ALTH Allos Therapeutics, Inc. (MM)

We are maintaining our Outperform recommendation on Allos Therapeutics Inc. (ALTH) following the announcement of decent third quarter 2011 results by the company.

Allos Therapeutics, a Westminster, Colorado based biopharmaceutical company, announced its third quarter 2011 results in November 2011.  The company suffered a loss of $0.11 per share in the quarter, narrower than the year-ago loss of $0.18 and the Zacks Consensus loss estimate of $0.15.

The narrower loss was primarily attributable to higher revenues recorded in the third quarter of 2011. The higher revenues were driven by increased sales of Allos’ sole marketed product, Folotyn. The drug is marketed for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma.

Apart from the earnings report, Allos terminated the proposed merger with AMAG Pharma (AMAG) in October 2011. The deal was called off as it failed to garner shareholder support. We view this development as a positive for Allos, as the merger did not have enough strategic rationale behind it.

The sole marketed products of AMAG and Allos, Feraheme and Folotyn, respectively, have been performing below expectations and do not indicate that sales would improve following the merger. With the deal coming to an end, we believe Allos will be able to focus its attention on making Folotyn a success.

We continue to believe that Allos’ shares are undervalued at current levels with significant scope for upside. In our view, the current price represents an attractive entry point for long-term investors.

 
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
 
AMAG PHARMA INC (AMAG): Free Stock Analysis Report
 
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