FDA Grants Orphan Drug Status to Allon Therapeutics, Inc.'s Davunetide for Brain Disease

VANCOUVER, BRITISH COLUMBIA--(Marketwire - January 12, 2010) - Allon Therapeutics Inc. (TSX: NPC) announced today that the United States Food and Drug Administration (FDA) has granted Orphan Drug Designation to the Company's lead neuroprotective drug candidate davunetide for the treatment of Progressive Supranuclear Palsy (PSP), a rapidly-progressing and fatal degenerative brain disease.

Gordon McCauley, President and CEO of Allon, said Orphan Drug Designation brings additional commercial benefits to the Company's program to develop davunetide to become the first approved treatment for a disease often mis-diagnosed as Parkinson's or Alzheimer's disease.

"PSP is devastating for thousands of middle-age patients and their families," said McCauley. "Meeting the desperate need for a treatment is a significant business opportunity for Allon made more attractive by the FDA's Orphan Drug Designation for davunetide."

McCauley said 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 - and we have shown that davunetide is the most advanced tau therapy in the world."

McCauley said davunetide's potential as a treatment for PSP was confirmed in both animal studies and Phase II human clinical trials with patients with amnestic mild cognitive impairment (aMCI), a precursor to Alzheimer's.

"Our research has shown that davunetide reduced tau impairment and preserved memory in mice bred to replicate Alzheimer's or PSP tau pathology. In addition, our Phase II clinical trials have shown that davunetide can also improve memory function in aMCI patients."

Allon's clinical program in this area is expected to begin shortly with a Pilot trial treating a small number of patients with tau impairments, including PSP. This trial will help validate the trial design and prepare for a larger Phase II clinical trial that the Company intends to initiate in 2010. Trial investigators are among the leading experts in the field, including Drs. Bruce Miller and Adam Boxer of the Memory and Aging Center of the University of California, San Francisco.

About PSP

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 200,000 persons in the United States and Canada have been diagnosed with a form of FTD, including 20,000 diagnosed with PSP.

Approximately half of FTDs, including PSP, are tauopathies, which are pathologies that involve impairment of the tau protein in brain cells. McCauley said the Company 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 10 years following onset. The disease is slightly more common in men than women, but there are no known geographical, occupational or racial patterns.

About Orphan Drug Designation

Orphan drug status is granted by the FDA to encourage biotechnology and pharmaceutical companies to develop drugs that demonstrate promise for the treatment of diseases which affect fewer than 200,000 people in the United States.

Orphan Drug Designation qualifies Allon for an accelerated review process, tax credits, financial assistance for development costs, plus seven years of marketing exclusivity if davunetide is eventually approved by the FDA as a treatment for PSP. The designation also allows for a possible exemption from the FDA-user fee and assistance in clinical trial protocol design.

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 restores the function of 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 improved memory function of schizophrenia patients and had a positive impact on the ability of these patients to carry out important activities in their daily lives. The data was presented at the annual meeting of the American College of Neuropsychopharmacology.

About Allon's neuroprotective platforms

Allon's two neuroprotetive 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

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