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Allon Therapeutics is known as the Neuro Protection Company
because their technology has shown broad efficacy against a number of applications such as
Alzheimers, Multiple Schlerosis, ALS, or acute indications like stroke, or traumatic brain
Allon Therapeutics Inc.
315-1681 Chestnut Street
Vancouver, BC Canada V6J 4M6
President and Secretary
Interview conducted by:
Lynn Fosse, Senior Editor
June 2, 2005
Gordon McCauley - President and Secretary
Gordon McCauley was appointed President of Allon in 2004. Mr. McCauley is a co-founder,
and the former President and COO of Neuro Discovery Inc. Prior to co-founding NDI, he led
the successful growth and development of two Canadian healthcare companies. Outside of the
healthcare industry, Mr. McCauley has been a senior sales and public affairs executive for
a Canadian multinational energy company and served in a staff capacity to two Prime
Ministers and former Ontario Premier David Peterson. Mr. McCauley is active in industry
associations, serves in the Board of Hallmark Insurance and the Business Advisory Board of
the Institute for the Study of Aging.
Allon's sole focus is developing neuroprotective therapeutic molecules. Allon's drug
candidates have been shown to work at the cellular level to protect or shield neurons from
injury. They have been extensively validated in animal models of neurodegeneration
diseases and trauma, and are safely tolerated, bioavailable and suitable for drug
Allon's ongoing research and
development activities are conducted through a research agreement with Tel Aviv University
(TAU), Israel. The company was incorporated in July 2001 to commercialize a
neuroprotective drug discovery platform and drug candidates licensed from the U.S.
National Institutes of Health (NIH) and TAU. The technology is the result of a research
collaboration between Dr. Douglas E. Brenneman (NIH) and Professor Illana Gozes (TAU),
Chief Scientific Officer of Allon.
Mr. McCauley, what attracted you to the company and how has Allon changed under your
Mr. McCauley: "What attracted me was that Allon has two
things that you want in a biotechnology company. First, is the tremendous technology that
has been widely validated internationally in fifteen different independent laboratories.
There are something like fifty some odd journal articles written about this technology. It
is very sound and very valuable technology. Secondly, is scientific leadership committed
to the company. Professor Illana Gozes is the scientific founder of the company and the
co-inventor of the technology; she is highly respected throughout the scientific community
and is a leader in neuro protection. When you look at those two things, that tells you
there are tremendous opportunities here. What needed to be added was some biotechnology
business leadership, which is what our team brought to the equation. We put together a
team that is strong in terms of the expertise it has in biotechnology, running clinical
trials and raising capital.
This is a team with a proven track record, having help build companies like QLT, probably
one of the preeminent biotech stories in the world. It is a team well tested that works
well together. In the time that we have been working together, we have taken that
tremendous technology and a lot of passion and we converted it into a clinical program
that has received approval from the FDA to proceed with clinical trials, which we will do
in very short order. Within two-and-a-half months we filed our first investigational new
drug application with the FDA. A month later we received approval from the FDA to go into
clinical trials and ten days later, which is next week, we will dose our first patient. We
have put together the execution component of the business. Given the breadth of the
technology, we have a second investigational new drug application that will be filed in
the second quarter and a second set of Phase I trials to start shortly thereafter. We are
taking terrific technology, terrific scientific leadership and put it onto a development
and commercialization path."
What is the technology?
Mr. McCauley: "The new drug we call AL-108. It is a
potential treatment for Alzheimer's disease; it is given intranasally. What is interesting
about it is that everybody understands that there are two hallmarks of Alzheimer's, the
first is the almyloid-beta plaques that accumulate outside neurons in the brain and the
second is the neurofibrillary tangles that accumulate inside neurons. What our drug seems
to do is prevent the accumulation of almyloid-beta plaques and where there are plaques,
dissolve them. Secondly, prevent the accumulation of tangles. It has the potential to be a
disease modifying treatment and you should note that if you look at the marketplace today,
it is a relatively significant marketplace, something like $24.5 billion in the seven
major pharmaceutical markets, but there is not one disease modified treatment out there,
they are all symptomatic treatments."
Is this for the early stages of Alzheimer's or to prevent it before it develops?
Mr. McCauley: "We will see as the results come along.
Certainly, based on the data we have today, it has the potential to be both of those
things. It has the potential to be a prophylactic treatment that you would give to people
perhaps with mild cognitive impairment or with early-stage Alzheimer's. It has tremendous
potential; we will have to see where the clinical trials take us to make sure we are in
the right place. The fact of the matter remains that there is a significant un-met medical
need that is growing rapidly and based on life expectancy data today, by the time we are
eighty years old, one in three of us will have Alzheimer's. It is a significant
What is down the road for Allon?
Mr. McCauley: "Firstly, we will continue with intranasal
administration for Alzheimer's. We expect to find ourselves by the end of the year, having
completed Phase I studies and be poised in the early part of 2006, to begin pilot Phase II
clinical trial, the efficacy trial. Secondly, AL-208, which is an intravenous
administration that we are taking to the clinic for mild cognitive impairment associated
with cardiac surgery. We will complete Phase I trials by the end of 2005. We will be
into Phase II efficacy studies in the first half of 2006. At the same time, we are also
looking at other indications for our technology and we are looking for additional
technology to bring into the company. We will take from where we are today, an emerging
biotech company that does what it says it is going to do to, to a more robust sustainable
company, which is where we will find ourselves at the end of the year."
How are you funding all of this?
Mr. McCauley: "Allon is a publicly traded company on the
Toronto Stock Exchange Venture Exchange. We raised about ten million dollars last year.
In addition to the capital that we have in-place for the company, means that we
finished a third quarter of last year, with about $11 million. What that means is that we
have the capital in-place to take us through a Phase II a trial and certainly through 2006
based on what we know today. That is a good capital position and we are judicious with the
way we are spending our capital. The majority of it goes towards the clinical development
of our technology. At the same time, as we look at other technologies to bring in, we
might look at opportunities to increase our capital. Right now we are in a strong position
if we remained focused on what we said we are going to do in developing the clinical
potential of this product."
Do you see partnerships down the road?
Mr. McCauley: "Absolutely! I think it would be wise for
us to look at partnering our lead product probably when we are nearing the end of our
Phase II a trials. At the same time, there are other indications where those products have
shown efficacy in various animal models that might not be indications that we would pursue
in our own steam and we would partner. I am not making promises but am certainly
looking for partnerships. I think when you look at the major pharmaceutical or big biotech
companies, they have a significant appetite for neuroprotective kinds of compounds and
that is what we have here."
You have recently gotten a patent out, will you tell us more about this?
Mr. McCauley: "That is a patent on one of the products
for learning and memory enhancement. The patent further protects the portfolio that we
have and makes it more valuable. One of the areas where that particular patent has some
interesting application from a broader public health perspective is in treating fetal
alcohol syndrome, which is a pernicious problem in a number of communities."
You call yourselves NPC, the Neuro Protection Company; will you give us an idea of the
broad range of areas that neuro-degerative diseases cover?
Mr. McCauley: "NPC is about some of the larger diseases
like Alzheimer's, Multiple Sclerosis, ALS, or acute indications like stroke, or traumatic
brain injury and neuropathy associated with certain diseases like cancer and diabetes. It
is a broad category. We deliberately called ourselves the Neuro Protection Company because
this technology has shown broad efficacy against a number of those applications. We
think it is a place, where a specific set of expertise ought to be developed and focused
on clinical development."
Is there much competition in the approach to Alzheimer's that you are taking?
Mr. McCauley: "There are a number of high quality groups
in the world today, both within companies and within clinical and academic settings, in
Alzheimer's. There are high quality researchers all over the place. We have taken a unique
approach, there is no question. Our technology focuses on looking at the cellular levels
and the two main hallmarks of Alzheimer's that I talked about earlier. It has broad
efficacy. There are others out there but our technology has real potential given that it
works at the cellular level, given that it works with relatively small doses, and given
the breadth of the efficacy data that we took to the FDA for approval."
In closing, what should potential investors about Allon that they might not realize when
they first look at the company, and why should they be interested now?
Mr. McCauley: "What they may not know about the company
when they look at it is the breadth of the technology and the breadth of the opportunity
that exists with our core portfolio of compounds. At the same time, they may not recognize
the strength of the team. This team has helped create about $2 billion worth of
shareholder value in biotechnology doing exactly what we are doing in Allon, by
identifying clinical signals of efficacy, which is the critical element that you pursue.
Besides those two points, I think people should be interested because from a valuation
perspective, it is very attractive today. When you compare Allon, as a clinical stage
company, to some of the peer groups in the pre-clinical range and some of the peer groups
in the Phase I range, we are strong and the data shows that. Part of the reason we are
undervalued is because we decided to focus our energies more on getting into the clinical
and focus more executing the plan - 99% of success is execution. We will be more
aggressive about telling people what we are doing and getting the story out there."
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