Allos Therapeutics said U.S. health regulators granted accelerated approval for its drug Folotyn to treat one of the most deadly and aggressive types of white blood cell cancers, sending its shares up 6 percent.
I think it is the best case scenario for Allos as it (approval) was on time, they got a broad label and the efficacy data reflected what the company had previously reported, RBC Capital Markets analyst Jason Kantor said.
The approval comes after an advisory panel to the Food and Drug Administration said earlier this month that the company's clinical data were strong enough to show patients with relapsed or refractory peripheral T-cell lymphoma (PTCL) were likely to benefit from the drug.
PTCL is a less common type of non-Hodgkin's lymphoma, but it can be more aggressive than its B-cell counterpart and affects about 9,500 people in the United States, according to the FDA.
Allos, which said Folotyn is the first and only drug approved by the FDA as a treatment for PTCL, expects to make the drug available to patients in the United States in October.
The biopharmaceutical company has hired about 25 sales persons till date in anticipation of the drug's trade launch and plans to increase the salesforce to about 50 before the planned commercial launch in January, it said in a conference call.
Allos had cash, cash equivalents and investments in marketable securities of $105.2 million as of June 30.
There is always a possibility for the company to raise additional cash for the launch of the drug, said RBC's Kantor, who has an outperform rating and $12 price target on Allos shares.
The analyst said he expects U.S. Folotyn sales of about $155 million in 2012 and that the next near-term catalyst for the company would be the pricing of the drug, which is expected in October.
Allos said the drug's approval for this indication is based on overall response rate, and clinical benefit such as improvement in progression-free survival or overall survival has not been demonstrated.
It agreed to undertake additional clinical trials to further verify and describe the clinical benefit of the drug.
Accelerated approval by the FDA requires further study after marketing to confirm the product provides meaningful benefits to patients.
Shares of the company were up 22 cents at $8.31 in morning trade. They touched a high of $8.66 earlier in the session.
(Editing by Aradhana Aravindan)