Allos Therapeutics reports net loss of $20.5 million for first-quarter 2010

Allos Therapeutics, Inc. (Nasdaq: ALTH) today reported financial results for the first quarter ended March 31, 2010.

“We are pleased with the first quarter of our U.S. commercial launch of FOLOTYN for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma”

First Quarter Financial Highlights:

• In January 2010, Allos commenced the commercial launch of FOLOTYN^® (pralatrexate injection) in the United States for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma.
• Non-GAAP gross product sales, or sales to pharmaceutical wholesale distributors, were $8.7 million for the first quarter of 2010. Allos sells FOLOTYN to distributors who then resell FOLOTYN to patients' health care providers.
• GAAP gross product sales, or sell-through sales from distributors to health care providers, were $8.2 million for the first quarter of 2010. Given the limited sales history for FOLOTYN, Allos currently cannot reliably estimate expected returns at the time of shipment to its distributors. Therefore, in accordance with GAAP, Allos defers revenue recognition of sales to distributors until the product is sold through its distributors to health care providers. As such, Allos' deferred revenue increased by $0.5 million during the first quarter of 2010, which represents the difference between non-GAAP gross product sales and GAAP sell-through sales for the first quarter 2010. As of March 31, 2010, Allos has recorded total deferred revenue of $1.2 million.
• GAAP net product sales were $7.4 million for the first quarter of 2010, which represents the $8.2 million of sell-through sales net of $0.8 million of gross to net sales adjustments. Gross to net sales adjustments consist of distributor service fees and estimated accruals for government rebates and chargebacks.

"We are pleased with the first quarter of our U.S. commercial launch of FOLOTYN for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma," said Paul L. Berns, president and chief executive officer of Allos Therapeutics. "During the quarter, we made significant progress implementing our FOLOTYN brand campaign, and we are encouraged by the level of awareness and use of FOLOTYN this early in the commercial launch. For the remainder of 2010, we will continue to focus on driving growth in U.S. sales of FOLOTYN for relapsed or refractory PTCL, as well as exploring the potential utility of FOLOTYN in additional indications."

For the quarter ended March 31, 2010, Allos reported a net loss of $20.5 million, or $0.20 per share. Total operating costs and expenses for the first quarter of 2010 were $28.0 million, including stock-based compensation expense of $2.9 million. Cost of sales for the first quarter of 2010 were $0.7 million and consisted of royalties under Allos' license agreement for FOLOTYN and costs for warehousing and shipping. Research and development expenses for the first quarter 2010 were $9.3 million. Selling, general and administrative expenses for the first quarter 2010 were $17.9 million.

Net cash used in operating activities for the first quarter 2010 was $23.3 million. As of March 31, 2010, Allos' cash, cash equivalents and investments totaled $137.5 million.

Non-GAAP financial information is utilized by Allos' management to provide a useful measure of operating performance of the company. Non-GAAP financial information herein includes the effect of deferred revenue related to gross product sales. Reconciliation between the non-GAAP and the GAAP financial measures is included in the narrative above.

Financial Guidance for 2010

Allos reaffirms prior financial guidance that total operating costs and expenses for 2010 are expected to approximate $120 to $130 million, excluding non-cash stock-based compensation expense. Stock-based compensation expense is expected to approximate $13 to $15 million.

Actual financial results for 2010 will vary based upon many factors, including the growth of FOLOTYN sales and rate of patient enrollment in FOLOTYN clinical trials that are ongoing and planned for initiation in 2010.

Clinical Development Update:

• Allos is updating its timeline for reporting top line results from the Company's randomized Phase 2b non-small cell lung cancer trial of FOLOTYN. Allos now expects to report top line results from this investigational Phase 2b trial in the third quarter of 2010. The objective of the trial is to assess the treatment effect of FOLOTYN in certain pre-defined cohorts of patients with advanced NSCLC where FOLOTYN may have the potential to provide clinical benefit relative to erlotinib. The outcome of this study is intended to inform the design of a potential Phase 3 registration trial.
• Allos recently initiated a Phase 2 open label, multi-center, international trial of FOLOTYN in female patients with advanced or metastatic breast cancer who have failed prior chemotherapy. The primary endpoint is objective response. The study will seek to enroll approximately 30 patients.