Allon Therapeutics announces completion of $10 million private placement

VANCOUVER, May 2, 2012 /PRNewswire/ - Allon Therapeutics Inc. (TSX: NPC) announced today that it has completed the previously announced brokered private placement equity offering resulting in gross proceeds of $10 million as more particularly described below.

Gordon McCauley, President and CEO of Allon Therapeutics said Allon remains on track to complete patient dosing in its pivotal trial in progressive supranuclear palsy (PSP) and release top-line data by late 2012.

"We have secured the financial resources needed for our pivotal trial in PSP as we advance lead product candidate davunetide towards commercialization," McCauley said.  "PSP is a devastating neurodegenerative disease with no approved treatments and a market potential in excess of $700 million in the U.S. and Europe."

"We are pleased to have added a number of new institutional investors from both the U.S. and Europe in addition to the significant support from our existing shareholders" added McCauley.

Allon sold 15,612,500 equity units and 24,387,500 subscription receipts convertible upon shareholders approval into Units on a one-for-one basis, both priced at $0.25 each for a total of 40,000,000 units.  Each unit consists of one common share and one half of one common share purchase warrant. Each share purchase warrant will entitle the holder to acquire one common share at a price of $0.40 for a period of 60 months from the closing date of the offering. The Company will seek approval for conversion of the subscription receipts at its June 13 annual meeting. The funds for the subscription receipts have been advanced into escrow pending the shareholders meeting. Neuro Discovery II Limited Partnership subscribed for 19,987,500 subscription receipts and 1,990,000 Units the proceeds of which were paid as to $2.5 million by cancellation of a previously issued convertible debenture and the balance in cash.

Bloom Burton & Co., a healthcare-specialized investment banking group based in Canada, acted as the placement agent for this offering and will receive cash commission and 1,176,906 agent's warrants exercisable @ $0.25 into Common Shares as consideration for placing a portion of the securities.

About Allon
Allon Therapeutics Inc. is a clinical-stage biotechnology company focused on bringing to market innovative central nervous system therapies. Allon's lead drug davunetide is proceeding in a pivotal clinical trial in an orphan indication, in progressive supranuclear palsy (PSP), under a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA). The trial is fully enrolled and is expected to complete patient dosing and release top-line data by late 2012. This pivotal trial is based upon statistically significant human efficacy demonstrated in patients with amnestic mild cognitive impairment (a precursor to Alzheimer's disease), cognitive impairment associated with schizophrenia, and in positive biomarker data.

The Company is listed on the Toronto Stock Exchange under the trading symbol "NPC".

Forward Looking Statements
Statements contained herein, other than those which are strictly statements of historical fact may include forward-looking information. Such statements will typically contain words such as "believes", "may", "plans", "will", "estimate", "continue", "anticipates", "intends", "expects", and similar expressions. While forward-looking statements represent management's outlook based on assumptions that management believes are reasonable, forward-looking statements by their nature are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by them. Such factors include, among others, the inherent uncertainty involved in scientific research and drug development, Allon's early stage of development, lack of product revenues, its additional capital requirements, the risks associated with successful completion of clinical trials and the long lead-times and high costs associated with obtaining regulatory approval to market any product which Allon may eventually develop. Other risk factors include the limited protections afforded by intellectual property rights, rapid technology and product obsolescence in a highly competitive environment and Allon's dependence on collaborative partners and contract research organizations. These factors can be reviewed in Allon's public filings at www.sedar.com and should be considered carefully. Readers are cautioned not to place undue reliance on such forward-looking statements. Similarly, nothing in this press release is meant to promote a pharmaceutical product or make a regulated claim of efficacy.

Rick Smith
Allon Therapeutics Inc.
Director, Investor Relations
(604) 742-2543
[email protected]
www.allontherapeutics.com

SOURCE Allon Therapeutics Inc.

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