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Mundipharma to Co-Develop

Allos Inks Ex-U.S. Folotyn Deal; $50M Up Front for PTCL Drug


By Jennifer Boggs

Assistant Managing Editor

Allos Therapeutics Inc. picked up $50 million in up-front cash in a much-anticipated ex-U.S. deal for peripheral T-cell lymphoma (PTCL) drug Folotyn (pralatrexate) and hopes the co-development and commercialization muscle of Mundipharma International Corp. Ltd. will help Folotyn capture a large portion of second-line PTCL market outside the U.S., estimated at about $400 million.

The news came after the close of market Tuesday, as Allos reported first-quarter sales of $10.9 million, marking a 47 percent jump from the same period last year and a sales figure that falls more in line with analyst expectations. Despite being the first drug approved for relapsed or refractory PTCL, sales started off slower than expected following the January 2010 launch. That, plus fast-following competitor, Istodax (romidepspin, Celgene Corp.) moving closer to approval in PTCL had left some industry observers doubtful that Folotyn would reach its potential.

But Allos retooled its commercial approach to improve market penetration. On the earnings call, Michael Schick, vice president of sales and marketing, said the firm has worked to educate physicians to help optimize PTCL diagnosis, while driving home the solid response rates demonstrated in the pivotal PROPEL trial.

The PTCL market represents a "significant" opportunity in the U.S., Schick told investors. He added that internal research had indicated a roughly $400 million market in the U.S. alone, with about 10,000 patients living with refractory PTCL. And that number is expected to increase as the elderly population grows.

Allos is projecting full-year 2011 sales of Folotyn to be between $48 million to $55 million, and "we expect to meet this guideline, with the potential to exceed [it]," Schick said.

The addition of partner Mundipharma, of Cambridge, UK, should offer a substantial sales boost. Allos, which filed a marketing authorization application late last year, is anticipating European approval in early 2012.

Mundipharma already has a hematological sales force to sell bendamustine, sold in the U.S. as Treanda by Frazer, Pa.-based Cephalon Inc., and has successfully navigated bendamustine through regulatory submissions for non-Hodgkin's lymphoma, chronic lymphocytic leukemia and multiple myeloma. Allos execs called the privately held big pharma firm an "ideal" partner.

Under the terms, Allos also is entitled to up to $310.5 million tied to regulatory, commercial and sales milestones, plus tiered, double-digit royalties in Mundipharma territories. The companies jointly will fund further development costs, which likely will include planned Phase III studies of the folate analogue metabolic inhibitor in previously undiagnosed PTCL patients and in combination with bexarotene in relapsed or refractory cutaneous T-cell lymphoma (CTCL).

Development costs will be shouldered initially on a 60:40 basis, but that arrangement could become 50:50 if certain pre-defined milestones are achieved. Allos said one of those milestones is the approval of Folotyn in Europe.

Over the next year, President and CEO Paul Berns said Westminster, Colo.-based Allos will focus on driving U.S. sales of Folotyn, pursuing approval in Europe and gearing up for future label expansion in areas such as CTCL and solid tumors.

Allos, which reported a net loss of $15.2 million, or 14 cents per share, ended the first quarter with about $79.4 million in cash.

Shares of Allos (NASDAQ:ALTH) closed Tuesday at $2.85, down 2 cents.


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