Allos Narrows Loss, Awaits Takeover - Analyst Blog
07 Mai 2012 - 11:45AM
Zacks
Allos Therapeutics
(ALTH) suffered a loss of 11 cents in the first quarter of 2012 as
opposed to a loss of 14 cents per share incurred in the year-ago
quarter. An increase in total revenue coupled with lower costs led
to the narrower loss in the first quarter of 2012. The Zacks
Consensus Estimate hinted at a loss of 5 cents per share. The
results were announced through a filing with the Securities and
Exchange Commission.
Quarterly
Results
Total revenue in the reported
quarter climbed 4.3% to $11.3 million. Net product sales at Allos
fell 10.1% to $9.8 million. Allos derives its product revenues from
selling Folotyn. Folotyn (pralatrexate) is marketed for the
treatment of patients suffering from relapsed or refractory
peripheral T-cell lymphoma (PTCL).
Despite the fall in Folotyn
sales, revenues increased year over year due to the presence
of $1.6 million as license and other revenues pertaining to Allos’
deal with Mundipharma (inked in May 2011) for the co-development of
Folotyn. The Zacks Consensus Estimate was $14 million.
Both selling, general and
administrative (SG&A) and research & development (R&D)
expenses were on the downswing during the quarter, declining 12.5%
and 29.3%, respectively, primarily due to the company’s prudent
cost management strategy.
Allos to be taken over by
Spectrum Pharma
On April 4, 2012, Allos announced
that it will be acquired by Spectrum
Pharmaceuticals (SPPI). Per the terms of the deal,
Spectrum Pharma agreed to acquire Allos for $1.82 per share in
cash, in addition to one contingent value right (CVR).
Spectrum Pharma has initiated a
tender offer to buy the entire outstanding shares of Allos for the
above mentioned purchase price. At the time of announcing the deal,
expected to close shortly, the companies stated that the CVR makes
each Allos shareholder eligible to receive a further 11 cents per
share in cash depending on the conditional European approval and
achievement of certain milestones of Folotyn.
At the time of announcing the deal,
management at Spectrum Pharma had stated that the acquisition,
which has been cleared by the Boards of both companies, is expected
to boost Spectrum Pharma’s earnings in the final quarter of
2012.
Our
Recommendation
Currently, we have an Outperform
Recommendation on the stock. The company carries a Zacks #2 Rank
(short-term Buy rating).
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
SPECTRUM PHARMA (SPPI): Free Stock Analysis Report
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