Allos Looks To Boost Lymphoma Drug Folotyn's Prospects With Mundipharma Deal

Currently the only approved drug for relapsed or refractory PTCL in the U.S., Folotyn may soon have competition from Celgene's Istodax.

On the same day that Allos Therapeutics presented lackluster sales figures and guidance for the cancer drug Folotyn (pralatrexate), the biotech also achieved a key strategic goal by announcing a co-development and commercialization pact for the therapy with the U.K.' s Mundipharma International Corporation Ltd.

Folotyn, a folate analogue metabolic inhibitor, was approved under accelerated review by FDA in 2009 for relapsed or refractory peripheral T-cell lymphoma (Also see "Post-Market Requirements Could Broaden Label For Allos' Newly Approved PTCL Drug Folotyn" - Pink Sheet, 25 Sep, 2009.). It is the only drug approved in the U.S. for relapsed or refractory PTCL, a grouping of blood cancers that accounts for between 10% and 15% of all cases of non-Hodgkin lymphoma.

Allos estimates there are about 5,900 new cases of PTCL annually in the U.S. and another 6,000 to 7,000 in the top five European markets, where there is no approved drug therapy. The Westminster, Colo.-based biotech says proprietary research indicates a market of about $400 million annually for the disease in the U.S. and about the same in the rest of the world.

During a May 10 investor call to present first quarter earnings and announce the Mundipharma tie-up, David Clark, Allos' VP of finance and treasurer, reported first-quarter sales of just $10.9 million for Folotyn, considerably below analyst projections. He also forecast 2011 sales for the drug of $48 million to $55 million, 36% to 56% growth over 2010 sales revenues of $35.2 million.

Folotyn has been filed with the European Medicines Agency, and a regulatory decision is expected in early 2012. Meanwhile, Allos' monopoly in the U.S. may be short-lived, as Celgene Corp. has a June 17 PFUFA date for its application to add progressive or relapsed PTCL to the label of its HDAC inhibitor Istodax (romedepsin), which already is approved for second-line therapy in cutaneous T-cell lymphoma (Also see "Celgene Pays $340 Million For Gloucester And Its New Drug" - Pink Sheet, 7 Dec, 2009.).

Building Awareness Of PTCL

In a May 10 note, J.P. Morgan analyst Geoff Meacham said he remains bullish on Allos despite the disappointing sales totals and guidance, adding that the deal with Mundipharma "removes a big financing overhang and addresses concerns about Folotyn development constraints."

"The company appears to make some progress with the Folotyn launch" he wrote. "We recognize that the Folotyn launch is taking more time than we expected to meaningfully accelerate, but in our view the launch of Celgene's Istodax may ultimately help build PTCL awareness and market growth."

One of the challenges Allos has faced in marketing Folotyn has been prescriber education about PTCL and differentiating it from other forms of NHL. VP-Sales and Marketing Michael Schick told investors the company believes it can grow Folotyn sales by focusing on three basic drivers: increasing market share within existing accounts, growing new accounts and optimizing duration of treatment.

"With respect to account targeting and penetration, we have identified approximately 2,000 accounts and approximately 3,000 physicians as priority targets for our sales force," he said. "We continue to grow our penetration in these accounts and, through March 2011, approximately 29% of these accounts have ordered Folotyn since our launch ... . Importantly, we grew the number of new accounts and the number of re-ordering accounts in Q1 2011 over Q4 2010."

Allos, which drew criticism from patient advocacy groups for launching Folotyn at a monthly price of $30,000, is marketing the drug with a sales force of 50. Under terms of the deal with Mundipharma, Allos will retain commercial rights in the U.S. and Canada, with the British firm holding those rights in the rest of the world. Privately-held Mundipharma, part of a consortium of allied pharmas that includes the U.S.-based Purdue Pharma, has an ex-U.S. sales force of more than 100 that already is detailing Levact (bendamustine) in hematological cancers.

Allos' VP of Pharmaceutical Operations Bruce Bennett noted that Mundipharma and its associated companies have fully integrated oncology-focused operations in Europe as well as operations in Asia and a distribution network that covers Latin America.

"We believe Mundipharma has the oncology infrastructure and, importantly, the desire and bandwidth to specifically focus on Folotyn as a key brand in [its] portfolio of commercial products," he said. "Our brand is well aligned with both the hematology franchise they've developed in Europe and are developing globally."

Post-Marketing Trial Requirements

Under FDA's accelerated review process, which allows approval based on initial positive clinical data for drugs that treat cancer or other life-threatening diseases, Folotyn was approved on the basis of a single Phase II trial, PROPEL, which showed a benefit of 27% overall response rate and a median duration of response of 9.4 months.

The approval came with a requirement for four post-marketing trials, in which Allos will be expected to demonstrate that the drug also provides benefit in progression-free survival and/or overall survival. These trials include planned Phase III studies in previously undiagnosed PTCL and in combination therapy with bexarotene (Ligand Pharmaceuticals' Targretin) in relapsed or refractory cutaneous T-cell lymphoma.

The co-development portion of the Mundipharma deal calls on the British firm to fund 40% of the costs of those trials. The cost-sharing would be split 50/50 if Folotyn's Marketing Authorization Application (MAA) is approved.

Allos also can earn commercial progress- and sales-based milestones totaling up to $310.5 million under the partnership, along with tiered double-digit royalties on sales occurring in Mundipharma's licensed territories.

"We believe Mundipharma is the ideal global partner because of their development, regulatory and commercial capabilities and, importantly, their substantial resources and demonstrated track record of success in bringing hematology oncology drugs to market in Europe," Allos CEO Paul Berns said.

In addition to hematological cancers, Allos also is investigating Folotyn in solid tumors, with Phase II data expected in breast and bladder cancer during the second half of 2011.

-Joseph Haas ([email protected])