UPDATE 2-Allos' cancer drug extends lung cancer survival

* Q2 loss $0.19/shr $ vs est loss $0.20/shr

* Q2 net product sales of $7.9 mln vs est $10.9 mln

* Shares fall 13 pct (Adds details, analyst comments, updates share movement)

July 28 (Reuters) - Allos Therapeutics Inc ALTH.O said its cancer drug improved survival of patients in a mid-stage trial for another indication, but the drug's lower-than-estimated quarterly sales raised concerns about its market opportunity.

Folotyn is already used for treatment of one of the most deadly and aggressive types of white blood cell cancers. [ID:nBNG157744]

RBC Capital Markets analyst Jason Kantor said analysts had expected Allos to post about $12 million in sales in the second quarter for its cancer drug, Folotyn, much higher than the $9 million reported by the company Wednesday.

Shares of the company were down 10 percent at $5.15 Wednesday morning on Nasdaq. They earlier touched a low of $4.94.

The company was testing Folotyn, versus Tarceva, a drug sold by Roche ROG.VX and OSI Pharmaceuticals OSIP.O, in patients with advanced non-small cell lung cancer, who had received one or two prior systemic treatments.

The main-goal of the trial was overall survival, and the trial was not designed to show a statistically significant difference between the two treatment arms.

“Most people assumed that Folotyn would be a complete failure in lung cancer. However, survival slightly favored Folotyn over Tarceva and the benefit was much larger in the non-squamous patients,” Kantor said.

The largest reductions in risk of death for Folotyn were observed in patients with non-squamous cell carcinoma and light smokers, the company said.

Allos said patients receiving the drug had a 16 percent reduction in the risk of death compared to Tarceva in the overall patient population.

“Positive trends in overall survival were observed in favor of Folotyn in all other patient cohorts except patients with squamous cell carcinoma and patients who received prior pemetrexed,” the company said.

Pemetrexed is a chemotherapy drug used for the treatment of lung cancer.


For the second quarter, the company reported a net loss of $20 million, or 19 cents a share, compared with a loss of $16.8 million, or 19 cents a share, a year ago.

Allos reported net product sales of $7.9 million for the second quarter.

The company, which recorded all its revenue from the sales of Folotyn in the quarter, did not record any revenue in the same period last year.

Analysts on average expected the company to post a loss of 20 cents a share, excluding special items, on revenue of $10.9 million, according to Thomson Reuters I/B/E/S. (Reporting by Anand Basu in Bangalore; Editing by Prem Udayabhanu)