Don't Fret Over Allos Weakness: BioBuzz

Westminster, Co. (TheStreet) -- Allos Therapeutics(ALTH Quote) shares are down 4% to 5% today, despite yesterday's 10-4 vote by an FDA advisory panel to recommend approval of the company's lymphoma drug Folotyn.

That's not exactly the reaction Allos bulls were hoping for, but the panel was contentious, which surely has some folks worried that the FDA won't follow through with an approval on Sept. 24. I don't happen to share that belief. Has the FDA, in recent times, gone against the recommendation of a cancer drug advisory panel? I don't think so. Some might say Dendreon(DNDN Quote) fits that description, but Provenge was reviewed by a different committee and division of the FDA.

After that, the chatter I hear today is that Allos was priced for perfection going into yesterday's meeting -- i.e. Allos is already fairly valued; the contentious nature of the advisory panel will dampen doctor's enthusiasm for Folotyn; the commercial market for peripheral T-cell lymphoma (PTCL) is tiny; Allos will face competition soon, perhaps from privately held Gloucester Pharmaceuticals, which also had a lymphoma drug recommended for approval yesterday.

Once Folotyn is approved, no doctor will remember, or care, that some cancer expert on a panel argued that the drug didn't work so well (especially since that was the losing argument). Patients with PTCL who have nothing else to treat their disease are certainly not going to care.

Folotyn is going to be approved, and when it does, it will be used. Sales in the U.S. could top $250 million to $300 million. Upside comes from PTCL sales in Europe and Asia as well as the potential for future use in other cancer types.

Let's not forget that Folotyn is an un-partnered cancer drug asset well on its way to approval. That's a rare and in-demand commodity these days.

Osiris Tanks on Data Leak?

(At 12:38 PM EDT)

Updated with new information from Osiris about Prochymal

Osiris Therapeutics(OSIR Quote) is tanking this afternoon, down roughly 19% on no apparent news, although this has the look and feel of a negative data leak.

The company is expected to release results from two phase III studies of its mesenchymal stem cell drug Prochymal in patients with graft-versus-host disease. Guidance from Osiris was for data in early September and a lot of investors took that to mean this week. The company is also reportedly holding a board meeting this week.

Full disclosure: I was short Osiris in the model portfolio of my now-defunct investment newsletter because I felt that the Prochymal studies would fail. You can find my Osiris stories here.

Update: Osiris CEO Randy Mills is reportedly telling sell-side analysts that the company doesn't have the Prochymal data and the contract research organization (CRO) in charge of running the studies is still cleaning up the database.

But previously, Mills all but promised analysts that the final data would be ready this week, which means the CRO would have been finished with their work last week.