Allos Therapeutics, Inc. (NASDAQ:ALTH.DL)

CAPS Rating: No stars

A biopharmaceutical company focused on developing and commercializing innovative small molecule drugs for the treatment of cancer.

Recs

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Player Avatar zzlangerhans (99.80) Submitted: 1/21/2011 4:46:40 AM : Outperform Start Price: $3.85 ALTH.DL Score: -61.22

Nothing like a zzlangerhans pick to make a stock break out of recent range in the opposite direction. I had my eye on Allos to green thumb at around 4, the low end of recent range. The company just reported higher-than-expected Folotyn revenues and the EMEA has accepted the company's application for Folotyn for PTCL. The share price responded to my pick by establishing a new four-year low.

It's hard to establish a valuation for Allos. The company has an approved drug with increasing revenues and a reasonable cash base, making them a potential buyout candidate. European approval and additional phase III studies of Folotyn in PTCL and CTCL may continue to push Folotyn revenues higher, but there do not appear to be other pipeline compounds in clinical trials. Recent plans to expand Folotyn usage to lung cancer have been shelved after weak data. The low share price hides a sizable 380M cap after years of dilution, and the burn rate remains very high despite Folotyn revenues.

In short, I was hoping for a rebound in a range-bound stock and now I'm in danger of riding another leg downward. CAPS only play for sure unless the share price drops below 3 on a broad biotech pullback and quiet seas until the next quarterly earnings.

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