The company's vaccine technology uses a patented optimisation technology that could potentially act as both a preventative and therapeutic vaccine for HSV-2 genital herpes.
The vaccine is being developed by Professor Ian Frazer's Coridon group in which Allied has 46.8% interest.
HSV-2 genital herpes affects up to 1 in 6 Americans and currently has no curative treatment.
"This clinical trial approval represents a further significant milestone in Allied's commercialisation of next generation vaccines that are designed to have the power to both prevent and treat infectious diseases and cancers," chief executive officer Lee Rodne said.
"We are delighted to be working with Professor Frazer and his team on taking this vaccine forward. The clinical trial will also prove the value of this technology in humans for use in a wide range of vaccines."
The Phase I study will vaccinate twenty healthy volunteers via intradermal injection into the forearms with a goal to examine the safety of the vaccine, as well as detect if an antibody and T-cell response can be generated by people.
Along with safety data, the results will indicate if the vaccine can stimulate an antibody (protective) response as well as T-cell response (therapeutic). The importance of the T-cell response is it indicates the potential for the vaccine to be used as a treatment against herpes.
"This is the beginning of an exciting period for our herpes vaccine. We have seen very encouraging results from animal studies and we expect pivotal data showing that our vaccine, which incorporates our patented optimisation technology, to produce similar immune responses in the clinic," said Professor Frazer.
The outcomes of the Phase I trial will demonstrate the vaccine's safety and how well tolerated it is, as well as determining the effective dose and showing that the vaccine generates a robust immune response.
HSV-2 genital herpes
Genital herpes affects more than 1 in 6 Americans between ages 14 and 49 according to the Centers for Disease Control in the U.S.
WHO estimates the number of people aged 15-49 years who are living with HSV-2 worldwide exceeds half a billion.
Most individuals infected with HSV-2 experience either no symptoms or have very mild symptoms that go unnoticed or are mistaken for another skin condition and as a result are often unaware of their infection until an outbreak occurs.
The high infection rates make for a large market, which is estimated to be worth up to $6 billion.
The approval to start clinical trials is key to confirming the efficacy of Allied Healthcare's HSV-2 genital herpes, which has returned encouraging results from animal studies.
Doing so opens up a massive market for the company that has not previously being tapped, considering that no curative treatment currently exists for the infection.
Prof Frazer has already developed next generation DNA vaccines. His groundbreaking research led to Merck & Co.'s highly successful cervical cancer vaccine, Gardasil® and Cervarix, marketed by GlaxoSmithKline.
Current HSV treatment involves the use of antiviral drugs which can reduce, but not eliminate, outbreaks and shedding and therefore does not prevent spread of the disease.
Coridon's herpes vaccine program has shown very positive animal data in clearing the virus, with longer term follow up data showing continued persistence of the immune response.
Results of the trial are due approximately in 1QCY14.
Based on success to date, an effective vaccine for herpes looks to be within grasp, providing a grand prize for Allied Healthcare in potential revenue.
AHZ is in a sound financial position with over A$3m in cash, after a placement and share purchase plan was successfully completed earlier this year.
We believe there is significant upside left in the Allied share price. Our target based on our estimate of valuation is $0.07.
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