Shares of Allos Therapeutics Inc. tumbled Monday following news of a deal that could boost sales of a rival cancer drug that competes with Allos' Folotyn.
Folotyn is an injectable treatment for peripheral T-cell lymphoma, a rare and aggressive type of lymphatic cancer. It has been on the market for about two months. On Monday, biotechnology company Celgene Corp. said it would buy Gloucester Pharmaceuticals, a smaller company that makes a lymphatic cancer drug called Istodax.
In midday trading, shares of Westminster, Colo.-based Allos dropped 96 cents, or 14.5 percent, to $5.66.
Analyst Joshua Schimmer of Leerink Swann & Co. said the purchase of Gloucester Pharmaceuticals "introduces a deeper-pocket competitor into the field and makes Istodax a more viable threat." He added that Celgene may have chosen to buy Gloucester instead of Allos.
Istodax is on the market as a treatment for cutaneous T-cell lymphoma, which is rarer than the peripheral variety. Istodax is only approved for patients who have tried at least one other therapy, but Gloucester is seeking other approvals.