Market Jitters Affect Allos

Usually the endorsement of an FDA advisory panel for approval of your product is greeted with praise from analysts and an uplift in share price. Unfortunately for Allos Therapeutics (ALTH), their 10-4 positive recommendation for pralatrexate, now known as Folotyn, for the hard-to-treat blood cancer, peripheral T-cell lymphoma (PTCL), saw their shares fall 5% Thursday in the wake of the panel’s decision.

What appears to have got analysts a little anxious and not celebrating is the vigorous debate over whether or not patients suffering from PTCL got any lasting clinical benefit from treatment with Folotyn. The doubts expressed by some of the panel members had the knock-on effect to cause some analysts to question whether the drug would ultimately get approval at its September 24 PDUFA date.

Questions

The data that Allos put before the panel showed that 27% of patients taking Folotyn responded to the drug, with a median response rate of 9.4 months. Due to the particularly aggressive nature of PTCL, it was agreed that this would be the primary endpoint of the study, rather than the usual oncology measures of overall survival and progression free survival.

It was this relatively small number of patients who demonstrated a prolonged benefit from the drug that caused one panel member to argue that the drug was no better than previous experimental treatments for the disorder. The panel also highlighted the fact that more than 50% of patients only responded to the drug for 14 weeks or less, another factor that caused some analysts to doubt the drug’s eventual approval.

All or nothing

As pretty much Allos’ only product and one that the company is determined to market in the US itself, it is not surprising that any doubts about approval would affect their shares. Folotyn is forecast to have sales of $360m by 2014 and is the catalyst to make the company profitable by 2011.

It has also been the driving force behind takeover rumours surrounding Allos, given the paucity of unpartnered late-stage oncology products and big pharma’s well know hunger for such assets. Both bid speculation and the market’s expectation of a positive outcome at the advisory committee and eventual approval later this month had driven shares in Allos up by 26% since the beginning of the year (Event - Allos heading into crucial September, August 21, 2009).

Accentuate the positive

But what investors should keep in mind and something that Allos highlighted to the panel, is that many of the patients in the trial had very advanced forms of the cancer and some had received up to 13 different therapies before trying Folotyn.

More importantly, of those who did respond, some were able to receive bone marrow transplants to eventually cure them of the disease, something that could play well with the regulator. Also, with no approved product for PTCL, the fact that the drug does have benefit means that the FDA might be more willing to offer a treatment option for this group of patients who only have a 10% chance of being alive 12 months after diagnosis, a survival rate that is raised to 57% for responders to Folotyn.

Friday it looked as if this message was slowly getting through with Allos shares up 4% to $7.82, almost back to the level they were when the results of the panel were revealed. If, as some of the bulls in the market are expecting, the drug does get approval on the 24th, then shareholders who have hung on during this period of instability could be rewarded further.

Comments

[PPACK:]

Do the analysts fail to realize that this subset of Relapsed PTCL involved had Progessive Disease after other treatments, so 27% CR RR, 39% Investigator RR, and 9.5 median duration of reponse among this non-reponsive subset is pretty darn good.

Sep 23 05:25 PM

[MARGARET TO...:]

HOPING SOME BIG DRUG MANUFACTURE TAKES THIS DRUG AND MANUFACTURERS IT I CERTAINLY WOULD TAKE IT IF I WERE IN THE SHAPE THESE POOR PEOPLE ARE IN THE TRILLS ANY CHANCE TO LIVE IS BETTER THAN NON.

Sep 27 02:58 PM