Allon Therapeutics, Inc. Receives European Orphan Drug Status for Davunetide

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 17, 2010) - Allon Therapeutics Inc. (TSX: NPC) announced today that its lead neuroprotective drug candidate, davunetide, has been granted Orphan Drug Status in the European Union (EU) for the treatment of Progressive Supranuclear Palsy (PSP), a rapidly-progressing and fatal degenerative brain disease. Allon announced on January 12, 2010 that the U.S. Food and Drug Administration granted davunetide Orphan Drug Status for PSP treatment in the United States.

Gordon McCauley, President and CEO of Allon, said the EU designation extends both the scientific validation and the potential market for davunetide as a treatment for PSP as well as other degenerative brain diseases with similar pathologies.

“Extending davunetide’s potential use in the area of PSP is a significant business opportunity for Allon, made even more attractive by achieving Orphan Drug Designation in the world’s two largest pharmaceutical markets, the U.S. and the EU,” said McCauley. “Allon has demonstrated a strong scientific and clinical rationale for the potential efficacy of davunetide in PSP. The pathology of PSP and Alzheimer’s is similar in that both diseases involve impairment of the brain protein tau. Our clinical trial program is focused on confirming davunetide’s potential to be the first approved treatment for PSP and other brain diseases involving tau impairment.”

Research has shown that davunetide reduced tau impairment and preserved memory in mice bred to replicate Alzheimer’s or PSP tau pathology. In addition, Phase 2 clinical trials have shown that davunetide can also improve memory function in patients with amnestic mild cognitive impairment (aMCI), a precursor to Alzheimer’s disease in which a primary neuropathology involves tau.

“We are pleased to have reached this important milestone and look forward to working with the European regulators as we plan and begin the European portion of our upcoming PSP clinical trial,” said McCauley.

Allon announced January 26, 2010 that the clinical trial program for PSP is commencing with a pilot clinical trial in the U.S. sponsored by the Memory and Aging Center of the University of California, San Francisco (UCSF). This pilot clinical study, enrolling approximately 12 patients, will help Allon and its clinical collaborators validate the trial design and prepare for a larger multinational Phase 2 PSP clinical trial scheduled to begin this year.

Trial investigators are among the leading experts in the field, including Drs. Bruce Miller and Adam Boxer of the UCSF Memory and Aging Center.

On March 11, 2010, Allon announced it had completed a Phase 1 clinical trial that broadened the demonstrated safety and dose range of davunetide. Davunetide has already shown human efficacy and safety in clinical trials with daily doses of 5 mg and 30 mg. The new trial evaluated the drug’s safety and pharmacokinetic profile at doses up to 60 mg per day.

About Progressive Supranuclear Palsy

PSP is one of a group of progressive disorders called frontotemporal dementia (FTD), that affect the frontal and temporal lobes of the brain, and for which there are no approved treatments. Approximately 20,000 and 50,000 persons in the U.S. and EU, respectively, have PSP.

Approximately half of FTDs, including all cases of PSP, are tauopathies, which are pathologies that involve impairment of the tau protein in brain cells. Allon expects that efficacy in PSP will define the opportunity to use davunetide in other FTD subtypes that are tauopathies.

PSP is often characterized by progressive difficulty with balance and walking, eye movement abnormalities, and cognitive and personality changes. Patients are typically diagnosed when they are between 45 and 65 years of age. PSP is associated with progressive disability and death with a median survival of five to eight years following onset. The disease is slightly more common in men than women, but there are no known geographical, occupational or racial patterns.

About EU Orphan Drug Designation

Orphan drug designation in Europe is granted to medicinal products intended for the diagnosis, prevention and treatment of life-threatening diseases that affect not more than five in 10,000 people in the European Union and for which no effective therapy or only a sub-optimal therapy exists.

EU Orphan Drug Designation qualifies Allon for guidance from the European Medicines Evaluation Agency on preparing and executing a clinical trial program that will meet EU marketing approval requirements, for financial assistance for development costs and reduced regulatory fees, plus 10 years of marketing exclusivity if davunetide is eventually approved as a treatment for PSP.

It should be noted that orphan drug designation does not limit a drug to use in less common diseases. The drug may, in parallel or afterwards, be developed for more common diseases.

About davunetide

Davunetide is derived from a naturally occurring neuroprotective brain protein known as activity dependent neuroprotective protein (ADNP). Allon’s laboratory and animal studies have shown that davunetide improves cognition in a number of disease models through a mechanism believed to involve effects on structures in the brain - known as microtubules which are critical to communication between brain cells and the structure of individual cells.

In 2008, Allon reported Phase IIa clinical trial results showing that davunetide had a statistically significant positive impact on memory function in patients with amnestic mild cognitive impairment (aMCI), a precursor to Alzheimer’s disease (AD). The data was presented July 28 and July 30, 2008 to the International Conference on Alzheimer’s Disease and Related Disorders (ICAD 2008).

On December 7, 2009, Allon reported Phase IIa clinical trial results showing that davunetide had a statistically significant positive impact on the ability of schizophrenia patients to carry out important activities in their daily lives. These data was presented at the annual meeting of the American College of Neuropsychopharmacology.

About Allon’s neuroprotective platforms

Allon’s two neuroprotective technology platforms are based on two naturally occurring proteins produced by the brain in response to a range of insults. The platforms are activity-dependent neuroprotective protein (ADNP) and activity-dependent neurotrophic factor (ADNF).

Because the two platforms are based on different proteins, the drugs from each are different molecules with different therapeutic mechanisms and distinct commercial opportunities. Clinical-stage drugs based on davunetide are derived from ADNP, while preclinical stage drug AL-309 is derived from ADNF. Davunetide is focused on Alzheimer’s disease, cognitive impairment in schizophrenia, and frontotemporal dementia. ADNF drug candidate AL-309 is being developed for the treatment of peripheral neuropathies and is administered orally or subcutaneously.

About Allon

Allon Therapeutics Inc. is a clinical-stage biotechnology company developing treatments for major neurodegenerative conditions. Allon’s drug davunetide has demonstrated human efficacy in amnestic mild cognitive impairment, a precursor to Alzheimer’s disease, and cognitive impairment associated with schizophrenia. Allon has Phase II human efficacy programs pursuing large underserved markets, such as Alzheimer’s disease and cognitive impairment associated with schizophrenia, and in orphan markets, such as frontotemporal dementias. The Company is listed on the Toronto Stock Exchange under the trading symbol “NPC” (Neuro Protection Company™) and based in Vancouver. For additional information please visit the Company’s website: www.allontherapeutics.com.

Forward Looking Statements

Statements contained herein, other than those which are strictly statements of historical fact may include forward-looking information. Such statements will typically contain words such as “believes”, “may”, “plans”, “will”, “estimate”, “continue”, “anticipates”, “intends”, “expects”, and similar expressions. While forward-looking statements represent management’s outlook based on assumptions that management believes are reasonable, forward-looking statements by their nature are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by them.

Such factors include, among others, the inherent uncertainty involved in scientific research and drug development, Allon’s early stage of development, lack of product revenues, its additional capital requirements, the risks associated with successful completion of clinical trials and the long lead-times and high costs associated with obtaining regulatory approval to market any product which Allon may eventually develop. Other risk factors include the limited protections afforded by intellectual property rights, rapid technology and product obsolescence in a highly competitive environment and Allon’s dependence on collaborative partners and contract research organizations. These factors can be reviewed in Allon’s public filings at www. SEDAR.com and should be considered carefully. Readers are cautioned not to place undue reliance on such forward-looking statements.