SRI International, Memorial Sloan-Kettering and Southern Research Institute License Phase II Oncology Drug to Allos Therapeutics

MENLO PARK, California - January 8, 2003 - SRI International, an independent research and development organization, announced today that together with project collaborators Memorial Sloan-Kettering Cancer Center (MSKCC) and Southern Research Institute, it has licensed exclusive worldwide rights to PDX (10-propargyl-10-deazaaminopterin), a proprietary Phase II oncology drug, to Allos Therapeutics, Inc. (Nasdaq: ALTH). Allos plans to expedite clinical development of this promising agent for the treatment of non-small cell lung cancer.

Under the terms of the agreement, Allos has made an up-front payment to the collaborators. Allos will also pay future fees based on the achievement of certain development milestones and will pay royalties on future sales. Allos is responsible for all future development activities and expenses, and is solely responsible for all commercialization activities.

PDX, an inhibitor of dihydrofolate reductase (DHFR), is a novel anti-folate with expected superior potency and side effect profile relative to methotrexate and related anti-folates. PDX was first synthesized by SRI International medicinal chemists as a potential improved analog of edatrexate, an earlier anti-folate developed by SRI International and MSKCC. Preclinical development was performed by MSKCC and Southern Research Institute. All clinical trials have been carried out by the Experimental Therapeutics Center at MSKCC.

Significant activity was shown in a recently completed Phase II study of PDX as a single agent in 39 highly pretreated patients with non-small cell lung cancer. Current clinical trials at MSKCC include single-agent studies in Non-Hodgkin's lymphoma (Phase I trial) and mesothelioma (Phase II trial), and a combination study with docetaxel in non-small cell lung cancer patients (Phase I trial).

"Phase I studies at Memorial Sloan-Kettering have shown that myelosuppression is not the dose-limiting toxicity for PDX, making it an excellent candidate for combination studies with other oncology products. SRI International is excited by the promise of PDX and by the opportunity the agreement with Allos represents to bring a new anti-cancer agent to market," said James P. McNamara, Ph.D., senior director of business development in SRI's Biosciences Division.

SRI International's Biosciences Division works with government and commercial pharmaceutical clients to discover and pursue lead compounds and advance research of therapeutics and vaccines in cancer, neuroscience, and infectious diseases. The group provides a broad range of preclinical discovery and development services, including medicinal chemistry, custom synthesis, efficacy and safety evaluations, pharmacokinetics and metabolism studies, analytical chemistry and formulation design and production in a GLP and cGMP environment.

About SRI International
Silicon Valley-based SRI International (http://www.sri.com) is one of the world's leading independent research and technology development organizations. Founded as Stanford Research Institute in 1946, SRI has been meeting the strategic needs of clients for more than 55 years. The nonprofit research institute performs contract research and development for government agencies, commercial businesses and private foundations. In addition to conducting contract R&D, SRI licenses its technologies, forms strategic partnerships and creates spin-off companies.