Phase IIa Clinical Data Confirms Potential of Allon Therapeutics, Inc.'s Davunetide as a Treatment for Cognitive Impairment in Schizophrenia Patients

VANCOUVER, BRITISH COLUMBIA--(Marketwire - December 07, 2009) - Allon Therapeutics Inc. (TSX: NPC) announced today that the results of a Phase IIa clinical trial presented at a major scientific meeting indicate that the Company’s lead neuroprotective drug candidate davunetide achieved measurable positive treatment effects in schizophrenia patients with cognitive impairment.

The trial was managed by TURNS (Treatment Units for Research on Neurocognition and Schizophrenia), with substantial financial support from the National Institute of Mental Health (NIMH), part of the U.S. National Institutes of Health.

Dr. Daniel Javitt, lead study investigator and Director of Cognitive Neuroscience and Schizophrenia at the Nathan Kline Institute for Psychiatric Research in Orangeburg, N.Y., said the data presented today supports and augments top-line results released in July 2009.

“Further evaluation in a large number of patients is necessary and warranted to determine whether davunetide could become the first approved treatment for cognitive impairment associated with schizophrenia,” said Dr. Javitt.

Results and analysis presented to a U.S. neuropsychopharmacology scientific conference being held in Hollywood, Florida indicate the following.

- The trial did not achieve statistical significance on the primary endpoint, which was the MATRICS (Measurement and Treatment Research to Improve Cognition in Schizophrenia) composite battery of tests. However, numerical positive treatment effects were seen in specific tests that measured visual learning and working memory. A change was observed in verbal learning favouring placebo.

- The trial achieved a statistically significant positive treatment effect on a secondary endpoint, which was the UCSD (University of California at San Diego) Performance-based Skills Assessment (UPSA) test. The UPSA scale assesses the functional capacity of skills for daily living and has been recognized by drug regulators as an appropriate co-primary endpoint in patients suffering from schizophrenia-related cognitive impairment.

“In addition to the statistically significant improvement on UPSA, the potential positive impact on important cognitive domains like visual learning and working memory is an important step forward and consistent with Allon’s results from its human clinical trial in amnestic mild cognitive impairment (aMCI),” said Dr. Javitt.

“This was a small exploratory trial designed to look for a signal of efficacy and determine whether further clinical trials are warranted,” said Dr. Javitt. “The results are encouraging on both accounts: we believe this trial shows a clinically relevant signal of human efficacy that warrants additional study in an adequately powered trial.”

Trial data showed that davunetide was safe and well tolerated by patients with adverse events typical of this patient population. The most commonly reported adverse events were headache, restlessness and sedation.

The trial was undertaken by TURNS based on Allon’s pre-clinical studies showing that davunetide promoted neuronal survival and maintained normal cell connections within the brain, mechanisms thought to be impaired in schizophrenia. The effect of davunetide on microtubule function is thought to be crucial in this regard. Subsequently, Allon reported Phase IIa clinical trial data to the Alzheimer’s Association at the July 2008 International Conference on Alzheimer’s Disease and Related Disorders (ICAD 2008) that showed davunetide had a positive impact on memory function in patients with aMCI, a precursor to Alzheimer’s disease (AD).

Dr. Javitt said, “Today’s data presentation suggests that microtubules and neurite outgrowth may well be key to the treatment of these patients. The data also provide strong validation of the TURNS initiative of testing compounds that might not otherwise be evaluated in this patient population. It provides hope for finding new treatments in this area of high unmet medical need.”

Dr. Steven Whitaker Allon’s Vice President, Clinical Development and Chief Medical Officer, said although there are drug sales of $6 billion annually to treat the psychosis associated with schizophrenia, there are no drugs approved for treating the cognitive impairment associated with the disease.

“We believe these results represent important progress in the development of the first drug to treat the cognitive impairment of millions of people suffering from schizophrenia,” said Dr. Whitaker.

Gordon McCauley, Allon’s President and CEO, said in addition to representing desperately needed hope for schizophrenia and Alzheimer’s patients, these results validate the Company’s business strategy of seeking positive results in different clinical indications.

“This is the second human clinical trial where davunetide has demonstrated statistically significant results against important endpoints. It is particularly encouraging that we are seeing improvement in similar domains related to learning and memory in schizophrenia patients as we saw in aMCI patients,” said McCauley.

Trial design

The Phase IIa clinical trial was a randomized, double-blind, placebo-controlled, parallel group study, to assess the effect of davunetide in patients with cognitive impairment associated with schizophrenia. Two doses of davunetide administered intranasally, 5 mg once daily, and 15 mg twice daily, were compared to placebo. Patients were treated for 12 weeks. All patients were on a stable dose of an approved anti-psychotic therapy.

The primary endpoint measure was the MATRICS composite battery score. A number of pre-specified secondary endpoints were also used including the individual subtests of the MATRICS battery and the UPSA. Clinical symptoms were tested using several tests: Brief Psychiatric Rating Scale (BPRS); Scale for the Assessment of Negative Symptoms (SANS); Calgary Depression Scale (CDS); and Clinical Global Impression Scale (CGI). Functional Assessments used: The UCSD Performance-Based Skills Assessment (UPSA) and the Schizophrenia Cognition Rating Scale (SCoRS). General Safety Assessments included: the Simpson Angus Extrapyramidal Symptom Rating Scale (SAS); Abnormal Involuntary Movement Scale (AIMS); and Side Effect Checklist (SEC).

A total of 54 patients completed the trial at seven leading medical institutions in the United States: Nathan S. Kline Institute (Daniel Javitt, MD, PhD and Principal Investigator for the study); University of California at Los Angeles (Stephen R. Marder, MD and the Principal Investigator for the TURNS Network); Maryland Psychiatric Research Institute (Robert Buchanan, MD); Washington University (John Csernansky, MD); Massachusetts General Hospital (Donald Goff, MD); Columbia University (Jeffrey Lieberman, MD); and Duke University (Joseph McEvoy, MD). Data were managed at the Nathan S. Kline Institute (James Robinson, PhD.), and analyzed at the Maryland Psychiatric Research Institute (Robert McMahon, PhD.).

Trial results

MATRICS composite battery

The MATRICS battery is designed to measure specific cognitive domains that are impaired in schizophrenia. It is made up of a number of tests measuring working memory, attention/vigilance, visual learning and memory, verbal learning and memory, processing speed, problem solving and social cognition. No significant effect of davunetide was observed on the MATRICS composite score.

Although davunetide didn’t reach statistical significance, numerical changes in the MATRICS composite score relative to placebo were observed at week six, in which the low dose of davunetide (5 mg) reached an effect size of 0.2 SD with p=0.17. This suggests an encouraging trend towards a clinically meaningful change on the MATRICS composite.

When examining individual domains that make up the MATRICS composite, small (0.2 SD) to moderate (0.5 SD) numerically positive changes were seen following treatment with davunetide (5mg) relative to placebo on the Brief Visuospatial Learning test (visual learning) and Letter-Number Sequencing (working memory) tests. These findings are consistent with the domains impacted by davunetide in the aMCI trial (delayed-match-to-sample and digit span).

A moderate change was observed in verbal learning favoring placebo. Placebo was superior to davunetide in the verbal memory domain, possibly indicative of a higher than expected placebo response.

Performance-based skills assessment (UPSA)

As outlined in Allon’s July 9, 2009 release, davunetide had a statistically significant effect (p=0.015) on the UPSA test. The full data set reported today detailed specifically that davunetide (5 mg) had an effect on the UPSA score at both six weeks (p=0.023) and 12 weeks (p=0.088). The higher dose did not reach significance at either six weeks or 12 weeks. As analyzed by TURNS, these scores are averaged over the two time points, and davunetide had a robustly significant effect at 5mg (p=0.015) and trended toward significance at the higher dose (p=0.11) on this measure.

Of specific interest here is the size of treatment effect which was 1.0 standard deviation (SD) at week six and approx. 1.3 SD at week 12. These are clearly large treatment effects in a patient population in which treatment effects of 0.2 SD to 0.5 SD are considered clinically meaningful.

There was no statistical significance observed on additional endpoints such as the Schizophrenia Cognition Rating Scale or the Clinical Global Impression. There was no effect on underlying psychosis (Brief Psychiatric Rating Scale) and no exacerbation of negative symptoms or depression (Calgary Depression Rating Scale, Schedule for Assessment of Negative Symptoms).

Davunetide was well tolerated in this trial with a safety profile supportive of further development using longer treatment duration.

Brain imaging study

In addition, TURNS and Allon collaborated on a companion study looking at changes in brain imaging in a small subset of the patients from the Phase IIa study. Analysis of the images from this study has not yet been analyzed or received by the Company.

Conference Call

Allon Therapeutics will hold a conference call and webcast to discuss the Phase IIa trial results today, Monday, December 7, 2009, at 6:30 p.m. Eastern Standard Time (3:30 p.m. Pacific Standard Time). The call will be hosted by Matthew Carlyle, CFO of Allon, and include Gordon McCauley, President and CEO of Allon, Dr. Steve Whitaker, Vice-President Clinical Development and Chief Medical Officer, and Dr. Bruce Morimoto, Vice-President, Drug Development of Allon. Dr. Daniel Javitt, principal investigator in the Phase IIa trial, will also participate in the call. The conference call will be followed by a question and answer session.

To access the conference call by telephone, dial 1-647-427-7450 or 1-888-231-8191. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until January 7, 2010 at midnight. To access the archived conference call, dial 1-416-849-0833 or 1-800-642-1687 and enter the password 45667772 followed by the number (#) sign.

A live audio webcast of the conference call will be available at http://www.allontherapeutics.com/events_webcasts.html. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived on the Company’s website for 90 days.

About cognitive impairment associated with schizophrenia

In the United States, more than two million people suffer from schizophrenia in a given year, according to the National Institute of Mental Health (NIMH). In Europe, the European Federation of Associations of Families of People with Mental Illness estimates that 6.6 million people suffer from schizophrenia. While there are sales of $6 billion to treat the psychosis associated with schizophrenia, there are no drugs approved for treating cognitive impairment associated with schizophrenia.

Recent research indicates that cognitive impairments in areas such as attention, memory and problem solving are responsible for much of the disability associated with the disease. Cognitive impairments are common at the onset of schizophrenia and can frequently be identified before psychotic symptoms emerge. In contrast to psychotic symptoms which are typically episodic, impairments in cognition appear to be a chronic feature of the illness.

Cognitive impairments are important as a treatment target because they have a substantial impact on the outcome of schizophrenia. Apart from psychotic symptoms, cognitive deficits in schizophrenia patients impact how they function, including social outcome, vocational outcome, and success in rehabilitation programs. The NIMH estimates that only one in five patients is able to recover from their cognitive impairment sufficiently to be employed.

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).

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 fronto-temporal 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: Alzheimer’s disease, frontotemporal dementia, and cognitive impairment associated with schizophrenia. 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.

About TURNS

The Treatment Units for Research of Neurocognition in Schizophrenia (TURNS) program is a National Institute of Mental Health (NIMH) supported network that provides an infrastructure for clinical studies of pharmacological agents for enhancing neurocognition in patients with schizophrenia. For additional information visit www.turns.ucla.edu.

Forward Looking Statements

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