Allarity Therapeutics settles US$4.9M liability for US$1M
A one-time gain is expected to exceed fourth-quarter operating expenses, while full-year guidance still calls for a loss.
Adrian Kessler
A US$1 million payment has settled US$4.9 million plus interest in legacy liabilities as Allarity Therapeutics, Inc. NASDAQALLR forecast a fourth-quarter profit on Friday. The company expects earnings of US$0.01 to US$0.04 a share because the settlement gain should exceed quarterly operating expenses.
The Nov. 13 release said Allarity paid the settlement after the Sept. 30 quarter-end under an agreement covering its previously terminated dovitinib licence. The settlement summary did not specify the payment date or quantify accrued interest.
Allarity is a small clinical-stage cancer drug developer with principal operations in Denmark and a U.S. business address in Florida.
Shares closed at US$0.91 on Nasdaq NASDAQALLR at 4:00 p.m. EST on Nov. 12, before Friday's announcement.
The Nov. 13 figures imply a US$3.9 million difference between the stated liability and the cash payment, before interest. The payment uses cash even as extinguishing the larger obligation generates an accounting gain.
Allarity forecast a full-year 2026 loss of US$0.73 to US$0.76 a share despite the expected fourth-quarter profit. The estimates are preliminary and unaudited, and the company did not provide guidance for 2027.
"We resolved a significant legacy liability and the expected gain from that settlement is the primary driver of our fourth-quarter earnings guidance," Allarity chief executive Thomas Jensen said in the release.
At Sept. 30, Allarity reported US$24.1 million in cash and restricted cash, including US$10 million that was restricted. The balance excluding restricted cash was therefore US$14.1 million at quarter-end, before the subsequent settlement payment.
The third-quarter net loss attributable to common stockholders widened to US$6.2 million from US$2.8 million a year earlier. Allarity attributed most of the increase to a one-time manufacturing expense for stenoparib, its experimental cancer treatment.
Research and development expenses reached US$4.2 million in the third quarter of 2026, against US$1.2 million a year earlier. They included a US$3.2 million active pharmaceutical ingredient manufacturing charge to support supply for a potential pivotal trial.
Cancer Developers Prepare For Pivotal Trials
Allarity said enrolment continued in its Phase 2 stenoparib study for advanced, recurrent ovarian cancer that is platinum-resistant or platinum-ineligible. A separate Phase 2 study combining stenoparib with temozolomide for relapsed small cell lung cancer also continued enrolment, with that trial fully funded by the U.S. Department of Veterans Affairs.
Another clinical-stage oncology developer, Black Diamond Therapeutics, Inc. NASDAQBDTX, reported US$102 million in cash, equivalents and investments at Sept. 30. Its Nov. 10 update projected funding into the second half of 2028 and a potential pivotal silevertinib trial start in the second quarter of 2027.
Read more: Black Diamond Therapeutics plans 300-patient silevertinib trial after FDA feedback
For biotechnology market context, Google Finance recorded the State Street SPDR S&P Biotech ETF NYSEARCAXBI at US$151.20 as of 8:00 p.m. EST on Nov. 12.
Laboratory Services Add A Revenue Route
Allarity's Nov. 13 update also highlighted its first revenue-generating contract under its laboratory services strategy, announced in October. It will provide an unnamed European biotechnology company with development, validation and related laboratory services for a precision oncology predictive device intended for U.S. use.
The laboratory in Hoersholm, Denmark, obtained a registration certificate under the Clinical Laboratory Improvement Amendments, Allarity announced in July. The company said that supports testing for its own U.S. trials and services for external customers.
Read more: Lucid Diagnostics reports US$1.2M revenue and US$18M quarter-end cash
The fourth-quarter forecast covers the period ending Dec. 31. Results for that period will show whether the settlement gain exceeds operating expenses as Allarity expects; the clinical update gives no initiation date for a pivotal stenoparib trial.
