Allon Therapeutics Inc. (TSX: NPC) announced that it has reached agreement with the United States Food and Drug Administration (FDA) on a Special Protocol Assessment (SPA) for a pivotal Phase 2/3 clinical trial to evaluate the Company's lead neuroprotective drug candidate, davunetide, as a potential treatment for progressive supranuclear palsy (PSP), a rapidly-progressing and fatal degenerative brain disease.

The SPA is a mechanism through which the FDA and Allon reach agreement on the design, size, clinical endpoints, and data analysis of a clinical trial that is intended to support an efficacy claim in a New Drug Application (NDA) for regulatory approval. The SPA ensures that the agreed clinical trial design meets the FDA's expectations for a pivotal study. Allon believes that if this pivotal study generates statistically significant and consistent data, davunetide will be considered by FDA for approval in PSP.

Gordon McCauley, President and CEO of Allon, said the SPA agreement gives Allon a clear path to develop davunetide for the treatment of PSP and provides a foundation for further development in other brain diseases involving tau pathology.

"This SPA is an important part of our regulatory strategy for davunetide. We believe the pivotal trial agreed to in the SPA will generate data in about 2 years that will form the basis of approval of davunetide in PSP," said McCauley.

"Most important is the opportunity to help thousands of patients who suffer from a debilitating and fatal disease," said McCauley. "PSP patients and their families endure an unspeakable tragedy, often dying a little more than three years after diagnosis."

"Our research to date suggests that davunetide will work in patients with the tau pathology which is a characteristic feature of PSP. Given these outcomes and that there is a recognized rating scale measuring clinically relevant outcomes, we believe there is a strong rationale to pursue approval in PSP."

The pivotal Phase 2/3 randomized, double-blinded, placebo controlled trial in PSP will enroll 300 patients in the United States, Canada, United Kingdom, France, Germany, and Australia. Study participants will receive either placebo or 30 mg of davunetide administered twice daily for a period of 12-months.

The primary outcome measures will be the Progressive Supranuclear Palsy Rating Scale (PSPRS) and the Schwab and England Activities of Daily Living (SEADL) scale. Secondary measures will include Clinical Global Impression (CGI) and brain imaging by magnetic resonance tomography (MRI). Additional exploratory endpoints include cognitive and executive function as well as cerebrospinal fluid (CSF) biomarkers.

Allon previously announced that davunetide received orphan drug designation in the United States (January 12, 2010) and the European Union (March 17, 2010), Fast Track Status with the FDA (April 6, 2010), and that davunetide met the primary outcome measure of safety and tolerability, with potential trends from secondary efficacy endpoints, in a pilot study of 12 patients suffering PSP and related tau pathology disorders (October 8, 2010).

About PSP

PSP is one of a group of progressive disorders called frontotemporal dementias (FTD) that affect movement, speech, and behavior, and for which there are no approved treatments. Approximately 20,000 and 50,000 persons in the U.S. and EU respectively have PSP.

Approximately half of FTDs, including PSP, are tauopathies, which are pathologies that involve impairment of the tau protein in brain cells. Allon expects that demonstrating efficacy in PSP will define the opportunity to use davunetide in other FTD subtypes that are tauopathies.

PSP is often characterized by progressive difficulty with balance and walking, eye movement abnormalities, and cognitive and personality changes. Patients are typically diagnosed when they are between 45 and 75 years of age. PSP is associated with progressive disability and death often three years following diagnosis. The disease is slightly more common in men than women, but there are no known geographical, occupational, or racial patterns.

Davunetide for PSP

Allon has demonstrated a strong scientific and clinical rationale for the potential efficacy of davunetide in PSP. The pathology of PSP and Alzheimer's is similar in that both diseases involve impairment of the brain protein tau - and davunetide is the most advanced tau therapy in the world.

Research has shown that davunetide reduced tau impairment and preserved memory in mice bred to replicate Alzheimer's or PSP tau pathology. In 2008, Allon reported Phase 2a clinical trial results showing that davunetide had a statistically significant positive impact on memory function in patients with amnestic mild cognitive impairment (aMCI), a precursor to Alzheimer's. The data was presented July 28 and July 30, 2008 to the International Conference on Alzheimer's Disease and Related Disorders (ICAD 2008).

On December 7, 2009, Allon reported Phase 2a clinical trial results showing that davunetide improved memory function of schizophrenia patients and had a positive impact on the ability of these patients to carry out important activities in their daily lives.

On March 30, 2010, Allon announced top-line results from an imaging study of schizophrenia patients showing that 12 weeks of treatment with davunetide resulted in a statistically significant increase in levels of a biomarker that is an important indicator of brain cell health. Allon said statistically significant (p=0.0170) increased levels of N-acetyl aspartate (NAA) were measured using magnetic resonance spectroscopy in the brains of the schizophrenia patients treated with davunetide. The scientific literature shows that NAA is an informative biomarker because decreased levels of NAA occur in schizophrenia, and in numerous other neurodegenerative conditions such as brain injury, stroke, and Alzheimer's.

Davunetide is derived from a naturally occurring neuroprotective brain protein known as activity dependent neuroprotective protein (ADNP). Allon's laboratory and animal studies have shown that davunetide restores the function of structures in the brain - known as microtubules - which are critical to communication between brain cells and the structure of individual cells.

About Allon's neuroprotective platforms Allon's two neuroprotective technology platforms are based on two naturally occurring proteins produced by the brain in response to a range of insults. The platforms are activity-dependent neuroprotective protein (ADNP) and activity-dependent neurotrophic factor (ADNF).

Because the two platforms are based on different proteins, the drugs from each are different molecules with different therapeutic mechanisms and distinct commercial opportunities. Clinical-stage drugs based on davunetide are derived from ADNP, while preclinical stage drug AL-309 is derived from ADNF. Davunetide is focused on Alzheimer's disease, cognitive impairment in schizophrenia, and frontotemporal dementia. ADNF drug candidate AL-309 is being developed for the treatment of peripheral neuropathies and is administered orally or subcutaneously.