VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 18, 2011) - Allon Therapeutics Inc. (TSX:NPC) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Allon Therapeutics Inc. today announced that it has completed the previously announced public offering of units and common shares (the "Offering") resulting in gross proceeds of $4,357,842.50 and a subscription receipt for $1,084,032.50 for a total of $5,441,875 as more particularly described below.

Allon sold 9,767,500 units ("Units") at a price of $0.25 per Unit and 7,663,870 common shares ("Common Shares") at a price of $0.25 per Common Share, resulting in gross proceeds to Allon of $4,357,842.50. Each unit consists of one common share and a one-half (1/2) of a common share purchase warrant. Each warrant is exercisable at a price of $0.40 for a period of 60 months from the closing of the Offering.

Additionally, pursuant to the requirements of the Toronto Stock Exchange rules, Allon sold one subscription receipt (the "Subscription Receipt") to Neuro Discovery II Limited Partnership ("Neuro Discovery"), a current insider of Allon, for the purchase price of $1,084,032.50. The Subscription Receipt is exercisable into 4,336,130 common shares of the Company (the "Subscription Receipt Common Shares") and 6,000,000 warrants of the Company (the "Subscription Receipt Warrants"). The issuance of the Subscription Receipt Common Shares and the Subscription Receipt Warrants are subject to the approval of a majority of disinterested shareholders of Allon (the "Shareholders Condition"). Of the Subscription Receipt Proceeds, $53,761.50 will be paid to Allon as a non-refundable deposit (the "Deposit") upon closing of the Offering.

The Subscription Receipt Proceeds less the Deposit will be held in escrow until the earlier of (i) the date that is 70 days from the Closing Date of the Offering; (ii) the date the Shareholders Condition is satisfied, or (iii) the date the majority of disinterested shareholders of Allon do not approve the Shareholders Condition. If the Shareholders Condition is not satisfied within 70 days of the Closing Date of the Offering, the Subscription Receipt Proceeds, other than the Deposit, will be returned to Neuro Discovery and the Subscription Receipt will be cancelled. Allon has agreed to hold a meeting of its shareholders within 70 days of the closing of the Offering.

The Offering was led by GMP Securities L.P. (the "Lead Agent"), on behalf of a syndicate of agents, including Canaccord Genuity Corp. (together, the "Agents"). The net proceeds from the Offering shall be used for (i) Clinical trial activities related to completion of enrollment and ongoing patient dosing for the PSP study, including manufacturing expenses in relation to clinical drug supplies, and (ii) general administrative expenses, working capital and general corporate purposes. The transaction is subject to the receipt of all necessary regulatory and stock exchange approvals.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly, may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities laws or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the issuer and its management, as well as financial statements.

About Allon

Allon Therapeutics Inc. is a clinical-stage biotechnology company focused on bringing to market innovative central nervous system therapies. Allon's lead drug davunetide is proceeding in a pivotal Phase 2/3 clinical trial in an orphan indication, progressive supranuclear palsy (PSP), under a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA). This pivotal trial is based upon statistically significant human efficacy demonstrated in patients with amnestic mild cognitive impairment (a precursor to Alzheimer's disease) and cognitive impairment associated with schizophrenia, and in positive biomarker data.

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

AboutDavunetide

Allon is currently enrolling patients in a pivotal Phase 2/3 clinical trial evaluating davunetide as a potential treatment for PSP, a rapidly-progressing and fatal movement disorder with dementia which is often misdiagnosed as Parkinson's or Alzheimer's disease. Allon reached agreement on a SPA with the FDA, as well as Orphan Drug and Fast Track Status in the U.S. Similarly, Allon has Orphan Status for davunetide in the EU.

Davunetide is derived from a naturally occurring neuroprotective brain protein known as activity dependent neuroprotective protein (ADNP). Allon's human clinical and pre-clinical data suggest that davunetide works on microtubules, structures in the brain critical to communication between cells, and central to the tau pathway. Davunetide has shown statistically significant impacts on memory, activities of daily living, and a biomarker of brain cell function and integrity. Allon has extensive intellectual property protecting davunetide.

Forward Looking Statements

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