Founded a few years ago on a neuroprotective technology platform, Allon Therapeutics Inc. has its lead drug candidates in the clinic and is positioning itself as a player in the neurodegenerative space.

The company completed a Phase Ia trial with its first product, AL-108 for Alzheimer's disease, earlier this year in healthy volunteers and last quarter began dosing patients in a Phase I trial of its second product, AL-208, in mild cognitive impairment associated with cardiac bypass surgery.

"We've got a pretty aggressive timeline over the next 12 months," said Gordon McCauley, president and CEO of the Vancouver, British Columbia-based company. "We'll move into 2006 with a pretty full agenda."

Allon was formed by Illana Gozes, a professor of clinical biochemistry at Tel Aviv University who serves as the company's chief scientific officer. However, because it was a "challenging time for starting a company in Israel," Gozes moved Allon to North America. The company began operations in San Diego before moving its headquarters to Vancouver two years ago after merging with venture capital firm NeuroDiscovery Inc.

McCauley, who had been a partner at the VC firm, said he was impressed by the science behind the company.

"The more time we spent together, the more we came to see significant opportunities," he said. "What's really interesting about the company is that its class of compounds has shown efficacy in eight different indications" in central nervous system diseases. He added that the compounds gained credibility when further testing demonstrated their ability to cross the blood-brain barrier, showed a positive early safety profile and were effective in different methods of administration.

Allon's platform is based on the neuroprotective activity associated with vasoactive intestinal peptides (VIP), and its compounds are fragments of the activity-dependent neuroprotective protein (ADNP) and the activity-dependent neurotrophic factor. The intellectual property and compounds were exclusively licensed to Allon by Tel Aviv University and the U.S. National Institutes of Health.

Its lead products are based on different formulations of the same compound, an eight amino acid peptide that is a small active element of ADNP, which acts as a glial cell mediator of VIP-induced neuroprotection. AL-108, an intranasally administered drug designed to treat Alzheimer's disease, was found to be safe and well tolerated in a Phase Ia trial. But, rather than moving straight into Phase Ib, Allon has opted to conduct additional preclinical work.

"Since Phase I is really a platform we can use to proceed into many Phase II indications," McCauley told BioWorld Today, "we want to be careful to conduct those early trials in such a way that they will give us high safety profiles and broad therapeutic data."

In addition to Alzheimer's, AL-108 has demonstrated in several in vivo and in vitro models to be effective in treating traumatic brain injury, multiple sclerosis and neuropathies.

An intravenous formulation of the same peptide, AL-208, is expected to complete Phase I testing in 48 healthy volunteers this quarter, with results available during the first quarter. "We're also looking at an I.V. ocular formulation for a third indication," McCauley said, adding that early preclinical work has shown a positive response in retinal ganglial cells in rodents.

After determining a signal efficacy in those lead products, the company likely will look at partnership opportunities for further development and commercialization.

Other companies in the neuroprotectant space include South San Francisco-based Renovis Inc., which is in pivotal Phase III studies with Cerovive, a product aimed at reducing disability in stroke patients. Cerovive, which has free radical trapping properties, is licensed to London-based AstraZeneca plc.

Earlier in the development stage, Australian company Neuren Pharmaceuticals Ltd., of North Sydney, is preparing to begin Phase I testing with NNZ-2566, which showed in preclinical studies an ability to reduce functional defects from severe brain trauma. And San Diego-based Ambit Biosciences Corp. expects to enter the clinic with its lead product, a small-molecule neuroprotectant for the treatment of stroke and other CNS disorders in 2006.

In addition to AL-108 and AL-208, Allon has in its preclinical pipeline a nine amino acid peptide that it is being evaluated for potential oral bioavailability in neurodegenerative indications.

To date, the company has raised close to C$25 million (US$21.2 million), including a C$6.3 million private placement in August. It has about C$12 million currently in the bank, which will "get us to the fourth quarter of 2007, and get us through two of the Phase IIa trials," McCauley said. The company is operating on a burn rate of about C$500,000 per month,

"Our team has done a good job of focusing our resources on developing the compounds," he added. "Our dollars are spent 4-to-1 on research and development vs. general and administrative expenses. For our peer group, we feel that's far and away the best we've seen."

Allon has 12 full-time employees, and it also funds Gozes' lab at Tel Aviv University.

After having its shares listed on the smaller Toronto Venture Exchange, the company recently "graduated to the Toronto Stock Exchange," McCauley said. "That opens us up to a much broader group of investors, and we get more people looking at our portfolio."

Allon's shares (TSE:NPC) rose C3 cents Tuesday to close at C98 cents.