant.
- An Australian patent covering the use of Allon's drug candidates, including davunetide and pipeline product AL-309, to treat certain types of peripheral neurotoxicity.
- Publication in the February edition of Neuropsychiatric Disease and Treatment of a review of davunetide as a potential treatment of PSP. In the article, some of the leading experts in PSP describe davunetide as the most advanced drug candidate in the world for PSP patients. The six authors include four members of Allon's research and clinical team.
- Allon's Data Safety Monitoring Board completed its third review and unanimously recommended continuing the pivotal clinical trial in PSP without any change or modification to the protocol.
Results of operations
Allon reported a net loss of $12,774,995 ($0.15 per share) for the year ended December 31, 2011, compared to a net loss of $16,084,481 ($0.21 per share) for the year ended December 31, 2010, representing a decrease in net loss of $3,309,486.
For the year ended December 31, 2011, research and development (R&D) expenses were $9,684,836 compared to $12,611,693 for the year ended December 31, 2010. R&D expenses were higher in 2010 compared to 2011 due to start-up costs related to the Company's PSP clinical trial in the fourth quarter of 2010, including significant costs associated with drug supplies. R&D expenses also included amortization and depreciation expenses of $510,301 (2010 - $513,615) and share-based compensation of $56,677 (2010 - $26,165 credit).
For the year ended December 31, 2011, general and administrative expenses were $2,896,743 compared to $3,780,406 for the year ended December 31, 2010. Decline in general and administrative expenses in 2011 as compared to 2010 was primarily due to lower expenses associated with corporate development activities. Included in general and administrative expenses were amortization and depreciation expenses of $13,959 (2010 - $19,102) and share-based compensation of $197,169 (2010 - $226,486).
The Company's other income and expenses are primarily comprised of interest income and foreign exchange gains/losses. The Company earned interest revenue of $6,662 during 2011 compared to $23,750 for the same period in 2010. Reduced interest earnings resulted from lower average cash balances and lower interest rates during 2011 compared to 2010.
Foreign exchange loss was $200,078 for 2011. This compared to a gain of $246,235 for 2010. 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 in 2011 resulted from the impact of the strengthening of the U.S. dollar against the Canadian dollar on the Company's U.S. dollar denominated accounts payable. This compared to 2010 when the U.S. dollar weakened, resulting in a foreign exchange gain.
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 symbol "NPC".
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.
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