# **UNITED STATESSECURITIES AND EXCHANGE COMMISION**

**Washington, D.C. 20549**

 

# **FORM 10-Q**

 
| **ý** |   | **Quarterly  report pursuant to Section 13 or 15(d) of the Securities Exchange Act of  1934.**                                                                                                                                                        |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                  |
|       |   | **For the quarterly period ended June 30, 2003**                                                                                                                                                                                                      |
|       |   |                                                                                                                                                                                                                                                  |
| **o**      |   | **Transition  report pursuant to Section 13 or 15(d) of the Securities Exchange Act of  1934.**                                                                                                                                                       |
|       |   |                                                                                                                                                                                                                                                  |
|       |   | **For the transition period from                   to                   .** |

 

**Commission File Number**

**000-29815**

 

**AllosTherapeutics, Inc.**

(Exact name of Registrant as specified in its charter)

 
| **Delaware**                                                                                              |   | **54-1655029**                        |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
| (State or other jurisdiction of  incorporation or organization)                                           |   | (I.R.S. Employer  Identification No.) |
|                                                                                                      |   |                                  |
| **11080 CirclePoint Road, Suite 200  Westminster, Colorado  80020  (303) 426-6262**                  |
| (Address, including zip code, and telephone number,  including area code, of principal executive offices) |

 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

Yes   ý          No   o

 

Check whether the registrantis an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.

 

Yes   ý          No   o

 

As of August 6, 2003 therewere 25,910,092 shares of the Registrant’s Common Stock outstanding, par value$0.001 per share.

 

This quarterly report on Form 10-Q consists of 19 pages.

 

 

----

 

**ALLOSTHERAPEUTICS, INC.**

**FORM 10-Q**

 

**INDEX**

 
| PART I. Financial  Information |
|--------------------------------|
|                           |   |
| ITEM 1.                        | Financial Statements |
|                           |   |
|                           | Balance Sheets  (unaudited) — as of December 31, 2002 and June 30, 2003 |
|                           |   |
|                           | Statements of Operations  (unaudited) — for the three and six months ended June 30, 2002 and 2003 and  the cumulative period from September 1, 1992 (date of inception) through June  30, 2003 |
|                           |   |
|                           | Statements of Cash Flows  (unaudited) — for the six months ended June 30, 2002 and 2003 and the  cumulative period from September 1, 1992 (date of inception) through June 30,  2003 |
|                           |   |
|                           | Notes to Financial  Statements (unaudited) |
|                           |   |
| ITEM  2.                       | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |
|                           |   |
| ITEM  3.                       | Quantitative  and Qualitative Disclosures About Market Risk |
|                           |   |
| ITEM 4.                        | Controls and  Procedures |
|                           |   |
| PART II. Other Information     |
|                           |   |
| ITEM  1.                       | Legal Proceedings |
|                           |   |
| ITEM  2.                       | Changes in Securities and Use of  Proceeds |
|                           |   |
| ITEM  3.                       | Defaults Upon Senior Securities |
|                           |   |
| ITEM  4.                       | Submission of Matters to a Vote  of Security Holders |
|                           |   |
| ITEM  5.                       | Other Information |
|                           |   |
| ITEM  6.                       | Exhibits and Reports on Form 8-K |
|                           |   |
| SIGNATURES                     |

 

2

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**PART I.  FINANCIAL INFORMATION**

 

#### **ITEM1.  FINANCIAL STATEMENTS**

 

**ALLOSTHERAPEUTICS, INC.**

**BALANCE SHEETS**

**(unaudited)**

** **
|                                                                                                                                                                                                                 |   | **December 31,   2002** |       | **June 30,   2003** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|---------------------|------------|
|                                                                                                                                                                                                                 |   |                    | ** ** |                | ** ** |
| **ASSETS**                                                                                                                                                                                                           |   |                    | ** ** |                | ** ** |
|                                                                                                                                                                                                                 |   |                    |       |                |       |
| Current assets:                                                                                                                                                                                                      |   |                    |       |                |       |
| Cash and cash equivalents                                                                                                                                                                                            |   | $                       | 3,756,951  |                | $          | 10,522,097 |   |
| Restricted cash                                                                                                                                                                                                      |   | 550,000                 |       | 550,000             |       |
| Short-term investments                                                                                                                                                                                               |   | 50,676,010              |       | 31,734,940          |       |
| Prepaid research and  development expenses                                                                                                                                                                           |   | 534,287                 |       | 310,255             |       |
| Prepaids and other assets                                                                                                                                                                                            |   | 240,789                 |       | 923,038             |       |
| Total current assets                                                                                                                                                                                                 |   | 55,758,037              |       | 44,040,330          |       |
| Long-term marketable  securities                                                                                                                                                                                     |   | 5,816,529               |       | 706,190             |       |
| Property and equipment, net                                                                                                                                                                                          |   | 1,826,277               |       | 1,734,275           |       |
| Long-term investment                                                                                                                                                                                                 |   | 1,000,000               |       | 1,000,000           |       |
| Total assets                                                                                                                                                                                                         |   | $                       | 64,400,843 |                | $          | 47,480,795 |   |
|                                                                                                                                                                                                                 |   |                    |       |                |       |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                       |   |                    | ** ** |                | ** ** |
|                                                                                                                                                                                                                 |   |                    | ** ** |                | ** ** |
| Current liabilities:                                                                                                                                                                                                 |   |                    |       |                |       |
| Accounts payable — related  parties                                                                                                                                                                             |   | $                       | 111,656    |                | $          | 137,710 |   |
| Trade accounts payable and  accrued expenses                                                                                                                                                                         |   | 408,879                 |       | 433,807             |       |
| Accrued research and  development expenses                                                                                                                                                                           |   | 5,117,400               |       | 7,318,945           |       |
| Accrued bonus and employee  benefits                                                                                                                                                                                 |   | 1,440,725               |       | 898,205             |       |
| Restructuring costs                                                                                                                                                                                                  |   | —                  |       | 431,703             |       |
| Total current liabilities                                                                                                                                                                                            |   | 7,078,660               |       | 9,220,370           |       |
|                                                                                                                                                                                                                 |   |                    |       |                |       |
| Commitments and  contingencies                                                                                                                                                                                       |   |                    |       |                |       |
|                                                                                                                                                                                                                 |   |                    |       |                |       |
| Stockholders’ equity:                                                                                                                                                                                           |   |                    |       |                |       |
| Preferred stock, $0.001 par value; 10,000,000  shares authorized at December 31, 2002 and June 30, 2003; no shares issued or  outstanding                                                                            |   | —                  |       | —              |       |
| Series A Junior Participating Preferred Stock,  $.001 par value; 1,000,000 shares authorized at June 30, 2003; no shares  issued or outstanding                                                                      |   | —                  |       | —              |       |
| Common stock, $0.001 par value; 75,000,000 shares  authorized at December 31, 2002 and June 30, 2003; 25,863,454 and 25,910,092  shares issued and outstanding at December 31, 2002 and June 30, 2003,  respectively |   | 25,863                  |       | 25,910              |       |
| Additional paid-in capital                                                                                                                                                                                           |   | 171,020,705             |       | 170,257,115         |       |
| Deferred compensation  related to grant of options                                                                                                                                                                   |   | (1,101,466              | )          | (495,552            | )          |
| Accumulated deficit                                                                                                                                                                                                  |   | (112,622,919            | )          | (131,527,048        | )          |
| Total stockholders’ equity                                                                                                                                                                                      |   | 57,322,183              |       | 38,260,425          |       |
| Total liabilities and  stockholders’ equity                                                                                                                                                                     |   | $                       | 64,400,843 |                | $          | 47,480,795 |   |

 

The accompanying notes are an integral part ofthese financial statements.

 

3

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**ALLOS THERAPEUTICS, INC.**

**STATEMENTS OF OPERATIONS**

**(unaudited)**

** **
|                                                                 |   | **Three  Months Ended   June 30,** |       | **Six Months  Ended   June 30,** |   | **Cumulative    Period from  September 1, 1992  (date of inception)  through June 30,** |   |
|----------------------------------------------------------------------|--------|------------------------------------|------------|----------------------------------|--------|-----------------------------------------------------------------------------------------|--------|
|                                                                 |   | **2002**                           |       | **2003**                         |   | **2002**                                                                                |   | **2003** |   | **2003** |   |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Operating expenses:                                                  |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Research and development                                             |   | $                                  | 4,289,787  |                             | $      | 5,081,232                                                                               |   | $ | 8,228,674 |   | $ | 8,486,804 |   | $ | 68,688,821 |   |
| Clinical manufacturing                                               |   | 726,115                            |       | 3,865,872                        |   | 1,171,279                                                                               |   | 5,946,079 |   | 21,230,713 |   |
| Marketing, general and administrative                                |   | 2,537,046                          |       | 2,522,994                        |   | 5,225,065                                                                               |   | 4,542,248 |   | 45,208,922 |   |
| Restructuring costs                                                  |   | —                             |       | 577,665                          |   | —                                                                                  |   | 577,665 |   | 577,665 |   |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Total operating expenses                                             |   | 7,552,948                          |       | 12,047,763                       |   | 14,625,018                                                                              |   | 19,552,796 |   | 135,706,121 |   |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Loss from operations                                                 |   | (7,552,948                         | )          | (12,047,763                      | )      | (14,625,018                                                                             | )      | (19,552,796 | ) | (135,706,121 | ) |
| Interest and other income, net                                       |   | 674,890                            |       | 276,983                          |   | 1,286,832                                                                               |   | 648,667 |   | 13,792,048 |   |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Net loss                                                             |   | (6,878,058                         | )          | (11,770,780                      | )      | (13,338,186                                                                             | )      | (18,904,129 | ) | (121,914,073 | ) |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Dividend related to beneficial conversion feature of preferred stock |   | —                             |       | —                           |   | —                                                                                  |   | — |   | (9,612,975 | ) |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Net loss attributable to common stockholders                         |   | $                                  | (6,878,058 | )                                | $      | (11,770,780                                                                             | )      | $ | (13,338,186 | ) | $ | (18,904,129 | ) | $ | (131,527,048 | ) |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Net loss per common share:                                           |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Basic and diluted                                                    |   | $                                  | (0.27      | )                                | $      | (0.45                                                                                   | )      | $ | (0.55 | ) | $ | (0.73 | ) |   |   |
|                                                                 |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Weighted average common shares:                                      |   |                               |       |                             |   |                                                                                    |   |   |   |   |   |
| Basic and diluted                                                    |   | 25,040,790                         |       | 25,888,500                       |   | 24,090,559                                                                              |   | 25,884,381 |   |   |   |

 

The accompanying notes are an integral part of these financialstatements.

 

4

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**ALLOS THERAPEUTICS, INC.**

**STATEMENTS OF CASH FLOWS**

**(unaudited)**

 
|                                                                                                    |   | **Six Months  Ended   June 30,** |        | **Cumulative  Period  From September 1,   1992 (date of  inception) through    June 30,** |   |
|---------------------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|------------------------------------------------------------------------------------------------|--------|
|                                                                                                    |   | **2002**                         |        | **2003**                                                                                       |   | **2003** |   |
| **Cash Flows From Operating Activities:**                                                               |   |                             |        |                                                                                           |   |   |   |
| Net loss                                                                                                |   | $                                | (13,338,186 | )                                                                                              | $      | (18,904,129 | ) | $ | (121,914,073 | ) |
| Adjustments to reconcile net loss to net cash used  in operating activities:                            |   |                             |        |                                                                                           |   |   |   |
| Depreciation and amortization                                                                           |   | 217,890                          |        | 304,594                                                                                        |   | 1,545,761 |   |
| Stock-based compensation                                                                                |   | 1,109,042                        |        | (264,172                                                                                       | )      | 21,314,028 |   |
| Other                                                                                                   |   | —                           |        | —                                                                                         |   | 104,655 |   |
| Changes in operating assets and liabilities:                                                            |   |                             |        |                                                                                           |   |   |   |
| Prepaids and other assets                                                                               |   | (488,324                         | )           | (458,217                                                                                       | )      | (1,233,294 | ) |
| Interest receivable on investments                                                                      |   | 384,442                          |        | 314,845                                                                                        |   | (484,319 | ) |
| Accounts payable – related parties                                                                 |   | 24,150                           |        | 26,054                                                                                         |   | 3,495,975 |   |
| Trade accounts payable and accrued expenses                                                             |   | (73,735                          | )           | 24,928                                                                                         |   | 433,807 |   |
| Accrued research and development expenses                                                               |   | 2,832,437                        |        | 2,201,545                                                                                      |   | 3,960,681 |   |
| Accrued compensation and restructuring costs                                                            |   | (88,609                          | )           | (110,817                                                                                       | )      | 1,329,908 |   |
| Net cash used in operating activities                                                                   |   | (9,420,893                       | )           | (16,865,369                                                                                    | )      | (91,446,871 | ) |
|                                                                                                    |   |                             |        |                                                                                           |   |   |   |
| **Cash Flows From Investing  Activities:**                                                              |   |                             |        |                                                                                           |   |   |   |
| Acquisition of property and equipment                                                                   |   | (299,496                         | )           | (212,592                                                                                       | )      | (3,021,564 | ) |
| Purchases of marketable securities                                                                      |   | (30,744,953                      | )           | (11,504,796                                                                                    | )      | (249,459,663 | ) |
| Proceeds from sales of marketable securities                                                            |   | 27,807,500                       |        | 35,241,360                                                                                     |   | 217,502,852 |   |
| Purchase of long-term investment                                                                        |   | (1,000,000                       | )           | —                                                                                         |   | (1,000,000 | ) |
| Payments received on notes receivable                                                                   |   | —                           |        | —                                                                                         |   | 49,687 |   |
| Net cash provided by (used in) investing  activities                                                    |   | (4,236,949                       | )           | 23,523,972                                                                                     |   | (35,928,688 | ) |
|                                                                                                    |   |                             |        |                                                                                           |   |   |   |
| **Cash Flows From Financing  Activities:**                                                              |   |                             |        |                                                                                           |   |   |   |
| Principal payments under capital leases                                                                 |   | —                           |        | —                                                                                         |   | (422,088 | ) |
| Proceeds from sale leaseback                                                                            |   | —                           |        | —                                                                                         |   | 120,492 |   |
| Pledging restricted cash                                                                                |   | —                           |        | —                                                                                         |   | (550,000 | ) |
| Proceeds from issuance of convertible preferred  stock, net of issuance costs                           |   | —                           |        | —                                                                                         |   | 40,285,809 |   |
| Proceeds from issuance of common stock, associated  with stock options and employee stock purchase plan |   | 145,449                          |        | 106,543                                                                                        |   | 762,274 |   |
| Proceeds from issuance of common stock, net of  issuance costs                                          |   | 14,933,953                       |        | —                                                                                         |   | 97,701,169 |   |
| Net cash provided by financing activities                                                               |   | 15,079,402                       |        | 106,543                                                                                        |   | 137,897,656 |   |
|                                                                                                    |   |                             |        |                                                                                           |   |   |   |
| Net increase (decrease) in cash and cash  equivalents                                                   |   | 1,421,560                        |        | 6,765,146                                                                                      |   | 10,522,097 |   |
| Cash and cash equivalents, beginning of period                                                          |   | 2,745,151                        |        | 3,756,951                                                                                      |   | — |   |
|                                                                                                    |   |                             |        |                                                                                           |   |   |   |
| Cash and cash equivalents, end of period                                                                |   | $                                | 4,166,711   |                                                                                           | $      | 10,522,097 |   | $ | 10,522,097 |   |
|                                                                                                    |   |                             |        |                                                                                           |   |   |   |
| **Supplemental Schedule of Noncash Operating****and  Financing Activities:**                            |   |                             |        |                                                                                           |   |   |   |
| Cash paid for interest                                                                                  |   | 249,953                          |        | —                                                                                         |   | 1,033,375 |   |
| Issuance of stock in exchange for license  agreement                                                    |   | —                           |        | —                                                                                         |   | 40,000 |   |
| Capital lease obligations incurred for acquisition  of property and equipment                           |   | —                           |        | —                                                                                         |   | 422,088 |   |
| Issuance of stock in exchange for notes receivable                                                      |   | —                           |        | —                                                                                         |   | 139,687 |   |

 

The accompanying notes are an integral part of these financialstatements.

 

5

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**ALLOS THERAPEUTICS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**(unaudited)**

 

**1.****                                     ****Basis of Presentation**

 

The unaudited financialstatements of Allos Therapeutics, Inc. a company in the development stage(referred to herein as the “Company,” “we,” “us” or “our”), included hereinreflect all adjustments, consisting only of normal recurring adjustments, whichin the opinion of management are necessary to fairly present the financialposition, results of operations and cash flows of the Company for the periodspresented.  Certain information andfootnote disclosures normally included in audited financial information preparedin accordance with accounting principles generally accepted in the UnitedStates of America have been condensed or omitted pursuant to the Securities andExchange Commission’s rules and regulations. The results of operations for the period ended June 30, 2003 are notnecessarily indicative of the results to be expected for any subsequent quarteror for the entire fiscal year ending December 31, 2003.  These financial statements should be read inconjunction with the financial statements and notes thereto which are includedin our Annual Report on Form 10-K for the year ended December 31, 2002 for abroader discussion of our business and the opportunities and risks inherent insuch business.

 

On April 23, 2003, weannounced the preliminary results of our pivotal Phase 3 trial of RSR13 inpatients with brain metastases.   Theresults did not meet the primary statistical endpoint of the study in either ofthe pre-specified intent-to-treat groups using a primary unadjusted log-rankanalysis of patients who received RSR13 plus whole brain radiation therapy(WBRT) versus patients who received WBRT alone.  However, the results demonstrated a survival benefit from RSR13treatment for patients with metastatic breast cancer.  For patients with metastatic breast cancer who received RSR13,median survival was nearly doubled compared with patients who did not receiveRSR13.

 

Webelieve that our existing cash, cash equivalents and investments will beadequate to satisfy our capital needs through 2004.  However, our ability to continue developing RSR13 and PDX willrequire substantial additional capital beyond 2004.  We intend to raise additional capital in the futurethrough arrangements with corporate partners, or through equity or debtfinancings.  Such arrangements may bedilutive to existing stockholders.  Inaddition, if additional funds are obtained through arrangements withcollaborative partners or other sources, such arrangements may require us torelinquish rights to some of our technologies, product candidates or productsunder development that we would otherwise seek to develop or commercializeourselves.  There is no assurance thatwe will be successful in consummating any such arrangements.  In the event we are not able to raisesufficient additional funds, we may be required to delay, scale back, oreliminate one or more of our product development programs.

 

**2.****                                     ****Accrued Research andDevelopment Expenses**

 

We record accruals forcontracted third-party development activity, including estimated clinical studycosts, which will be invoiced to us in a subsequent accounting period. Clinicalstudy costs represent costs incurred by clinical research organizations andclinical sites. These costs are recorded as a component of research anddevelopment expenses. Management accrues costs for these clinical studies basedon the progress of the clinical trials, including patient enrollment, dosinglevels of patients enrolled, estimated costs to dose patients, invoicesreceived and contracted costs when evaluating the adequacy of the accruedliabilities. Significant judgments and estimates are made and used indetermining the accrued balance in any accounting period. Actual results coulddiffer from those estimates.

 

**3.****                                     ****Stock-Based Compensation**

 

We have recorded stock-basedcompensation expense resulting primarily from certain options granted prior toour initial public offering with exercise prices below the fair market value ofour common stock on their respective grant dates.

 

InDecember 2002, the Financial Accounting Standards Board (“FASB”) issuedStatement No. 148, *Accounting forStock-Based Compensation — Transition and Disclosure*. Statement ofFinancial Accounting Standards (“SFAS”) SFAS 148 amends SFAS 123 to providealternative methods of transition for a voluntary change to the fair valuebased method of accounting for stock-based employee compensation. In addition,SFAS 148 amends the disclosure requirements of SFAS 123 to require moreprominent disclosures in both annual and interim financial statements about themethod of accounting for stock-based employee compensation and the effect ofthe method used on reported results. The additional disclosure requirements ofSFAS 148 are effective for fiscal years ending after December 15, 2002. We haveelected to continue to follow the intrinsic value method of accounting asprescribed by Accounting Principles Board Opinion No. 25 (“APB 25”), *Accounting for Stock Issued to Employees*,to account for employee stock options.

 

6

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The following tableillustrates the effect on net loss and loss per share if we had applied thefair value recognition provisions of SFAS 123 to stock-based compensation forthe six month periods ended June 30, 2002 and 2003.  Such pro forma disclosures may not be representative of the proforma effect in future periods because options vest over several years andadditional grants may be made each year.

 
|                                                                                      |   | **Three  Months Ended   June 30,** |       | **Six Months  Ended   June 30,** |   |
|-------------------------------------------------------------------------------------------|--------|------------------------------------|------------|----------------------------------|--------|
|                                                                                      |   | **2002**                           |       | **2003**                         |   | **2002** |   | **2003** |   |
|                                                                                      |   |                               |       |                             |   |   |   |   |   |
| Net loss – as reported                                                               |   | $                                  | (6,878,058 | )                                | $      | (11,770,780 | ) | $ | (13,338,186 | ) | $ | (18,904,129 | ) |
| Add: Stock-based compensation expense included in reported net loss                       |   | 479,077                            |       | 101,207                          |   | 1,109,042 |   | 498,023 |   |
|                                                                                      |   |                               |       |                             |   |   |   |   |   |
| Deduct: Recovery of stock-based compensation expense                                      |   | —                             |       | —                           |   | — |   | (762,195 | ) |
|                                                                                      |   |                               |       |                             |   |   |   |   |   |
| Deduct: Stock-based compensation expense as determined under the fair  value based method |   | (1,032,821                         | )          | (1,544,294                       | )      | (1,892,339 | ) | (2,241,932 | ) |
| Pro forma net loss                                                                        |   | $                                  | (7,431,802 | )                                | $      | (13,213,867 | ) | $ | (14,121,483 | ) | $ | (21,410,233 | ) |
|                                                                                      |   |                               |       |                             |   |   |   |   |   |
| Loss per share:                                                                           |   |                               |       |                             |   |   |   |   |   |
| Basic and diluted – as reported                                                      |   | $                                  | (0.27      | )                                | $      | (0.45 | ) | $ | (0.55 | ) | $ | (0.73 | ) |
| Basic and diluted – pro forma                                                        |   | $                                  | (0.30      | )                                | $      | (0.51 | ) | $ | (0.59 | ) | $ | (0.83 | ) |

 

Effective February 28, 2003(“new measurement date”), the employment status of our Chairman changed fromemployee to consultant.  As a result ofthe change in status, unvested options held by the Chairman on the newmeasurement date are prospectively accounted for under variable accounting asprescribed by SFAS 123.  Effective onthe new measurement date, we reversed approximately $762,000 in stock-basedcompensation expense recorded in prior periods related to such unvestedoptions.  For the six months ended June30, 2003, we recorded approximately $223,000 in stock-based compensationexpense related to variable accounting treatment for the stock optionspreviously granted to the Chairman while he was an employee of the Company.

 

**4.****                                     ****Net Loss Per Common Share**

 

Basic net loss per commonshare is computed using the weighted average number of common sharesoutstanding during the period.  Dilutednet loss per common share is computed using the weighted average number ofcommon and potential common shares outstanding during the period.  Potential common shares consist of stockoptions and warrants and have been excluded from the computation of diluted netloss per common share because their effect was anti-dilutive.

 

**5.****                                     ****Contingencies**

 

In 2002, we signed two purchase orders to purchaseapproximately $8.0 million of commercial grade bulk drug material to bedelivered in 2004.  In April 2003, weelected to cancel these purchase orders and as a result we paid and recorded atermination fee of $3.0 million included in clinical manufacturing expense inthe Statement of Operations.

 

**6.****                                     ****Stockholders’ Equity**

 

In May 2003, we designated1,000,000 shares of our authorized preferred stock as Series A JuniorParticipating Preferred Stock, par value $0.001 per share, pursuant to aStockholder Rights Plan approved by the Board of Directors under which allstockholders of record as of May 28, 2003 received a dividend distribution ofone preferred share purchase right (a “Right”) for each outstanding share ofour common stock. The Rights trade with the common stock and no separate Rightcertificates will be distributed until such time as the Rights becomeexercisable in accordance with the Stockholder Rights Plan. The StockholderRights Plan is intended as a means to guard against abusive takeover tacticsand to provide for fair and equal treatment for all stockholders in the eventthat an unsolicited attempt is made to acquire the Company.

 

Until the Rights becomeexercisable, the Rights will have no dilutive impact on our earnings per sharedata. The Rights are protected by customary anti-dilution provisions.  As of June 30, 2003, no shares of Series AJunior Participating Preferred Stock were issued or outstanding.

 

7

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**7.****                                     ****Restructuring Costs**

 

On May 28, 2003, as part ofthe revised operating plan, we implemented expense reduction measures,including a reduction in workforce by approximately 30 percent, in an effort toconserve sufficient resources to operate our business under a revised operatingplan through 2004.  We recorded arestructuring charge in the second quarter of 2003 consisting primarily ofseverance, payroll taxes and employee benefits totaling $578,000; $216,000 inresearch and development; $47,000 in clinical manufacturing; and $315,000 inmarketing, general and administrative. We expect to realize cost savings going forward as a result of theseexpense reduction measures and other cost saving initiatives that have beenimplemented.  We believe restructuringis substantially complete with these actions. The nature of the restructuring charges and the amounts paid through andaccrued as of June 30, 2003 are summarized as follows:

 
|                                                 |   | **Total** |    | **Paid** |   | **Accrued** |   |
|------------------------------------------------------|--------|-----------|---------|----------|--------|-------------|--------|
|                                                 |   |      |    |     |   |        |   |
| Severance, payroll taxes and other employee benefits |   | $         | 573,592 |     | $      | 141,889     |   | $ | 431,703 |   |
| Legal                                                |   | 4,073     |    | 4,073    |   | —      |   |
| Total                                                |   | $         | 577,665 |     | $      | 145,962     |   | $ | 431,703 |   |

 

**8.****                                     ****Recently Issued Accounting Pronouncements**

 

InJanuary 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), *Consolidation of Variable Interest Entities*.  FIN 46 addresses consolidation by businessenterprises of variable interest entities, which have certaincharacteristics.  FIN 46 appliesimmediately to variable interest entities created after January 31, 2003,and to variable interest entities in which an enterprise obtains an interestafter that date.  It applies in thefirst fiscal year or interim period beginning after June 15, 2003, tovariable interest entities in which an enterprise holds a variable interestthat it acquired before February 1, 2003. The adoption of FIN 46 has not had, nor do we believe it will have, amaterial impact on our current or prospective financial statements.

 

In the May 2003, the FASBissued Statement No. 150 (“SFAS 150”), *Accountingfor Certain Financial Instruments with Characteristics of Both Liabilities andEquity*.  The Statementaddresses the classification of certain financial instruments embodyingobligations that could be settled by the issuance of an entity’s ownshares.  SFAS 150 improves theaccounting for certain financial instruments that, under previous guidance,issuers could account for as equity and requires that those instruments beclassified as liabilities (or assets in certain circumstances) in statements offinancial position.   SFAS 150 isgenerally effective for all financial instruments entered into or modifiedafter May 31, 2003, and otherwise is effective at the beginning of the firstinterim period beginning after June 15, 2003. The adoption of SFAS No. 150 is not expected to have a material effecton our financial statements.

 

8

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**ITEM 2.  MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*The following Management’s Discussion and Analysis ofFinancial Condition and Results of Operations, as well as information containedelsewhere in this report, contains statements that constitute “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, asamended.  You can identify thesestatements by forward-looking words such as “may,” “will,” “expect,” “intend,”“anticipate,” “believe,” “estimate,” “plan,” “could,” “should” and “continue”or similar words.  Actual results coulddiffer materially from those anticipated in these forward-lookingstatements.  Factors that could cause orcontribute to such differences include, but are not limited to, those mentionedin the discussion below and those described in the “Risk Factors” discussion ofour Annual Report on Form 10-K for the year ended December 31, 2002 filed withthe Securities and Exchange Commission. As a result, you should not place unduereliance on these forward-looking statements. We do not intend to update or revise these forward-looking statements toreflect future events or developments.*

 

**Overview**

 

AllosTherapeutics, Inc. is a biopharmaceutical company focused on developing andcommercializing innovative drugs for improving cancer treatments.

 

Our lead productcandidate is RSR13 (efaproxiral), a synthetic small molecule that has thepotential to sensitize hypoxic (oxygen deprived) tumor tissues and enhance theefficacy of standard radiation therapy, and certain chemotherapeutic drugs.RSR13 recently completed a Phase 3 clinical trial, discussed in more detailbelow.  In addition, we are developingPDX, a novel small molecule cytotoxic injectable antifolate (DHFR inhibitor)being developed for the treatment of non-small cell lung cancer (NSCLC),mesothelioma and non-Hodgkin’s lymphoma.

 

On April 23, 2003, weannounced the preliminary results of our pivotal Phase 3 trial of RSR13 inpatients with brain metastases.   Theresults did not meet the primary statistical endpoint of the study in either ofthe pre-specified intent-to-treat groups using a primary unadjusted log-rankanalysis of patients who received RSR13 plus whole brain radiation therapy(WBRT) versus patients who received WBRT alone.   However, the results demonstrated a survival benefit from RSR13treatment for patients with metastatic breast cancer.  For patients with metastatic breast cancer who received RSR13,median survival was nearly doubled compared with patients who did not receiveRSR13.  While patients with metastaticbreast cancer represent a subset that was not prospectively defined as anintent-to-treat subgroup, breast cancer was a pre-specified stratificationfactor and the results were statistically significant.  Overall, these patients with metastaticbreast cancer experienced a 55 percent reduction in risk of death in the RSR13arm versus control.

 

On May 29, 2003, weannounced our plan to submit a New Drug Application (NDA) to the U.S. Food andDrug Administration (FDA) to market RSR13 as an adjuvant to radiation therapyfor the treatment of brain metastases from breast cancer.  Our decision followed a pre-NDA meeting withthe FDA in which we reviewed the preliminary safety and efficacy data from thecompleted Phase 3 clinical trial and, specifically, the results in patientswith metastatic breast cancer.  The NDAsubmission has commenced, and we expect to complete the application in thefourth quarter of 2003.

 

On May 29, 2003, weannounced our updated operating plan, which is intended to enable the Companyto complete the rolling submission of the NDA to the FDA for RSR13 in patientswith brain metastases from breast cancer and maintain the current timeline forthe development of PDX.  As part of therevised operating plan, we implemented expense reduction measures, including areduction in workforce, in an effort to conserve sufficient resources tooperate our business under the revised operating plan through 2004.

 

The updated operatingplan effects a modification of our clinical development priorities.  We will focus our clinical developmentresources on RSR13 and PDX.  Thedevelopment of BGP-15 has been be suspended. The ongoing Phase 1 / 2 trials of RSR13 in patients with cervical cancerand recurrent glioblastoma will be maintained. However, we have suspended screening of patients in the Phase 3 trial ofRSR13 in primary NSCLC and have formally notified sites that the trial has beenterminated.

 

The PDX developmentprogram will continue unchanged for 2003. We will continue to sponsor ongoing Phase 1 dose-escalation studies ofPDX being conducted at Memorial Sloan-Kettering Cancer Center in patients withnon-Hodgkin’s lymphoma and in patients with NSCLC in combination withdocetaxel.  We plan to initiate amulti-center Phase 2 study of PDX in patients with NSCLC in early 2004.

 

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We have incurred significantoperating losses since our inception. As of June 30, 2003, our accumulated deficit was $131.5 million. We havedevoted substantially all of our resources to date to the clinical developmentof RSR13.  We anticipate incurring netlosses over at least the next several years as we continue our clinical trials,apply for regulatory approvals, develop our technology, and develop systemsthat support commercialization of our product candidates, if necessary.

 

**CriticalAccounting Policies**

 

Our discussion andanalysis of our financial condition and results of operations are based uponour financial statements, which have been prepared in accordance withaccounting principles generally accepted in the United States of America.  The preparation of these financialstatements requires us to make estimates and assumptions that affect thereported amounts of assets, liabilities, and expenses.  The critical accounting policies arediscussed in Item 7 Management’s Discussion and Analysis of Financial Conditionand Results of Operations of our consolidated financial statements theretoincluded in Allos Therapeutics’ Annual Report on Form 10-K for the fiscal yearended December 31, 2002.  These criticalaccounting policies are subject to judgments and uncertainties, which affectthe application of these policies.  Webase our estimates on historical experience, available information andassumptions that we believe to be reasonable under the circumstances.  We apply estimation methodologiesconsistently from period to period.  Theactual results may differ from these estimates under different assumptions orconditions.  We have not made anychanges in any of these critical accounting polices during the six months endedJune 30, 2003.

 

**Results of Operations**

 

*Research and Development.*  Research and development expenses include the costs of clinicaltrials, clinical development, data analysis, non-clinical studies, basicresearch and licensing fees.   Researchand development expenses were $5.1 million for the three months ended June 30,2003 compared to $4.3 million for the three months ended June 30, 2002.  Excluding the impact of non-cash charges(see “Non-cash Charges” below for discussion of deferred stock compensationexpense and stock compensation expense allocated to research and development),research and development expenses increased $946,000.  For the six months ended June 30, 2003 and 2002, research anddevelopment expenses were $8.5 million and 8.2 million, respectively.  Excluding the impact of non-cash charges,research and development expenses increased $511,000.  The increase in both periods was primarily due to close out costsfor terminating our Phase 3 trial of RSR13 in NSCLC. As we continue toimplement our modified clinical development plan there may be additionaltermination fees incurred, as well as the potential of another milestonepayment due for PDX.  Thus, we expect research and development expenses tocontinue to increase during the remainder of 2003.

 

*Clinical Manufacturing.*  Clinical manufacturing expenses include third-party manufacturingcosts for RSR13 for use in clinical trials, costs associated withpre-commercial scale-up of manufacturing to support anticipated commercialrequirements, and development activities for clinical trial material forPDX.  Clinical manufacturing expenseswere $3.9 million for the three months ended June 30, 2003 compared to $726,000for the three months ended June 30, 2002. The $3.2 million increase resulted from termination fees paid forcanceling our outstanding purchase orders for commercial grade bulk drugmaterial of RSR13.  For the six monthsended June 30, 2003 and 2002, clinical manufacturing expenses were $5.9 millionand $1.2 million, respectively in accordance with our updated operating plan.The $4.7 million increase was primarily due to the cancellation of our RSR13purchase orders, increased personnel and consulting costs to support our NDAsubmission and potential commercialization requirements, and increased developmentwork to produce clinical trial drug material for PDX.  We expect clinical manufacturing expenses to decrease during theremainder of 2003 until we begin to scale-up manufacturing efforts forcommercialization of RSR13 as necessary depending on the progress of our NDAsubmission.

 

*Marketing, General and Administrative.*  Marketing, general and administrativeexpenses include the costs for pre-marketing activities, executiveadministration, corporate offices and related infrastructure and corporatedevelopment.  Marketing, general andadministrative expenses were $2.5 million for the three months ended June 30,2003 and 2002.  Excluding the impact ofnon-cash charges (see “Non-cash Charges” below for discussion of deferred stockcompensation expense and stock compensation expense allocated to general andadministrative), marketing, general and administrative expenses increased$199,000.  For the six months ended June30, 2003 and 2002, marketing, general and administrative expenses were $4.5million and $5.2 million, respectively. Excluding the impact of non-cash charges, marketing, general andadministrative expenses increased $417,000. The increase in both periods is primarily due to additional costsassociated with pursuing strategic partnerships, conducting market research inpreparation for the possible commercialization of RSR13, increasing ourvisibility and the increased cost of general liability insurance.  We expect costs in these areas to moderatelyincrease for the remainder of the year as we continue to pursue theseactivities.

 

*Restructuring Costs.*We recorded $578,000 inrestructuring costs during the three months ended June 30, 2003.  The restructuring expenses include severanceand other employee termination costs of approximately $ 574,000 and legal feesof $4,000.   As of June 30, 2003, theremaining liability related to the restructuring totals approximately $432,000.

 

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*Non-cash Charges.*  We recorded stock-based compensation expense resulting primarilyfrom certain options granted prior to our initial public offering with exerciseprices below the fair market value of our common stock on their respectivegrant dates and from variable accounting for vesting of non-employee stockoptions.  For the three months endedJune 30, 2003, we recorded $92,000 in marketing, general and administrative, anegative $3,000 in research and development and $12,000 in clinicalmanufacturing.  The negative balancerecorded in research and development is a result of the reduction in workforce,resulting in the recovery of expense totaling $67,000 related to stock-basedcompensation expense on unvested stock options recorded in prior periods.  For the three months ended June 30, 2002, werecorded $305,000 in marketing, general and administrative, $152,000 inresearch and development and $22,000 in clinical manufacturing.

 

For the six months endedJune 30, 2003, we recorded negative $317,000 in marketing, general andadministrative, $28,000 in research and development and $25,000 in clinicalmanufacturing.  The negative balancerecorded in marketing, general and administrative is due to the change inemployment status of our Chairman from an employee to a consultant, resulting inthe recovery of expenses totaling $762,000 related to stock-based compensationexpense on unvested stock options recorded in prior periods.     For the six months ended June 30, 2002,we recorded $783,000 in marketing, general and administrative, $281,000 inresearch and development and $45,000 in clinical manufacturing.  As of June 30, 2003, we had $496,000 ofdeferred stock-based compensation remaining to be expensed in future periods.

 

*Interestand Other Income, Net.*  Interest income, net ofinterest expense, was $277,000 and $675,000 for the three months ended June 30,2003 and 2002, respectively.  For thesix months ended June 30, 2003 and 2002, net interest income was $649,000 and$1,287,000, respectively.  The decreasesof $398,000 and $638,000, respectively, were primarily due to lower averageinvestment balances and yields on U.S. government securities, high-gradecommercial paper and notes, and money market funds held by us.

 

**Liquidity and Capital Resources**

 

Since inception, we havefinanced our operations primarily through private placements of common andpreferred stock, a public equity financing, and interest income, which haveresulted in net proceeds to us of $138.0 million through June 30, 2003. We haveused $91.4 million of cash for operating activities.  As of June 30, 2003, we had approximately$10.5 million in cash and cash equivalents and $33.0 million ininvestments.  Net cash used in operatingactivities of $16.9 million and $9.4 million during the six months ended June30, 2003 and 2002, respectively, resulted primarily from the net loss for theperiod offset by an increase in accrued research and development expenses.

 

Net cash provided byinvesting activities of $23.5 million for the six months ended June 30, 2003consisted primarily of proceeds from maturities of investments, net ofpurchases and capital expenditures.  Netcash use in investing activities of $4.2 million for the six months ended June30, 2002 consisted primarily of purchases of investments, net of proceeds,investing in equity of another company and capital expenditures.

 

Net cash provided byfinancing activities of $107,000 for the six months ended June 30, 2003resulted from the exercise of common stock options and the sale of stock underour employee stock purchase plan.  Netcash provided by financing activities of $15.1 million for the six months endedJune 30, 2002 resulted from the private sale of common stock to a singleinvestor, exercise of common stock options and the sale of stock under ouremployee stock purchase plan.

 

We haveno other material external sources of liquidity. Because we have not derivedany commercial revenues from product sales and a significant amount of ourcapital resources are held in the form of short-term financial instruments,decreasing yields on instruments such as United States government securities,high-grade commercial paper and corporate notes and money market funds wouldreduce net cash provided by investing activities, which is our primary sourceof liquidity in the absence of additional capital raised through additionalequity or debt financing.

 

Below is a schedule ofthe timing of contractual commitments related to our leases and servicecontracts.

 
|                               |   | **2003** |    | **2004**  |   | **2005**  |   | **2006** |    | **2007** |   | **Thereafter** |   | **Total** |      |
|------------------------------------|--------|----------|---------|-----------|--------|-----------|--------|----------|---------|----------|--------|----------------|--------|-----------|-----------|
| Operating leases                   |   | $        | 288,781 |      | $      | 767,427   |   | $        | 721,309 |     | $      | 717,910        |   | $         | 758,646   |   | $ | 632,205 |   | $ | 3,886,278 |   |
| Other obligations                  |   | 322,746  |    | 1,032,073 |   | —    |   | 500,000  |    | 500,000  |   | 1,000,000      |   | 3,354,819 |      |
|                               |   |     |    |      |   |      |   |     |    |     |   |           |   |      |      |
| Total contractual cash obligations |   | $        | 611,527 |      | $      | 1,799,500 |   | $        | 721,309 |     | $      | 1,217,910      |   | $         | 1,258,646 |   | $ | 1,632,205 |   | $ | 7,241,097 |   |

 

Other obligations includetermination fees for contracts with clinical research organizations and futuremilestone payments under our in-licensing commitments, which could be paidearlier depending on the timing of achieving the respective milestone.

 

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We believe that ourexisting cash, cash equivalents and investments will be adequate to satisfy ourcapital needs through 2004.  However,our ability to continue developing RSR13 and PDX will require substantialadditional capital beyond 2004.  Ourforecast of the period of time through which our financial resources will beadequate to support our operations is a forward-looking statement that involvesrisks and uncertainties, and actual results could vary materially.  Our actual capital requirements will dependon many factors, including product development plans; the time and costinvolved in conducting clinical trials and seeking regulatory approvals;filing, prosecuting and enforcing patent claims; competing technological andmarket developments; and our ability to market and distribute our futureproducts and establish new collaborative and licensing arrangements. We intendto raise additional capital in the future through arrangements with corporatepartners, or through equity or debt financings.  Such arrangements may be dilutive to existing stockholders.  In addition, if additional funds are obtainedthrough arrangements with collaborative partners or other sources, such arrangementsmay require us to relinquish rights to some of our technologies, productcandidates or products under development that we would otherwise seek todevelop or commercialize ourselves. Recently, one of our third-party collaborators alleged that wehave breached certain of our obligations under our agreement with thecollaborator.  We believe thecollaborator’s allegations are without merit, however if we cannot resolve theallegations or successfully defend against any claims that the collaborator maybring, we may incur significant liabilities. The results of our Phase 3 clinical trial and the resulting impact onour stock price as well as the restrictive financing environment will make itdifficult to obtain additional capital resources.  There isno assurance that we will be successful in consummating any sucharrangements.  In the event we are notable to raise sufficient additional funds, we may be required to delay, scaleback, or eliminate one or more of our product development programs.

 

**Risk Factors**

 

Inaddition to the other information contained in this report, we cautionstockholders and potential investors that the following important risk factors,among others, in some cases have affected, and in the future could affect, ouractual results of operations and could cause our actual results to differmaterially from those expressed in any forward-looking statements made by or onbehalf of us.  The following informationis not intended to limit in any way the characterization of other statements orinformation under other captions as cautionary statements for suchpurpose.  These factors include:

 

•                  Delay, difficulty, orfailure to obtain adequate financing on acceptable terms to fund futureoperations, including research, development and commercialization of productcandidates.

 

•                  Delay, difficulty, orfailure to complete the submission of our NDA to the FDA on schedule and inaccordance with regulatory requirements.

 

•                  Delay, difficulty, orfailure to obtain regulatory approval or clearance to market our productcandidates, including delays or difficulties in development because ofinsufficient proof of safety or efficacy.

 

•                  Failure to conductclinical trials in compliance with applicable regulations and at an acceptablecost.

 

•                  The ability to obtain,maintain and enforce intellectual property rights; the cost of acquiringin-process technology and other intellectual property rights, either bylicense, collaboration or purchase of another entity; the cost of enforcing ordefending our intellectual property rights.

 

•                  Failure of third-partycollaborators to effectively conduct research and development activities,including drug discovery and clinical testing; conflicts of interest orpriorities or disputes that may arise between us and such third-partycollaborators.

 

•                  Dependence upon thirdparties to manufacture our product candidates and formulated drug product;failure of third parties to manufacture our product candidates or formulateddrug product in compliance with regulatory requirements and at an acceptablecost; failure of third parties to supply sufficient quantities of our productcandidates substance or formulated drug product for preclinical, clinical orcommercial purposes; failure to establish alternative sources of supply of our productcandidates or formulated drug product.

 

•                  The ability to createsales, marketing and distribution capabilities for our product candidates, orenter into agreements with third parties to perform these functions.

 

•                  The ability to obtainacceptable prices or adequate levels of reimbursement for our products fromthird-party payors, including government and health administration authoritiesand private health insurers.

 

•                  Competitive or marketfactors that may limit the use or broad acceptance of our product candidates.

 

•                  The ability to attractand retain highly qualified management and scientific personnel.

 

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•                  Changes in accountingrules and regulations, such as accounting for guarantees, restructuring chargesand stock options, that could have a significant adverse impact on our resultsof operations, causing our stock price to decline and negatively impacting ourefforts to obtain adequate financing.

 

13

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**ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK**

 

#### **Market Risk**

 

We own financial instruments that are sensitive tomarket risks as part of our investment portfolio.  The investment portfolio is used to preserve our capital until itis required to fund operations.  All ofthese market-risk sensitive instruments are classified asheld-to-maturity.  We do not ownderivative financial instruments in our investment portfolio.  Our investment portfolio containsinstruments that are subject to the risk of a decline in interest rates.  We maintain a non-trading investmentportfolio of investment grade, liquid debt securities that limit the amount ofcredit exposure to any one issue, issuer or type of instrument.  Due to the short duration and conservativenature of these instruments, we do not believe that we have a material exposureto interest rate risk.

 

# **Investment Risk**

 

As of June 30, 2003, we held equity securities ofanother company in the amount of $1,000,000. This investment is recorded at cost. We regularly review the carrying value to identify and record losseswhen events and circumstances indicate that a decline in the fair value of theasset below our accounting basis is other-than-temporary.  We do not believe that any impairment hasoccurred at this time.

 

**ITEM 4.  CONTROLS AND PROCEDURES**

 

Asof the end of the period covering this report, an evaluation was carried outunder the supervision and with the participation of our management, includingour principal executive and financial officer (the “Evaluating Officer”), ofthe effectiveness of our disclosure controls and procedures, as defined in Rule13a-15(e) of the Securities Exchange Act of 1934, as amended (“ExchangeAct”).  Based on that evaluation, theEvaluating Officer has concluded that our disclosure controls and proceduresare effective to ensure that information required to be disclosed by us inreports that we file or submit under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in Securities andExchange Commission rules and forms, and that such information is accumulatedand communicated to our management, including our Evaluating Officer, asappropriate, to allow timely decisions regarding required disclosure.

 

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**PART II.  OTHER INFORMATION**

 

Item 1.                                Legal Proceedings                                                                                                                                                                           None

 

Item 2.                                Changes in Securities and Use of Proceeds

 

In May 2003, wedesignated 1,000,000 shares of our authorized preferred stock as Series AJunior Participating Preferred Stock, par value $0.001 per share, pursuant to aStockholder Rights Plan approved by our Board of Directors under which allstockholders of record as of May 28, 2003 received a dividend distribution ofone preferred share purchase right (a “Right”) for each outstanding share ofthe Company’s common stock. The Rights trade with the common stock and noseparate Right certificates will be distributed until such time as the Rightsbecome exercisable in accordance with the Stockholder Rights Plan. TheStockholder Rights Plan is intended as a means to guard against abusivetakeover tactics and to provide for fair and equal treatment for allstockholders in the event that an unsolicited attempt is made to acquire theCompany.

 

Item 3.                                Defaults Upon Senior Securities                                                                                                   None

 

Item 4.                                Submission of Matters to a Vote ofSecurity Holders

 

Weheld our annual meeting of stockholders on May 30, 2003.  At such meeting, the following actions werevoted upon:

 

a.               Election ofDirectors

 
|                            |   | **For**   |   | **Withheld** |   |
|---------------------------------|--------|-----------|--------|--------------|--------|
| Stephen J. Hoffman, Ph.D., M.D. |   | 7,633,352 |   | 5,730,774    |   |
| Michael E. Hart                 |   | 7,858,933 |   | 5,505,193    |   |
| Donald J. Abraham, Ph.D.        |   | 7,858,621 |   | 5,505,505    |   |
| Michael D. Casey                |   | 7,859,926 |   | 5,504,200    |   |
| Mark G. Edwards                 |   | 7,136,612 |   | 6,227,514    |   |
| Marvin E. Jaffe, M.D.           |   | 7,765,514 |   | 5,598,612    |   |

 

b.              Approval of anamendment to our 2000 Stock Incentive Compensation Plan to increase theaggregate number of shares of common stock authorized for issuance under suchplan by 1,000,000 shares from 2,151,037 shares to a total of 3,151,037 shares.

 

| **For**   |   | **Against** |   | **Abstentions** |   |
|-----------|--------|-------------|--------|-----------------|--------|
| 3,247,760 |   | 9,480,109   |   | 636,257         |   |

 

c.               Ratification ofPricewaterhouseCoopers, LLP as our independent accountants for the fiscal yearending December 31, 2003.

 

| **For**    |   | **Against** |   | **Abstentions** |   |
|------------|--------|-------------|--------|-----------------|--------|
| 13,354,384 |   | 7,842       |   | 1,900           |   |

 

Item 5.                                Other Information                                                                                                                                                                              None

 

Item 6.                                Exhibits and Reports on Form 8-K

 

(a)                           Exhibits

 
| 4.03(1) | Certificate of  Designation of Series A Junior Participating Preferred Stock.                               |
|---------|-------------------------------------------------------------------------------------------------------------|
| 4.04(1) | Rights Agreement dated  as of May 6, 2003 among Allos Therapeutics, Inc. and Mellon Investor Services  LLC. |
| 4.05(1) | Form of Rights  Certificate.                                                                                |
| 31.01   | Rule 13a-14(a)  Certification.                                                                              |
| 32.01   | Section 1350  Certification.                                                                                |

 

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(1) Incorporated by reference to our CurrentReport on Form 8-K (File No. 000-29815), as filed with the Commission on May 9,2003.

 

(b)                          Reports on Form 8-K.

 

On April 30, 2003, we filed a report on Form 8-K reporting the preliminary results of our Phase 3 trial of RSR13 in patients with brain metastases.

On May 9, 2003, we filed a report on Form 8-K reporting under Item 5 that we had adopted a Stockholder Rights Plan and reporting under Items 9 and 12 that we had issued an announcement of our first quarter 2003 financial results.

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
| Date:  August 8, 2003 |   | **ALLOS THERAPEUTICS, INC.**                                     |
|----------------------------|--------|------------------------------------------------------------------|
|                       |   |                                                             |
|                       |   |                                                             |
|                       |   | /s/ Michael E. Hart                                              |   |
|                       |   | Michael E. Hart                                                  |
|                       |   | President, Chief  Executive Officer, and Chief Financial Officer |
|                       |   | (Principal Executive  Officer and Principal Financial Officer)   |

 

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