10-K

Use these links to rapidly review the document
TABLE OF CONTENTS
Allos Therapeutics, Inc. Index to Financial Statements

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 2007.
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 00029815

Allos Therapeutics, Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 54-1655029
(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)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock $.001 Par Value
(Title of class) NASDAQ Stock Market LLC
(NASDAQ Global Market)
(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer ý Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

         The aggregate market value of common stock held by nonaffiliates of the registrant (based upon the closing sale price of such shares on the NASDAQ Global Market on June 29, 2007) was $149,964,368. Shares of the registrant's common stock held by each current executive officer and director and by each stockholder who is known by the registrant to own 10% or more of the outstanding common stock have been excluded from this computation in that such persons may be deemed to be affiliates of the registrant. Share ownership information of certain persons known by the registrant to own greater than 10% of the outstanding common stock for purposes of the preceding calculation is based solely on information on Schedules 13D and 13G, if any, filed with the Commission. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

         As of February 20, 2008, there were 67,837,907 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the registrant's definitive Proxy Statement for the 2008 Annual Meeting of Stockholders to be filed within 120 days after the end of the Registrant's fiscal year ended December 31, 2007 are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated therein.

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	17
ITEM 1B.	UNRESOLVED STAFF COMMENTS	34
ITEM 2.	PROPERTIES	34
ITEM 3.	LEGAL PROCEEDINGS	35
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	35
PART II
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	36
ITEM 6.	SELECTED FINANCIAL DATA	38
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	52
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	52
ITEM 9A.	CONTROLS AND PROCEDURES	53
ITEM 9B.	OTHER INFORMATION	54
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	55
ITEM 11.	EXECUTIVE COMPENSATION	55
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	55
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	56
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	56
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	57
	SIGNATURES	61

2

PART I

Allos Therapeutics, Inc., the Allos Therapeutics, Inc. logo and all other Allos names are trademarks of Allos Therapeutics, Inc. in the United States and in other selected countries. All other brand names or trademarks appearing in this report are the property of their respective holders. Unless the context requires otherwise, references in this report to "Allos," the "Company," "we," "us," and "our" refer to Allos Therapeutics, Inc.

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements concerning our projected timelines for the completion of enrollment and announcement of results from our ongoing clinical trials, including our Phase 2 PROPEL trial; the potential for the results of our Phase 2 PROPEL trial to support marketing approval of PDX; other statements regarding our future product development and regulatory strategies, including our intent to develop or seek regulatory approval for our product candidates in specific indications; the ability of our third-party manufacturing parties to support our requirements for drug supply; any statements regarding our future financial performance, results of operations or sufficiency of capital resources to fund our operating requirements; and any other statements which are other than statements of historical fact. In some cases, these statements may be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements involve known and unknown risks and uncertainties that may cause our, or our industry's results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, those discussed under the captions "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." All forward-looking statements included in this report are based on information available to us as of the date hereof and we undertake no obligation to revise any forward-looking statements in order to reflect any subsequent events or circumstances. Forward-looking statements not specifically described above also may be found in these and other sections of this report.

ITEM 1.    BUSINESS

Overview

        We are a biopharmaceutical company focused on developing and commercializing innovative small molecule drugs for the treatment of cancer. We strive to develop proprietary products that have the potential to improve the standard of care in cancer therapy. Our focus is on product opportunities for oncology that leverage our internal clinical development and regulatory expertise and address important markets with unmet medical need. We may also seek to grow our existing portfolio of product candidates through product acquisition and in-licensing efforts.

        Our lead product candidate, PDX (pralatrexate), is a novel antifolate currently under evaluation in a pivotal Phase 2 trial in patients with relapsed or refractory peripheral T-cell lymphoma. This trial, which is called PROPEL, is being conducted under an agreement reached with the U.S. Food and Drug Administration, or FDA, under its special protocol assessment process, or SPA process, which provides an agreement that the study design, including trial size, clinical endpoints and/or data analyses are acceptable to the FDA. We are also investigating PDX in patients with non-small cell lung cancer and a range of lymphoma sub-types. Our other product candidate is RH1, a targeted chemotherapeutic agent currently under evaluation in a Phase 1 trial in patients with advanced solid tumors or non-Hodgkin's Lymphoma.

3

Our Strategy

        Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with one or more potential strategic partners. The key elements of our strategy are to:

•

Focus on the oncology market.  We intend to continue to focus our drug development efforts on the oncology market. We believe the oncology market is attractive due to its size, demand for safer and more effective cancer treatments, relatively small physician population that can be addressed with a targeted sales force, and potential for expedited regulatory review.



•

Obtain regulatory approval to market PDX.  We are currently focused on completing our pivotal Phase 2 PROPEL trial and, if the results are positive, obtaining regulatory approval to market PDX for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma. The PROPEL trial is being conducted under an agreement reached with the FDA under its SPA process.



•

Advance PDX and RH1 development programs.  In addition to the PROPEL trial, we are committed to evaluating PDX and RH1 for oncology use as single agents and in combination with other therapies. We currently have six ongoing clinical trials involving PDX, including the PROPEL trial, and plan to initiate additional trials to evaluate PDX's potential clinical utility in other hematologic malignancies and solid tumor indications. We also recently initiated a Phase 1 trial of RH1 in patients with advanced solid tumors or non-Hodgkin's lymphoma and are in the process of determining our future development plans for RH1.



•

Develop sales and marketing capabilities to commercialize our product candidates. We currently retain exclusive worldwide commercial rights to PDX and RH1 for all indications. We intend to commercialize any approved product candidates by building an oncology focused United States sales and marketing organization which may be complemented by co-promotion arrangements with pharmaceutical or biotechnology partners, where appropriate. We intend to enter into co-promotion or out-licensing arrangements with other pharmaceutical or biotechnology firms, where necessary, to reach foreign market segments that are not reachable by a United States-based sales force or when deemed strategically and economically advisable.



•

Expand our product candidate portfolio.  We may pursue opportunities from time to time to expand our product candidate portfolio by identifying and evaluating new compounds that have demonstrated potential in preclinical or clinical studies and are strategically aligned with our existing oncology portfolio. Our intent is to build a portfolio of proprietary product candidates that have the potential to improve the standard of care in cancer therapy and provide commercial, regulatory or geographic exclusivity.

4

Our Product Candidates

        The following table summarizes the target indications and clinical development status of our product candidates:

PDX (pralatrexate)

        PDX is a novel, small molecule chemotherapeutic agent that inhibits dihydrofolate reductase, or DHFR, a folic acid (folate)-dependent enzyme involved in the building of nucleic acid, or DNA, and other processes. PDX was rationally designed for efficient transport into tumor cells via the reduced folate carrier, or RFC-1, and effective intracellular drug retention. We believe these biochemical features, together with preclinical and clinical data in a variety of tumors, suggest that PDX may have a favorable safety and efficacy profile relative to methotrexate and other related DHFR inhibitors. We believe PDX has the potential to be delivered as a single agent or in combination therapy regimens.

Scientific Rationale

        The antimetabolites are a group of low-molecular weight compounds that exert their effect by virtue of their structural or functional similarity to naturally occurring molecules involved in DNA synthesis. Because the cell mistakes them for a normal metabolite, they either inhibit critical enzymes involved in DNA synthesis or become incorporated into the nucleic acid, producing incorrect codes. Both mechanisms result in inhibition of DNA synthesis and ultimately, cell death. Because of their primary effect on DNA synthesis, the antimetabolites are most effective against actively dividing cells and are largely cell-cycle phase specific. There are three classes of antimetabolites; purine analogs, pyrimidine analogs and folic acid analogs, also termed antifolates. PDX is a folic acid analog.

5

        The selectivity of antifolates for tumor cells involves their conversion to a polyglutamated form by the enzyme folypolyglutamyl synthetase, or FPGS. Polyglutamation is a time- and concentration-dependent process that occurs in tumor cells, and to a lesser extent, normal tissue. The selective activity of the folic acid analogs in malignant cells versus normal cells likely is due to the relative difference in polyglutamate formation. Polyglutamated metabolites have prolonged intracellular half-life, increased duration of drug action and are potent inhibitors of several folate-dependent enzymes, including DHFR.

        It is thought that the resistance of malignant cells to the effects of the folic acid analogs may, in part, be due to impaired polyglutamation. The improved antitumor effects of PDX in comparison to methotrexate, as observed in preclinical studies, is likely due to the more effective uptake and transport of PDX into the cell followed by the greater accumulation of PDX and its metabolites within the tumor cell through the formation of the polyglutamated derivatives.

PDX in the treatment of peripheral T-cell lymphoma

        Peripheral T-cell lymphomas, or PTCLs, are a biologically diverse and uncommon group of blood cancers that account for approximately 10% to 15% of all cases of non-Hodgkin's lymphoma in the United States. PTCL patients are often treated with multi-agent chemotherapy regimens, for which response rates range from 50% to 70%. However, a significant number of these patients relapse or become refractory after treatment with first-line therapy. A study that included patients with aggressive PTCL found that the average five-year survival rate for those patients was approximately 25%. There are currently no pharmaceutical agents approved for use in the treatment of either first-line or relapsed or refractory PTCL.

        In August 2006, we initiated PROPEL, an international, multi-center, open-label, single-arm Phase 2 clinical trial of PDX in patients with relapsed or refractory PTCL, that we believe, if positive, will be sufficient to support the filing of a new drug application, or NDA, to seek marketing approval for PDX in this indication. In July 2006, we reached agreement with the FDA under its special protocol assessment, or SPA, process on the design of this Phase 2 trial. The SPA process allows for FDA evaluation of a clinical trial protocol intended to form the primary basis of an efficacy claim in support of an NDA, and provides an agreement that the study design, including trial size, clinical endpoints and/or data analyses are acceptable to the FDA. However, the PROPEL trial protocol does not specify the response rate required to support FDA approval and the response rate will need to be adequate to support approval. The PROPEL trial will seek to enroll a minimum of 100 evaluable patients at up to 35 centers across the United States, Canada and Europe. The primary endpoint of the study is objective response rate (complete and partial response). Secondary endpoints include duration of response, progression-free survival and overall survival. Patients receive 30 mg/m² of PDX once every week for six weeks followed by one week of rest per cycle of treatment. The treatment regimen also includes vitamin B₁₂ and folic acid supplementation.

        In accordance with the PROPEL trial protocol, we conducted three pre-planned interim analyses of safety data and one pre-planned interim analysis of response data. In January, September and December 2007, we announced that an independent data monitoring committee, or DMC, completed interim analyses of safety data from the first 10, 35 and 65 evaluable patients who completed at least one cycle of treatment with PDX, respectively, and recommended that the trial continue per the protocol at each analysis. No major safety concerns were identified by the DMC. In September 2007, we announced that the results of the interim analysis of patient response data exceeded the pre-specified threshold for continuation of the trial, which required a minimum of four responses (complete or partial) out of the first 35 evaluable patients, as determined by independent oncology review. We currently expect to complete patient enrollment in the PROPEL study in the second quarter of 2008 and report top line results of the trial by year end, although the actual timing may vary based on a number of factors, including patient enrollment rates.

6

        Our decision to begin PROPEL was based upon interim data from an ongoing Phase 1/2 single-center, open-label, single-center study of PDX in patients with relapsed or refractory non-Hodgkin's lymphoma, or NHL, and Hodgkin's disease. Interim data from this trial, which was most recently presented at the AACR-NCI-EORTC conference in October 2007, demonstrated a high overall response rate in patients with various subtypes of T-cell lymphoma. Notably, responses were observed in 14 of 26 (54%) evaluable patients with T-cell lymphoma, including nine complete responses and five partial responses. The addition of vitamins to the treatment regimen appeared to mitigate the occurrence of advanced grade stomatitis, or mouth ulcers, a toxicity commonly associated with PDX.

        In July 2006, the FDA awarded orphan drug status to PDX for the treatment of patients with T-cell lymphoma. Under the Orphan Drug Act, if we are the first company to receive FDA approval for PDX for this orphan drug indication, we will obtain seven years of marketing exclusivity during which the FDA may not approve another company's application for the same drug for the same orphan indication. In October 2006, the FDA granted fast track designation to PDX for the treatment of patients with T-cell lymphoma. The fast track program is designed to facilitate the development and expedite the review of new drugs that are intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs. In April 2007, the Commission of the European Communities, with a favorable opinion of the Committee for Orphan Medicinal Products of the European Medicines Agency, or EMEA, granted orphan medicinal product designation to PDX for the treatment of patients with PTCL. The EMEA orphan medicinal product designation, or OMPD, is intended to promote the development of drugs that may provide significant benefit to patients suffering from rare diseases identified as life-threatening or very serious. Under EMEA guidelines, OMPD provides ten years of potential market exclusivity once the product candidate is approved for marketing for the designated indication in the European Union.

PDX in the treatment of non-Hodgkin's Lymphoma and Hodgkin's disease

        Approximately 63,000 patients were expected to be diagnosed with NHL in the United States in 2007 and approximately 85% of NHL patients represent patients with B-cell lymphoma. The incidence of NHL has increased significantly since the 1970's and is currently growing at approximately 1% to 2% per year. Patients with indolent or low-grade NHL may have survival rates as long as 10 years, yet the disease is frequently incurable. Aggressive lymphomas generally result in shorter median survival times although patients with these malignancies can be cured in 30% to 60% of cases. Standard chemotherapy for NHL involves an initial combination of cyclophosphamide, doxorubicin, vincristine and prednisone, also known as CHOP. The addition of rituximab in one study increased response rates to nearly 100%. However, a significant number of patients treated with CHOP or rituximab eventually relapse and may be candidates for salvage chemotherapy, or chemotherapy given after recurrence of a tumor.

        As mentioned above, we are currently evaluating PDX in an ongoing Phase 1/2, open-label, single-center study in patients with relapsed or refractory NHL and Hodgkin's disease. Interim data from this trial, which was most recently presented at the AACR-NCI-EORTC conference in October 2007, showed that responses were observed in 2 of 20 (10%) evaluable patients with B-cell lymphoma. Going forward, we plan to use this study to explore alternate dosing and administration schedules in patients with B-cell lymphoma to further evaluate PDX's potential clinical utility in this setting.

        In May 2007, we initiated patient enrollment in a Phase 1/2a, open-label, multi-center study of PDX and gemcitabine with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory NHL or Hodgkin's disease. In the Phase 1 portion of this study, patients with either relapsed or refractory NHL (diffuse large B- or T-cell lymphoma, mantle cell lymphoma, transformed large cell lymphomas) or Hodgkin's disease will receive PDX followed the next day by gemcitabine as part of a weekly schedule for three or four weeks with concurrent vitamin B₁₂ and folic acid supplementation. We plan to enroll up to 54 evaluable patients in the Phase 1 portion of the study with the objective of

7

determining the maximum tolerated dose, or MTD, safety, tolerability, and pharmacokinetic profile of escalating doses of sequential PDX and gemcitabine. If the Phase I portion of the study is successful, we plan to enroll up to 30 additional patients with relapsed or refractory PTCL in the Phase 2a portion of the trial at the established MTD to assess preliminary efficacy of PDX and gemcitabine.

PDX in the treatment of cutaneous T-cell lymphoma

        Cutaneous T-cell lymphomas, or CTCL, are comprised of a number of non-Hodgkin's T-cell lymphomas, including mycosis fungoides and Sezary syndrome, which have their primary manifestations in the skin. According to the Lymphoma Research Foundation, CTCL accounts for approximately 2% to 3% of the estimated 63,000 new cases of NHL diagnosed each year in the United States.

        In August 2007, we initiated patient enrollment in a Phase 1, open-label, multi-center study of PDX with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory CTCL. In this study, patients with either relapsed or refractory CTCL will receive PDX as part of a weekly schedule for two or three weeks followed by one week of rest. Patients will receive starting doses of PDX at 30 mg/m², with dose reduction in subsequent cohorts based on toxicity. We plan to enroll up to 56 evaluable patients in the study with the objective of determining the optimal dose and safety profile of PDX in this population. We plan to enroll at least 20 of these patients at what we believe to be the optimal dose and schedule.

PDX in the treatment of non-small cell lung cancer

        Lung cancer is the most common cause of cancer death in the United States. According to the American Cancer Society, an estimated 213,380 new cases of lung cancer were expected to be diagnosed in 2007. Non-small cell lung cancer, or NSCLC, is the most common type of lung cancer, accounting for almost 80% of lung cancer cases. More people die of lung cancer than of breast, prostate and colorectal cancers combined.

        Over the last decade, oncologists have begun treating advanced NSCLC patients more aggressively, typically administering a potent combination of paclitaxel and carboplatin. Other drugs used in this setting include gemcitabine, vinorelbine, docetaxel and cisplatin. Despite aggressive therapy using gemcitabine and vinorelbine, one study found that the one-year survival rate for patients with Stage IIIB or IV NSCLC was approximately 40%.

        In January 2008, we initiated patient enrollment in a Phase 2b, randomized, multi-center study comparing PDX and Tarceva® (erlotinib), both with vitamin B₁₂ and folic acid supplementation, in patients with Stage IIIB/IV NSCLC who are, or have been, cigarette smokers who have failed treatment with at least one prior platinum-based chemotherapy regimen. The objective of this study is to compare the efficacy of PDX to that of Tarceva in patients with Stage IIIB/IV NSCLC. The primary endpoint of the study is overall survival. Secondary endpoints include response rate and progression-free survival, both compared to Tarceva, and the safety and tolerability of PDX. The study will seek to enroll approximately 160 patients in up to 50 investigative sites worldwide. Patients will be randomized 1:1 to either the PDX arm or the Tarceva arm. Patients randomized to the PDX arm will receive PDX as an intravenous, or IV, push administered on days 1 and 15 of a 4-week/28 day cycle. The initial dose of PDX will be 230 mg/m², which, based on defined criteria, may be increased to 270 mg/m² or reduced in 40 mg/m² decrements. Patients randomized to the Tarceva arm will receive Tarceva 150 mg/day orally daily for the 4-week/28 day cycle. Patients in both arms will receive concurrent vitamin therapy of B₁₂ and folic acid.

        Our decision to begin this study was based, in part, upon data from a Phase 2 open-label, single-agent study of PDX in patients with relapsed or refractory Stage IIIB or IV NSCLC completed in 2001 by Memorial Sloan-Kettering Cancer Center, or MSKCC, one of the institutions from which we licensed PDX. This study demonstrated a response rate of 10%, a median time to progression of three

8

months and a median survival time of 13.5 months. However, 21% of the patients suffered grade 3 or 4 stomatitis, or mouth ulcers. As a result of subsequent research that suggested supplementation of PDX with folic acid and vitamin B₁₂ may reduce the incidence of clinically significant stomatitis, in January 2005 we initiated a Phase 1 dose escalation study of PDX with vitamin B₁₂ and folic acid supplementation in patients with previously treated (Stage IIIB/IV) advanced NSCLC.

        In October 2007, data from this ongoing Phase 1 study were presented at the AACR-NCI-EORTC conference. In the study, a total of 22 patients with relapsed or refractory NSCLC were treated at doses of 150 to 325 mg/m² of PDX. The MTD was determined to be 270 mg/m², which is nearly twice the dose used in the previous Phase 2 study discussed above in which PDX was administered without vitamin supplementation, and what we believe to be clinically significant radiologic responses were observed. Greater than 50% of patients (¹³/22) received two or more prior treatment regimens. The MTD determined in this study was used to establish the dosing regimen for our current Phase 2b study in patients with Stage IIIB/IV NSCLC.

PDX in the treatment of other solid tumor indications

        In addition to our ongoing NSCLC studies, we intend to initiate a Phase 2, single-agent study of PDX in another solid tumor indication in the first half of 2008 and additional Phase 1 combination studies with PDX in solid tumor indications by year end.

RH1

        RH1 is a small molecule chemotherapeutic agent that we believe is bioactivated by the enzyme DT-diaphorase, or DTD, also known as NAD(P)H quinone oxidoreductase, or NQ01. We believe DTD is over-expressed in many tumors, relative to normal tissue, including lung, colon, breast and liver tumors. We believe that because RH1 is bioactivated in the presence of DTD, it has the potential to provide targeted drug delivery to these tumor types while limiting the amount of toxicity to normal tissue.

        In November 2007, we initiated patient enrollment in a Phase 1, open-label, multi-center dose escalation study of RH1 in patients with advanced solid tumors or NHL. In this study, patients with either advanced solid tumors or NHL will receive a 3-hour IV infusion of RH1 administered once every 21 days. Patients will receive starting doses of RH1 at 1.5 mg/m², with dose escalation in subsequent cohorts based on toxicity. We plan to enroll up to 60 evaluable patients in the study with the objective of determining the MTD, recommended Phase 2 dose and safety profile of RH1 in this population. We plan to enroll three to six patients per cohort. Once we determine what we believe to be the optimal dose and schedule, we plan to recruit an expanded cohort of up to 24 evaluable patients who have tumor types with a high likelihood of DTD over-expression to explore possible markers of anticancer activity.

EFAPROXYN™ (efaproxiral) Development Discontinued

        In mid-2007, we discontinued the development of EFAPROXYN, our former lead product candidate, after announcing top-line results from ENRICH, a Phase 3 clinical trial of EFAPROXYN plus whole brain radiation therapy, or WBRT, in women with brain metastases originating from breast cancer. The study failed to achieve its primary endpoint of demonstrating a statistically significant improvement in overall survival in patients receiving EFAPROXYN plus WBRT, compared to patients receiving WBRT alone. We are currently pursuing the sale of our rights to EFAPROXYN although we may not receive any material consideration for any sale.

9

Manufacturing

        The production of PDX and RH1 employ small molecule organic chemistry procedures standard for the pharmaceutical industry. We plan to continue to outsource manufacturing responsibilities for these and any additional future products, and we intend to select and rely, at least initially, on single source suppliers to manufacture each of our product candidates. We believe this manufacturing strategy allows us to direct our financial and managerial resources to the development and commercialization of products rather than to the establishment of a manufacturing infrastructure. We believe it also enables us to minimize fixed costs and capital expenditures, while gaining access to advanced manufacturing process capabilities and expertise. However, if our third party suppliers become unable or unwilling to provide sufficient future drug supply or meet regulatory requirements relating to the manufacture of pharmaceutical agents, we would be forced to incur additional expenses to secure alternative third party manufacturing arrangements and may suffer delays in our ability to conduct clinical trials or commercialize these products.

PDX

        We have entered into arrangements with one third party manufacturer to produce PDX bulk drug substance and another third party manufacturer to produce formulated drug product for use in our clinical development programs. We believe these third party manufacturers have the capability to meet our requirements for all future clinical trial requirements. As we continue to advance our PDX development program, we will seek to establish appropriate commercial supply arrangements for the production of PDX bulk drug substance and formulated drug product.

RH1

        We have entered into arrangements with one third party manufacturer to produce RH1 bulk drug substance and another third party manufacturer to produce formulated drug product for use in our clinical development programs. We believe these third party manufacturers have the capability to meet our requirements for all planned future clinical trial requirements.

Sales and Marketing

        We currently retain exclusive worldwide commercial rights to all of our product candidates for all target indications. If and when we obtain FDA approval, we intend to commercialize our product candidates in the United States by building a focused sales and marketing organization which may be complemented by co-promotion arrangements with pharmaceutical or biotechnology partners, where appropriate. Our sales and marketing strategy is to:

•

Build a United States sales force.  We believe that a moderate-sized sales force could effectively reach targeted physicians and medical institutions that treat the majority of patients with PTCL in the United States. We intend to build and manage this sales force internally.



•

Build a marketing organization.  We also plan to build an internal marketing and sales operations organization to develop and implement product plans, and support our sales force and marketing partners.



•

Establish co-promotion alliances.  We intend to enter into co-promotion or out-licensing arrangements with other pharmaceutical or biotechnology firms, where necessary, to reach foreign market segments that are not reachable by a United States-based sales force or when deemed strategically and economically advisable.

10

Intellectual Property

        We believe that patent protection and trade secret protection are important to our business and that our future success will depend, in part, on our ability to maintain our technology licenses, maintain trade secret protection, obtain and maintain patents and operate without infringing the proprietary rights of others both in the United States and abroad. We believe that obtaining identical patents and protection periods for a given technology throughout all markets of the world will be difficult because of differences in patent laws. In addition, the protection provided by non-United States patents, if any, may be weaker than that provided by United States patents.

        In order to protect the confidentiality of our technology, including trade secrets and know-how and other proprietary technical and business information, we require all of our employees, consultants, advisors and collaborators to enter into confidentiality agreements that prohibit the use or disclosure of confidential information. The agreements also oblige our employees, consultants, advisors and collaborators to assign to us ideas, developments, discoveries and inventions made by such persons in connection with their work with us. We cannot be sure that these agreements will maintain confidentiality, will prevent disclosure, or will protect our proprietary information or intellectual property, or that others will not independently develop substantially equivalent proprietary information or intellectual property.

        The pharmaceutical industry is highly competitive and patents have been applied for by, and issued to, other parties relating to products or new technologies that may be competitive with those being developed by us. Therefore, our product candidates may give rise to claims that they infringe the patents or proprietary rights of other parties now or in the future. Furthermore, to the extent that we, our consultants, or manufacturing and research collaborators, use intellectual property owned by others in work performed for us, disputes may also arise as to the rights to such intellectual property or in related or resulting know-how and inventions. An adverse claim could subject us to significant liabilities to such other parties and/or require disputed rights to be licensed from such other parties. A license required under any such patents or proprietary rights may not be available to us, or may not be available on acceptable terms. If we do not obtain such licenses, we may encounter delays in product market introductions, or may find that we are prevented from the development, manufacture or sale of products requiring such licenses. In addition, we could incur substantial costs in defending ourselves in legal proceedings instituted before patent and trademark offices in the United States, the European Union, or other ex-United States territories, or in a suit brought against us by a private party based on such patents or proprietary rights, or in a suit by us asserting our patent or proprietary rights against another party, even if the outcome is not adverse to us.

PDX

        In December 2002, we entered into a license agreement with Memorial Sloan-Kettering Cancer Center, SRI International and Southern Research Institute, as amended, under which we obtained exclusive worldwide rights to a portfolio of patents and patent applications related to PDX (pralatrexate) and its uses. The portfolio currently consists of two issued patents in the U.S., one granted patent application in Europe, and pending patent applications in the U.S., Canada, Europe, Australia, Japan, China, Brazil, Indonesia, India, South Korea, Mexico, Norway, New Zealand, the Philippines, Singapore, and South Africa. The licensed patents and applications, which expire at various times between July 2017 and May 2025, contain claims covering pralatrexate substantially free of 10-deazaaminopterin, methods to treat tumors with pralatrexate substantially free of 10-deazaaminopterin, treatment of breast, lung, and prostate cancer and leukemia with a combination of pralatrexate and a taxane, treatment of T-cell lymphoma with pralatrexate, treatment of lymphoma with a combination of pralatrexate and gemcitabine, methods of assessing sensitivity of a tumor to pralatrexate, and other methods and compositions.

11

        Under the terms of the agreement, we paid an up-front license fee of $2.0 million upon execution of the agreement and are also required to make certain additional cash payments based upon the achievement of certain clinical development or regulatory milestones or the passage of certain time periods. To date, we have made aggregate milestone payments of $2.0 million based on the passage of time. In the future, we will make aggregate milestone payments of $1.0 million upon the earlier of achievement of a clinical development milestone or the passage of certain time periods (the "Clinical Milestone"), and up to $10.3 million upon achievement of certain regulatory milestones, including regulatory approval to market PDX in the United States or Europe. The next scheduled payments toward the Clinical Milestone of $500,000 each are currently due on December 23, 2008 and 2009. The up-front license fee and all milestone payments under the agreement have been or will be recorded to research and development expense when incurred. Under the terms of the agreement, we are required to fund all development programs and will have sole responsibility for all commercialization activities. In addition, we will pay the licensors a royalty based on a percentage of net revenues arising from sales of the product or sublicense revenues arising from sublicensing the product, if and when such sales or sublicenses occur.

RH1

        In December 2004, we entered into an agreement with the University of Colorado Health Sciences Center, the University of Salford and Cancer Research Technology ("CRT"), under which we obtained exclusive worldwide rights to certain intellectual property surrounding a proprietary molecule known as RH1. Under the terms of the agreement, we paid an up-front license fee of $190,500 upon execution of the agreement and are also required to make certain additional cash payments based upon the achievement of certain clinical development, regulatory and commercialization milestones. We could make aggregate milestone payments of up to $9.2 million upon the achievement of the clinical development, regulatory and commercialization milestones set forth in the agreement. The up-front license fee and all milestone payments under the agreement, as well as the one-time data option fee discussed below, have been or will be recorded to research and development expense when incurred. Under the terms of the agreement and related data option agreement, we paid the licensors a one-time data option fee of $360,000 in 2007, for an exclusive license to the results of a Phase 1 study sponsored by Cancer Research UK, CRT's parent institution. This Phase 1 study was completed in 2007 and, under the terms of the agreement, we have since assumed responsibility for all future development costs and activities and have sole responsibility for all commercialization activities. In addition, we will pay the licensors a royalty based on a percentage of net revenues arising from sales of the product or sublicense revenues arising from sublicensing the product, if and when such sales or sublicenses occur.

Competition

        The pharmaceutical industry is characterized by rapidly evolving technology and intense competition. Many companies of all sizes, including a number of large pharmaceutical companies and several biotechnology companies, are developing cancer therapies similar to ours. There are products and technologies currently on the market that will compete directly with the products that we are developing. In addition, colleges, universities, governmental agencies and other public and private research institutions will continue to conduct research and are becoming more active in seeking patent protection and licensing arrangements to collect license fees, milestone payments and royalties in exchange for license rights to technologies that they have developed, some of which may directly compete with our technologies. These companies and institutions also compete with us in recruiting qualified scientific personnel. Many of our competitors have substantially greater financial, research and development, human and other resources than do we. Furthermore, large pharmaceutical companies

12

may have significantly more experience than we do in preclinical testing, human clinical trials, manufacturing, regulatory approval and commercialization procedures. Our competitors may:

•

develop or acquire safer and/or more effective products;



•

obtain patent protection or intellectual property rights that limit our ability to commercialize products; and/or



•

commercialize products earlier or more effectively than us.

        We expect technology developments in our industry to continue to occur at a rapid pace. Commercial developments by our competitors may render some or all of our potential products obsolete or non-competitive, which would have a material adverse effect on our business and financial condition.

        While there are currently no FDA-approved agents in the United States indicated for the treatment of PTCL, we are aware of multiple investigational agents that are currently being studied in clinical trials. There are also several agents and regimens, such as CHOP, that are currently used by physicians without an FDA label in PTCL that could potentially represent competition for PDX.

Government Regulation

FDA Regulation and Product Approval

        The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion of our product candidates.

        The process required by the FDA before our product candidates may be marketed in the United States generally involves the following:

•

preclinical laboratory and animal tests;



•

submission to the FDA of an Investigational New Drug, or IND, application, which must become effective before clinical trials may begin;



•

adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed pharmaceutical in our intended use;



•

pre-approval inspection of manufacturing facilities and selected clinical investigators; and



•

submission to the FDA of a New Drug Application, or NDA, that must be approved.

        The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all.

        Preclinical tests include laboratory evaluation of the product candidate, its chemistry, formulation and stability, as well as animal studies to assess its potential safety and efficacy. We then submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of an IND application, which must become effective before we may begin human clinical trials. The IND automatically becomes effective 30 days after the FDA acknowledges that the filing is complete, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the trials as outlined in the IND. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. Further, an independent Institutional

13

Review Board at each medical center proposing to conduct the clinical trials must review and approve any clinical study.

        Human clinical trials are typically conducted in three sequential phases, which may overlap:

•

Phase 1: The drug is initially administered into healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.



•

Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to determine the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.



•

Phase 3: When Phase 2 evaluations demonstrate that a dosage range of the drug is effective and has an acceptable safety profile, Phase 3 trials are undertaken to further evaluate dosage, clinical efficacy and to further test for safety in an expanded patient population at geographically dispersed clinical study sites.

        In the case of product candidates for severe or life-threatening diseases such as cancer, the initial human testing is often conducted in patients rather than in healthy volunteers. Since these patients already have the target disease, these studies may provide initial evidence of efficacy traditionally obtained in Phase 2 trials and thus these trials are frequently referred to as Phase 1b trials. Additionally, when product candidates can do damage to normal cells, it is not ethical to administer such drugs to healthy patients in a Phase 1 trial.

        We cannot be certain that we will successfully complete Phase 1, Phase 2 or Phase 3 testing of our product candidates within any specific time period, if at all. Furthermore, the FDA, the Institutional Review Boards or the sponsor may suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

        The results of product development, preclinical studies and clinical studies are submitted to the FDA as part of an NDA for approval of the marketing and commercial shipment of the product candidate. The FDA may deny an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data. Even if such data is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Once issued, the FDA may withdraw product approval if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. In addition, the FDA may require testing and surveillance programs to monitor the effect of approved products which have been commercialized, and the agency has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs.

        Satisfaction of the above FDA requirements or similar requirements of state, local and foreign regulatory agencies typically takes several years and the actual time required may vary substantially, based upon the type, complexity and novelty of the pharmaceutical product candidate. Government regulation may delay or prevent marketing of potential products for a considerable period of time and impose costly procedures upon our activities.

        We cannot be certain that the FDA or any other regulatory agency will grant approval for any of our product candidates on a timely basis, if at all. Success in preclinical or early stage clinical trials does not assure success in later stage clinical trials. Data obtained from preclinical and clinical activities is not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. Even if a product candidate receives regulatory approval, the approval may be significantly limited to specific indications. Further, even after regulatory approval is obtained, later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. Delays in obtaining, or failures to obtain regulatory approvals for any of our product candidates, including PDX, would have a material adverse effect on our business. Marketing our product candidates abroad will require similar regulatory

14

approvals and is subject to similar risks. In addition, we cannot predict what adverse governmental regulations may arise from future United States or foreign governmental action.

        Any products manufactured or distributed by us pursuant to FDA clearances or approvals are subject to pervasive and continuing regulation by the FDA, including record-keeping requirements and reporting of adverse experiences with the drug. Our third-party drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with current Good Manufacturing Practices, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. We cannot be certain that we or our present or future suppliers will be able to comply with the current Good Manufacturing Practices and other FDA regulatory requirements.

        The FDA regulates drug labeling and promotion activities. The FDA has actively enforced regulations prohibiting the marketing of products for unapproved uses. Under the Modernization Act of 1997, the FDA will permit the promotion of a drug for an unapproved use in certain circumstances, but subject to very stringent requirements.

        Our product candidates are also subject to a variety of state laws and regulations in those states or localities where such product candidates may be marketed. Any applicable state or local regulations may hinder our ability to market our product candidates in those states or localities.

        The FDA's policies may change and additional government regulations may be enacted in the future which could prevent or delay regulatory approval of our potential products. Moreover, increased attention to the containment of health care costs in the United States and in foreign markets could result in new government regulations, which could have a material adverse effect on our business. We cannot predict the likelihood, nature or extent of adverse governmental regulation, which might arise from future legislative or administrative action, either in the United States or abroad.

Foreign Regulation and Product Approval

        Outside the United States, our ability to market a product candidate is contingent upon receiving marketing authorization from the appropriate regulatory authorities. The requirements governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely from country to country. At present, foreign marketing authorizations are applied for at a national level, although within the European Union, or EU, centralized registration procedures are available to companies wishing to market a product in more than one EU member state. If the regulatory authority is satisfied that adequate evidence of safety, quality and efficacy has been presented, a marketing authorization will be granted. In some countries in the EU, pricing of prescription drugs is subject to government control and agreements must be reached on a national level before marketing may begin in that territory. If we are unable to reach agreement on an acceptable price for our products, we may choose not to pursue marketing of our drugs in that territory. The foreign regulatory approval process involves all of the risks associated with FDA approval discussed above.

Other Regulations

        We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.

15

Results of Operations

        We are a development stage company. Since our inception in 1992, we have not generated any revenue from product sales and have experienced significant net losses and negative cash flows from operations. We have incurred these losses principally from costs incurred in our research and development programs, our clinical manufacturing, and from our marketing, general and administrative expenses. Our primary business activities have been focused on the development of EFAPROXYN (a program which we discontinued in mid-2007), PDX and RH1. For the years ended December 31, 2007, 2006 and 2005, we had net losses attributable to common stockholders of $39.4 million, $30.2 million, and $20.8 million, respectively. Research and development expenses for the years ended December 31, 2007, 2006 and 2005 were $17.4 million, $14.3 million and $11.2 million, respectively. As of December 31, 2007, we had accumulated a deficit during our development stage of $247.9 million.

        Our ability to generate revenue and achieve profitability is dependent on our ability, alone or with partners, to successfully complete the development of our product candidates, conduct clinical trials, obtain the necessary regulatory approvals, and manufacture and market our product candidates. The timing and costs to complete the successful development of any of our product candidates are highly uncertain, and therefore difficult to estimate. The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, require the expenditure of substantial resources. For a more complete discussion of the regulatory approval process, please refer to the "Government Regulation" section above. Clinical development timelines, likelihood of success and total costs vary widely and are impacted by a variety of risks and uncertainties discussed in the "Risk Factors" section of Item 1A below. Because of these risks and uncertainties, we cannot predict when or whether we will successfully complete the development of any of our product candidates or the ultimate costs of such efforts. Due to these same factors, we cannot be certain when, or if, we will generate any revenue or net cash inflow from any of our current product candidates.

        Even if our clinical trials demonstrate the safety and effectiveness of our product candidates in their target indications, we do not expect to be able to record commercial sales of any of our product candidates until 2009 at the earliest. We expect to incur significant and growing net losses for the foreseeable future as a result of our research and development programs and the costs of preparing for the potential commercial launch of PDX. Although the size and timing of our future net losses are subject to significant uncertainty, we expect them to increase over the next several years as we continue to fund our development programs and prepare for the potential commercial launch of PDX.

        We will be required to raise additional capital to support our future operations, including the potential commercialization of PDX in the event the PROPEL trial is positive and we obtain regulatory approval to market PDX. We may seek to obtain this additional capital through arrangements with corporate partners, equity or debt financings, or from other sources. Such arrangements, if successfully consummated, may be dilutive to our existing stockholders. However, there is no assurance that we will be successful in consummating any such arrangements. In addition, in the event that additional funds are obtained through arrangements with collaborative partners or other sources, such arrangements may require us to relinquish rights to some of our technologies, product candidates or products under development that we would otherwise seek to develop or commercialize ourselves. If we are unable to generate meaningful amounts of revenue from future product sales, if any, or cannot otherwise raise sufficient additional funds to support our operations, we may be required to delay, reduce the scope of or eliminate one or more of our development programs and our business and future prospects for revenue and profitability may be harmed.

        We incorporated in the Commonwealth of Virginia on September 1, 1992 as HemoTech Sciences, Inc. and filed amended Articles of Incorporation to change our name to Allos Therapeutics, Inc. on October 19, 1994. We reincorporated in Delaware on October 28, 1996. We operate as a single business segment.

16

Employees

        As of February 20, 2008, we had a total of 66 full-time employees. Of those, 40 are engaged in clinical development, regulatory affairs, biostatistics, manufacturing and preclinical development. The remaining 26 are involved in marketing, corporate development, finance, administration and operations.

Available Information

        We are located in Westminster, Colorado, a suburb of Denver. Our mailing address is 11080 CirclePoint Road, Suite 200, Westminster, Colorado 80020. Our website address is www.allos.com; however, information found on our website is not incorporated by reference into this report. Our web site address is included in this report as an inactive textual reference only. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through our website as soon as reasonably practicable after we file them with, or furnish them to, the SEC. Once at www.allos.com, go to Investors/Media and then to SEC Filings. You may also read and copy materials that we file with SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically with the SEC.

ITEM 1A.    RISK FACTORS

Our business faces significant risks. These risks include those described below and may include additional risks of which we are not currently aware or which we currently do not believe are material. If any of the events or circumstances described in the following risk factors actually occurs, they may materially harm our business, financial condition, operating results and cash flow. As a result, the market price of our common stock could decline. Additional risks and uncertainties that are not yet identified or that we think are immaterial may also materially harm our business, operating results and financial condition. The following risks should be read in conjunction with the other information set forth in this report.

We have a history of net losses and an accumulated deficit, and we may never generate revenue or achieve or maintain profitability in the future.

        Since our inception in 1992, we have not generated any revenue from product sales and have experienced significant net losses and negative cash flows from operations. To date, we have financed our operations primarily through the private and public sale of securities. For the years ended December 31, 2007, 2006 and 2005, we had net losses attributable to common stockholders of $39.4 million, $30.2 million, and $20.8 million, respectively. As of December 31, 2007, we had accumulated a deficit during our development stage of $247.9 million. We have incurred these losses principally from costs incurred in our research and development programs, clinical manufacturing and from our marketing, general and administrative expenses. We expect to continue incurring net losses for the foreseeable future. Our ability to generate revenue and achieve profitability is dependent on our ability, alone or with partners, to successfully complete the development of our product candidates, conduct clinical trials, obtain the necessary regulatory approvals, and manufacture and market our product candidates. We may never generate revenue from product sales or become profitable. We expect to continue to spend substantial amounts on research and development, including amounts spent on conducting clinical trials for our product candidates, and in preparing for the potential commercial launch of our product candidates. We may not be able to continue as a going concern if we are unable to generate meaningful amounts of revenue to support our operations or cannot otherwise raise the necessary funds to support our operations.

17

Our near-term prospects are substantially dependent on PDX, our lead product candidate. If we are unable to successfully develop and obtain regulatory approval for PDX for the treatment of patients with relapsed or refractory PTCL, our ability to generate revenue will be significantly delayed.

        We currently have no products that are approved for commercial sale. Our product candidates are in various stages of development, and significant research and development, financial resources and personnel will be required to develop commercially viable products and obtain regulatory approvals for them. Most of our efforts and expenditures over the next few years will be devoted to PDX. Accordingly, our future prospects are substantially dependent on the successful development, regulatory approval and commercialization of PDX for the treatment of patients with relapsed or refractory PTCL. PDX is not expected to be commercially available for this or any other indication until at least 2009. RH1 is in an earlier stage of development relative to PDX, and if both PDX and RH1 are approved for marketing, we expect that RH1 would not be commercially available until after PDX is commercially available. Further, certain of the indications that we are pursuing have relatively low incidence rates, which may make it difficult for us to enroll a sufficient number of patients in our clinical trials on a timely basis, or at all, and may limit the revenue potential of our product candidates. If we are unable to successfully develop, obtain regulatory approval for and commercialize PDX for the treatment of relapsed or refractory PTCL, our ability to generate revenue from product sales will be significantly delayed and our stock price would likely decline.

We cannot predict when or if we will obtain regulatory approval to commercialize our product candidates.

        A pharmaceutical product cannot be marketed in the United States or most other countries until it has completed a rigorous and extensive regulatory approval process. If we fail to obtain regulatory approval to market our product candidates, we will be unable to sell our products and generate revenue, which would jeopardize our ability to continue operating our business. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product and requires the expenditure of substantial resources. Of particular significance are the requirements covering research and development, testing, manufacturing, quality control, labeling and promotion of drugs for human use. We may not obtain regulatory approval for any product candidates we develop, including PDX, even though PROPEL may be positive and we have a SPA agreement, or we may not obtain regulatory review of such product candidates in a timely manner.

If our product candidates, including PDX, fail to meet safety and efficacy endpoints in clinical trials, they will not receive regulatory approval, and we will be unable to market them.

        Our product candidates may not prove to be safe and efficacious in clinical trials and may not meet all of the applicable regulatory requirements needed to receive regulatory approval. The clinical development and regulatory approval process is extremely expensive and takes many years. Failure can occur at any stage of development, and the timing of any regulatory approval cannot be accurately predicted.

        We currently expect to complete patient enrollment in our pivotal Phase 2 PROPEL trial in the second quarter of 2008, although the actual timing of completion of enrollment may vary based on a number of factors, including site initiation and patient enrollment rates. We cannot assure you that the design of, or data collected from, the PROPEL trial will be adequate to demonstrate the safety and efficacy of PDX for the treatment of patients with relapsed or refractory PTCL, or otherwise be sufficient to support FDA or any foreign regulatory approval, even though PROPEL may be positive and we have a SPA agreement. If the PROPEL trial fails to achieve its safety and efficacy endpoints, we may be unable to obtain regulatory approval to commercialize PDX, and our business and stock price would be harmed. If we fail to obtain regulatory approval for PDX or any of our other current or

18

future product candidates, we will be unable to market and sell them and therefore may never generate meaningful amounts of revenue or become profitable.

        As part of the regulatory process, we must conduct clinical trials for each product candidate to demonstrate safety and efficacy to the satisfaction of the FDA and other regulatory authorities abroad. The number and design of clinical trials that will be required varies depending on the product candidate, the condition being evaluated, the trial results and regulations applicable to any particular product candidate. The design of our clinical trials is based on many assumptions about the expected effect of our product candidates, and if those assumptions prove incorrect, the clinical trials may not demonstrate the safety or efficacy of our product candidates. Preliminary results may not be confirmed upon full analysis of the detailed results of a trial, and prior clinical trial program designs and results may not be predictive of future clinical trial designs or results. Product candidates in later stage clinical trials may fail to show the desired safety and efficacy despite having progressed through initial clinical trials with acceptable endpoints. For example, we terminated the development of EFAPROXYN when it failed to demonstrate statistically significant improvement in overall survival in the targeted patients in a Phase 3 clinical trial. If our product candidates fail to show clinically significant benefits, they will not be approved for marketing.

We may experience delays in our clinical trials that could adversely affect our financial position and our commercial prospects.

        We do not know when our current clinical trials, including our PROPEL trial, will be completed, if at all. We also cannot accurately predict when other planned clinical trials will begin or be completed. Many factors affect patient enrollment, including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, competing clinical trials and new drugs approved for the conditions we are investigating. Other companies are conducting clinical trials and have announced plans for future trials that are seeking or likely to seek patients with the same diseases as those we are studying. Competition for patients in some cancer trials is particularly intense because of the limited number of leading specialist physicians and the geographic concentration of major clinical centers.

        As a result of the numerous factors which can affect the pace of progress of clinical trials, our trials may take longer to enroll patients than we anticipate, if they can be completed at all. Delays in patient enrollment in the trials may increase our costs and slow our product development and approval process. Our product development costs will also increase if we need to perform more or larger clinical trials than planned. If other companies' product candidates show favorable results, we may be required to conduct additional clinical trials to address changes in treatment regimens or for our products to be commercially competitive. Any delays in completing our clinical trials will delay our ability to generate revenue from product sales, and we may have insufficient capital resources to support our operations. Even if we do have sufficient capital resources, our ability to become profitable will be delayed.

While we have negotiated a special protocol assessment with the FDA relating to our PROPEL trial, this agreement does not guarantee any particular outcome from regulatory review of the trial or the product, including any regulatory approval.

        The protocol for the PROPEL trial was reviewed by the FDA under the special protocol assessment, or SPA, process, which allows for FDA evaluation of a clinical trial protocol intended to form the primary basis of an efficacy claim in support of a new drug application, and provides an agreement that the study design, including trial size, clinical endpoints and/or data analyses are acceptable to the FDA. However, even if we believe PROPEL is positive, a SPA agreement is not a guarantee of approval, and we cannot be certain that the design of, or data collected from, the PROPEL trial will be adequate to demonstrate the safety and efficacy of PDX for the treatment of patients with relapsed or refractory PTCL, or otherwise be sufficient to support FDA or any foreign

19

regulatory approval. Further, the SPA agreement is not binding on the FDA if public health concerns unrecognized at the time the SPA agreement is entered into become evident, other new scientific concerns regarding product safety or efficacy arise, or if we fail to comply with the agreed upon trial protocols. In addition, the SPA agreement may be changed by us or the FDA on written agreement of both parties, and the FDA retains significant latitude and discretion in interpreting the terms of the SPA agreement and the data and results from the PROPEL trial. As a result, we do not know how the FDA will interpret the parties' respective commitments under the SPA agreement, how it will interpret the data and results from the PROPEL trial, or whether PDX will receive any regulatory approvals as a result of the SPA agreement or the clinical trial. Therefore, despite the potential benefits of the SPA agreement, significant uncertainty remains regarding the clinical development and regulatory approval process for PDX for the treatment of PTCL.

We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the trials are not well designed.

        Clinical trials must be conducted in accordance with the FDA's Good Clinical Practices and are subject to oversight by the FDA and Institutional Review Boards at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with product candidates produced under the FDA's Good Manufacturing Practices, and may require large numbers of test subjects. Clinical trials may be suspended by the FDA or us at any time if it is believed that the subjects participating in these trials are being exposed to unacceptable health risks or if the FDA finds deficiencies in the conduct of these trials.

        Even if we achieve positive interim results in clinical trials, these results do not necessarily predict final results, and acceptable results in early trials may not be repeated in later trials. Data obtained from preclinical and clinical activities are susceptible to varying interpretations that could delay, limit or prevent regulatory clearances, and the FDA can request that we conduct additional clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. As a result, there can be no assurance that our PROPEL trial will achieve its primary or secondary endpoints. In addition, negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial to be repeated or terminated. Also, failure to construct clinical trial protocols to screen patients for risk profile factors relevant to the trial for purposes of segregating patients into the patient populations treated with the drug being tested and the control group could result in either group experiencing a disproportionate number of adverse events and could cause a clinical trial to be repeated or terminated. If we have to conduct additional clinical trials, whether for PDX or any other product candidate, it would significantly increase our expenses and delay potential marketing of our product candidates.

Reports of adverse events or safety concerns involving our product candidates or in related technology fields or other companies' clinical trials could delay or prevent us from obtaining regulatory approval or negatively impact public perception of our product candidates.

        Our product candidates may produce serious adverse events. These adverse events could interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory authorities denying approval of our product candidates for any or all targeted indications. An independent data safety monitoring board, the FDA, other regulatory authorities or the Company may suspend or terminate clinical trials at any time. We cannot assure you that any of our product candidates will be safe for human use.

        At present, there are a number of clinical trials being conducted by other pharmaceutical companies involving small molecule chemotherapeutic agents. If other pharmaceutical companies announce that they observed frequent adverse events or unknown safety issues in their trials involving

20

compounds similar to, or competitive with, our product candidates, we could encounter delays in the timing of our clinical trials or difficulties in obtaining the approval of our product candidates. In addition, the public perception of our product candidates might be adversely affected, which could harm our business and results of operations and cause the market price of our common stock to decline, even if the concern relates to another company's product or product candidate.

Due to our reliance on contract research organizations and other third parties to conduct our clinical trials, we are unable to directly control the timing, conduct and expense of our clinical trials.

        We rely primarily on third parties to conduct our clinical trials, including the PROPEL trial. As a result, we have had and will continue to have less control over the conduct of our clinical trials, the timing and completion of the trials, the required reporting of adverse events and the management of data developed through the trial than would be the case if we were relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Outside parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting their willingness or ability to conduct our trials. We may experience unexpected cost increases that are beyond our control. Problems with the timeliness or quality of the work of a contract research organization may lead us to seek to terminate the relationship and use an alternative service provider. However, making this change may be costly and may delay our trials, and contractual restrictions may make such a change difficult or impossible. Additionally, it may be impossible to find a replacement organization that can conduct our trials in an acceptable manner and at an acceptable cost.

Even if our product candidates meet safety and efficacy endpoints in clinical trials, regulatory authorities may not approve them, or we may face post-approval problems that require withdrawal of our products from the market.

        We will not be able to commercialize any of our product candidates until we have obtained regulatory approval. We have limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may place us at risk of delays, overspending and human resources inefficiencies.

        Our product candidates may not be approved even if they achieve their endpoints in clinical trials. Regulatory agencies, including the FDA or their advisors, may disagree with our interpretations of data from preclinical studies and clinical trials. Regulatory agencies also may approve a product candidate for fewer conditions than requested or may grant approval subject to the performance of post-marketing studies for a product candidate. In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates.

        Even if we receive regulatory approvals, our product candidates may later produce adverse events that limit or prevent their widespread use or that force us to withdraw those product candidates from the market. In addition, a marketed product continues to be subject to strict regulation after approval and may be required to undergo post-approval studies. Any unforeseen problems with an approved product or any violation of regulations could result in restrictions on the product, including its withdrawal from the market. Any delay in or failure to receive or maintain regulatory approval for any of our products could harm our business and prevent us from ever generating meaningful revenues or achieving profitability.

21

Even if we receive regulatory approval for our product candidates, we will be subject to ongoing regulatory obligations and review.

        Following any regulatory approval of our product candidates, we will be subject to continuing regulatory obligations such as safety reporting requirements and additional post-marketing obligations, including regulatory oversight of the promotion and marketing of our products. In addition, we or our third-party manufacturers will be required to adhere to regulations setting forth current Good Manufacturing Practices. These regulations cover all aspects of the manufacturing, storage, testing, quality control and record keeping relating to our product candidates. Furthermore, we or our third-party manufacturers must pass a pre-approval inspection of manufacturing facilities by the FDA and foreign authorities before obtaining marketing approval and will be subject to periodic inspection by these regulatory authorities. Such inspections may result in compliance issues that could prevent or delay marketing approval, or require the expenditure of financial or other resources to address. If we or our third-party manufacturers fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Budget constraints may force us to delay our efforts to develop certain product candidates in favor of developing others, which may prevent us from commercializing all product candidates as quickly as possible.

        Because we have limited resources, and because research and development is an expensive process, we must regularly assess the most efficient allocation of our research and development budget. As a result, we may have to prioritize development candidates and may not be able to fully realize the value of some of our product candidates in a timely manner, if at all.

If we fail to obtain the capital necessary to fund our operations, we will be unable to successfully develop or commercialize our product candidates.

        We expect that significant additional capital will be required in the future to continue our research and development efforts and to commercialize our product candidates, if approved for marketing. Our actual capital requirements will depend on many factors, including:

•

the timing and outcome of our ongoing PROPEL trial;



•

costs associated with the commercialization of our product candidates, if approved for marketing;



•

our evaluation of, and decisions with respect to, additional therapeutic indications for which we may develop PDX;



•

our evaluation of, and decisions with respect to, our strategic alternatives; and



•

costs associated with securing potential in-license opportunities and additional product candidates and conducting preclinical research and clinical development for our product candidates.

        We will be required to raise additional capital to support our future operations, including the potential commercialization of PDX in the event the PROPEL trial is positive and we obtain regulatory approval to market PDX. We may seek to obtain this additional capital through arrangements with corporate partners, equity or debt financings, or from other sources. Such arrangements may be dilutive to our existing stockholders. However, there is no assurance that we will be successful in consummating any such arrangements. In addition, in the event that additional funds are obtained through arrangements with collaborative partners or other sources, such arrangements may require us to relinquish rights to some of our technologies, product candidates or products under development that

22

we would otherwise seek to develop or commercialize ourselves. If we are unable to generate meaningful amounts of revenue from future product sales, if any, or cannot otherwise raise sufficient additional funds to support our operations, we may be required to delay, reduce the scope of or eliminate one or more of our development programs and our business and future prospects for revenue and profitability may be harmed.

If we are unable to effectively protect our intellectual property, we will be unable to prevent third parties from using our technology, which would impair our competitiveness and ability to commercialize our product candidates. In addition, enforcing our proprietary rights may be expensive and result in increased losses.

        Our success will depend in part on our ability to obtain and maintain meaningful patent protection for our products, both in the United States and in other countries. We rely on patents to protect a large part of our intellectual property and our competitive position. Any patents issued to or licensed by us could be challenged, invalidated, infringed, circumvented or held unenforceable. In addition, it is possible that no patents will issue on any of our licensed patent applications. It is possible that the claims in patents that have been issued or licensed to us or that may be issued or licensed to us in the future will not be sufficiently broad to protect our intellectual property or that the patents will not provide protection against competitive products or otherwise be commercially valuable. Failure to obtain and maintain adequate patent protection for our intellectual property would impair our ability to be commercially competitive.

        Our commercial success will also depend in part on our ability to commercialize our product candidates without infringing patents or other proprietary rights of others or breaching the licenses granted to us. We may not be able to obtain a license to third-party technology that we may require to conduct our business or, if obtainable, we may not be able to license such technology at a reasonable cost. If we fail to obtain a license to any technology that we may require to commercialize our technologies or product candidates, or fail to obtain a license at a reasonable cost, we will be unable to commercialize the affected product or to commercialize it at a price that will allow us to become profitable.

        In addition to patent protection, we also rely upon trade secrets, proprietary know-how and technological advances which we seek to protect through confidentiality agreements with our collaborators, employees and consultants. Our employees and consultants are required to enter into confidentiality agreements with us. We also enter into non-disclosure agreements with our collaborators and vendors, which are intended to protect our confidential information delivered to third parties for research and other purposes. However, these agreements could be breached and we may not have adequate remedies for any breach, or our trade secrets and proprietary know-how could otherwise become known or be independently discovered by others.

        Furthermore, as with any pharmaceutical company, our patent and other proprietary rights are subject to uncertainty. Our patent rights related to our product candidates might conflict with current or future patents and other proprietary rights of others. For the same reasons, the products of others could infringe our patents or other proprietary rights. Litigation or patent interference proceedings, either of which could result in substantial costs to us, may be necessary to enforce any of our patents or other proprietary rights, or to determine the scope and validity or enforceability of other parties' proprietary rights. The defense and prosecution of patent and intellectual property infringement claims are both costly and time consuming, even if the outcome is favorable to us. Any adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties, or require us to cease selling our future products. We are not currently a party to any patent or other intellectual property infringement claims.

23

We do not have manufacturing facilities or capabilities and are dependent on third parties to fulfill our manufacturing needs, which could result in the delay of clinical trials, regulatory approvals, product introductions and commercial sales.

        We are dependent on third parties for the manufacture and storage of our product candidates for clinical trials and, if approved, for commercial sale. If we are unable to contract for a sufficient supply of our product candidates on acceptable terms, or if we encounter delays or difficulties in the manufacturing process or our relationships with our manufacturers, we may not have sufficient product to conduct or complete our clinical trials or support commercial requirements for our product candidates, if approved for marketing.

        Both PDX and RH1 are cytotoxic which requires manufacturers of these substances to have specialized equipment and safety systems to handle such substances. In addition, the starting materials for PDX require custom preparations, which will require us to manage an additional set of suppliers to obtain the needed supplies of PDX.

        Given our lack of formal supply agreements and the fact that in many cases our components are supplied by a single source, our third party suppliers may not be able to fulfill our potential commercial needs or meet our deadlines, or the components they supply to us may not meet our specifications and quality policies and procedures. If we need to find an alternative supplier of PDX or other components, we may not be able to contract for those components on acceptable terms, if at all. Any such failure to supply or delay caused by such suppliers would have an adverse affect on our ability to continue clinical development of our product candidates or commercialize any future products.

        Even if we obtain approval to market our product candidates in one or more indications, our current or future manufacturers may be unable to accurately and reliably manufacture commercial quantities of our product candidates at reasonable costs, on a timely basis and in compliance with the FDA's current Good Manufacturing Practices. If our current or future contract manufacturers fail in any of these respects, our ability to timely complete our clinical trials, obtain required regulatory approvals and successfully commercialize our product candidates will be materially and adversely affected. This risk may be heightened with respect to PDX and RH1 as there are a limited number of fill/finish manufacturers with the ability to handle cytotoxic products such as PDX and RH1. Our reliance on contract manufacturers exposes us to additional risks, including:

•

delays or failure to manufacture sufficient quantities needed for clinical trials in accordance with our specifications or to deliver such quantities on the dates we require;



•

our current and future manufacturers are subject to ongoing, periodic, unannounced inspections by the FDA and corresponding state and international regulatory authorities for compliance with strictly enforced current Good Manufacturing Practice regulations and similar state and foreign standards, and we do not have control over our contract manufacturers' compliance with these regulations and standards;



•

our current and future manufacturers may not be able to comply with applicable regulatory requirements, which would prohibit them from manufacturing products for us;



•

our manufacturers may have staffing difficulties, may undergo changes in control or may become financially distressed, adversely affecting their willingness or ability to manufacture products for us;



•

our manufacturers might not be able to fulfill our commercial needs, which would require us to seek new manufacturing arrangements and may result in substantial delays in meeting market;



•

demands if we need to change to other commercial manufacturing contractors, the FDA and comparable foreign regulators must approve our use of any new manufacturer, which would require additional testing, regulatory filings and compliance inspections, and the new

24

manufacturers would have to be educated in, or themselves develop substantially equivalent processes necessary for, the production of our products; and

•

we may not have intellectual property rights, or may have to share intellectual property rights, to any improvements in the manufacturing processes or new manufacturing processes for our products.

        Any of these factors could result in the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates. They could also entail higher costs and result in our being unable to effectively commercialize our product candidates.

We may explore strategic partnerships that may never materialize or may fail.

        We may, in the future, periodically explore a variety of possible strategic partnerships in an effort to gain access to additional complimentary resources. At the current time, we cannot predict what form such a strategic partnership might take. We are likely to face significant competition in seeking appropriate strategic partners, and these strategic partnerships can be complicated and time consuming to negotiate and document. We may not be able to negotiate strategic partnerships on acceptable terms, or at all. We are unable to predict when, if ever, we will enter into any additional strategic partnerships because of the numerous risks and uncertainties associated with establishing strategic partnerships.

If we enter into one or more strategic partnerships, we may be required to relinquish important rights to and control over the development of our product candidates or otherwise be subject to unfavorable terms.

        Any future strategic partnerships we enter into could subject us to a number of risks, including:

•

we may be required to undertake expenditure of substantial operational, financial and management resources in integrating new businesses, technologies and products;



•

we may be required to issue equity securities that would dilute our existing stockholders' percentage ownership;



•

we may be required to assume substantial actual or contingent liabilities;



•

we may not be able to control the amount and timing of resources that our strategic partners devote to the development or commercialization of product candidates;



•

strategic partners may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing;



•

strategic partners may not pursue further development and commercialization of products resulting from the strategic partnering arrangement or may elect to discontinue research and development programs;



•

strategic partners may not commit adequate resources to the marketing and distribution of any future products, limiting our potential revenues from these products;



•

disputes may arise between us and our strategic partners that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management's attention and consumes resources;



•

strategic partners may experience financial difficulties;

25

•

strategic partners may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation;



•

business combinations or significant changes in a strategic partner's business strategy may also adversely affect a strategic partner's willingness or ability to complete its obligations under any arrangement;



•

strategic partners could independently move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors; and



•

strategic partners could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing our product candidates.

Acceptance of our products in the marketplace is uncertain, and failure to achieve market acceptance will limit our ability to generate revenue and become profitable.

        Even if approved for marketing, our products may not achieve market acceptance. The degree of market acceptance will depend upon a number of factors, including:

•

the receipt of timely regulatory approval for the uses that we are studying;



•

the establishment and demonstration in the medical community of the safety and efficacy of our products and their potential advantages over existing and newly developed therapeutic products;



•

ease of use of our products;



•

reimbursement and coverage policies of government and private payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan administrators; and



•

the scope and effectiveness of our sales and marketing efforts.

        Physicians, patients, payors or the medical community in general may be unwilling to accept, utilize or recommend the use of any of our products.

The status of reimbursement from third-party payors for newly approved health care drugs is uncertain and failure to obtain adequate coverage and reimbursement could limit our ability to generate revenue.

        Our ability to successfully commercialize our products will depend, in part, on the extent to which coverage and reimbursement for the products will be available from government and health administration authorities, private health insurers, managed care programs, and other third-party payors.

        Significant uncertainty exists as to the reimbursement status of newly approved health care products. Third-party payors, including Medicare, are challenging the prices charged for medical products and services. Government and other third-party payors increasingly are attempting to contain health care costs by limiting both coverage and the level of reimbursement for new drugs and by refusing, in some cases, to provide coverage for uses of approved products for disease conditions for which the FDA has not granted labeling approval. Third-party insurance coverage may not be available to patients for our products. If government and other third-party payors do not provide adequate coverage and reimbursement levels for our product candidates, their market acceptance may be reduced.

26

Health care reform measures could adversely affect our business.

        The business and financial condition of pharmaceutical and biotechnology companies are affected by the efforts of governmental and third-party payors to contain or reduce the costs of health care. In the United States and in foreign jurisdictions there have been, and we expect that there will continue to be, a number of legislative and regulatory proposals aimed at changing the health care system. For example, in some countries other than the United States, pricing of prescription drugs is subject to government control, and we expect proposals to implement similar controls in the United States to continue. We are unable to predict what additional legislation or regulation, if any, relating to the health care industry or third-party coverage and reimbursement may be enacted in the future or what effect such legislation or regulation would have on our business. The pendency or approval of such proposals or reforms could result in a decrease in our stock price or limit our ability to raise capital or to obtain strategic partnerships or licenses.

If we fail to comply with healthcare fraud and abuse laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

        As a biopharmaceutical company, even though we do not and will not control referrals of health care services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse will be applicable to our business. These laws and regulations, include, among others:

•

the federal Anti-Kickback Statute, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal health care programs such as the Medicare and Medicaid programs;



•

federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;



•

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and



•

state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

        Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution under the federal Anti-Kickback statute, the exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability.

        If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management's attention from the operation of our

27

business. Moreover, achieving and sustaining compliance with all applicable federal and state fraud and abuse laws may prove costly.

If we are unable to develop adequate sales, marketing or distribution capabilities or enter into agreements with third parties to perform some of these functions, we will not be able to commercialize our products effectively.

        We have limited experience in sales, marketing and distribution. To directly market and distribute any products, we must build a sales and marketing organization with appropriate technical expertise and distribution capabilities. We may attempt to build such a sales and marketing organization on our own or with the assistance of a contract sales organization. For some market opportunities, we may need to enter into co-promotion or other licensing arrangements with larger pharmaceutical or biotechnology firms in order to increase the likelihood of commercial success for our products. We may not be able to establish sales, marketing and distribution capabilities of our own or enter into such arrangements with third parties in a timely manner or on acceptable terms. To the extent that we enter into co-promotion or other licensing arrangements, our product revenues are likely to be lower than if we directly marketed and sold our products, and some or all of the revenues we receive will depend upon the efforts of third parties, and these efforts may not be successful. Additionally, building marketing and distribution capabilities may be more expensive than we anticipate, requiring us to divert capital from other intended purposes or preventing us from building our marketing and distribution capabilities to the desired levels.

If our competitors develop and market products that are more effective than ours, our commercial opportunity will be reduced or eliminated.

        Even if we obtain the necessary regulatory approvals to market PDX or any other product candidate, our commercial opportunity will be reduced or eliminated if our competitors develop and market products that are more effective, have fewer side effects or are less expensive than our product candidates. Our potential competitors include large fully integrated pharmaceutical companies and more established biotechnology companies, both of which have significant resources and expertise in research and development, manufacturing, testing, obtaining regulatory approvals and marketing. Academic institutions, government agencies, and other public and private research organizations conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and marketing. It is possible that competitors will succeed in developing technologies that are more effective than those being developed by us or that would render our technology obsolete or noncompetitive.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

        The testing and marketing of pharmaceutical products entail an inherent risk of product liability. Product liability claims might be brought against us by consumers, health care providers or by pharmaceutical companies or others selling our future products. If we cannot successfully defend ourselves against such claims, we may incur substantial liabilities or be required to limit the commercialization of our product candidates. We have obtained limited product liability insurance coverage for our human clinical trials. However, product liability insurance coverage is becoming increasingly expensive, and we may be unable to maintain product liability insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to product liability. A successful product liability claim in excess of our insurance coverage could have a material adverse effect on our business, financial condition and results of operations. We may not be able to obtain commercially reasonable product liability insurance for any products approved for marketing.

28

We are currently involved in a securities class action litigation, which could harm our business if management attention is diverted or the claims are decided against us.

        We have been named as a defendant in a purported securities class action lawsuit seeking unspecified damages relating to the issuance of allegedly false and misleading statements regarding EFAPROXYN during the period from May 29, 2003 to April 29, 2004 and subsequent declines in our stock price. In an opinion dated October 20, 2005, the District Court concluded that the plaintiff's complaint failed to meet the legal requirements applicable to its alleged claims and dismissed the lawsuit. On November 20, 2005, the plaintiff appealed the District Court's decision to the U.S. Court of Appeals for the Tenth Circuit (the "Court of Appeals"). On February 6, 2008, the parties signed a stipulation of settlement, settling the case for $2,000,000. The defendants do not admit any liability in connection with the settlement. The Court of Appeals has remanded the case to the District Court for consideration of the settlement. The settlement is subject to various conditions, including without limitation approval of the District Court. We expect that the amount of the settlement in excess of our deductible will be covered by our insurance carrier. In the event the settlement does not become final, we intend to vigorously defend against the plaintiff's appeal. If the Court of Appeals then were to reverse the District Court's decision and we were not successful in our defense of such claims, we could be forced to make significant payments to the plaintiffs, and such payments could have a material adverse effect on our business, financial condition, results of operations and cash flows to the extent such payments are not covered by our insurance carriers. Even if our defense against such claims were successful, the litigation could result in substantial costs and divert management's attention and resources, which could adversely affect our business. As of December 31, 2007, we have recorded $2,000,000 in accrued litigation settlement costs, which represents our best estimate of the potential gross amount of the settlement costs to be paid to the plaintiffs, and $1,759,000 in prepaid expenses and other assets, which represents the amount we expect to be reimbursed from our insurance carrier. The net difference of $241,000 between these amounts represents the remaining unpaid deductible under our insurance policy, and this amount was recorded to marketing, general and administrative expenses during the year ended December 31, 2006.

Our success depends on retention of our President and Chief Executive Officer, Chief Medical Officer and other key personnel.

        We are highly dependent on our President and Chief Executive Officer, Paul L. Berns, our Chief Medical Officer, Pablo J. Cagnoni, M.D. and other members of our management team. We are named as the beneficiary on a term life insurance policy covering Mr. Berns in the amount of $10.0 million. We also depend on academic collaborators for each of our research and development programs. The loss of any of our key employees or academic collaborators could delay our discovery research program and the development and commercialization of our product candidates or result in termination of them in their entirety. Mr. Berns and Dr. Cagnoni, as well as others on our executive management team, have severance agreements with us, but the agreements provides for "at-will" employment with no specified term. Our future success also will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, governmental regulation and commercialization. We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations. If we are unsuccessful in our recruitment and retention efforts, our business will be harmed.

        We also rely on consultants, collaborators and advisors to assist us in formulating and conducting our research. All of our consultants, collaborators and advisors are employed by other employers or are self-employed and may have commitments to or consulting contracts with other entities that may limit their ability to contribute to our company.

29

We cannot guarantee that we will be in compliance with all potentially applicable regulations.

        The development, manufacturing, and, if approved, pricing, marketing, sale and reimbursement of our products, together with our general obligations, are subject to extensive regulation by federal, state and other authorities within the United States and numerous entities outside of the United States. We also have significantly fewer employees than many other companies that have the same or fewer product candidates in late stage clinical development and we rely heavily on third parties to conduct many important functions.

        As a publicly-traded company, we are subject to significant regulations, some of which have either only recently been adopted, including the Sarbanes Oxley Act of 2002, or are currently proposals subject to change. We cannot assure that we are or will be in compliance with all potentially applicable regulations. If we fail to comply with the Sarbanes Oxley Act of 2002 or any other regulations we could be subject to a range of consequences, including restrictions on our ability to sell equity or otherwise raise capital funds, the de-listing of our common stock from the Nasdaq Global Market, suspension or termination of our clinical trials, failure to obtain approval to market our product candidates, restrictions on future products or our manufacturing processes, significant fines, or other sanctions or litigation.

If our internal controls over financial reporting are not considered effective, our business and stock price could be adversely affected.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal controls over financial reporting as of the end of each fiscal year, and to include a management report assessing the effectiveness of our internal controls over financial reporting in this annual report on Form 10-K for that fiscal year. Section 404 also requires our independent registered public accounting firm to attest to, and report on, management's assessment of our internal controls over financial reporting.

        Our management, including our chief executive officer and principal financial officer, does not expect that our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud involving a company have been, or will be, detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become ineffective because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We cannot assure you that we or our independent registered public accounting firm will not identify a material weakness in our internal controls in the future. A material weakness in our internal controls over financial reporting would require management and our independent registered public accounting firm to consider our internal controls as ineffective. If our internal controls over financial reporting are not considered effective, we may experience a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock.

If we do not progress in our programs as anticipated, our stock price could decrease.

        For planning purposes, we estimate the timing of a variety of clinical, regulatory and other milestones, such as when a certain product candidate will enter clinical development, when a clinical

30

trial will be initiated or completed, or when an application for regulatory approval will be filed. Some of our estimates are included in this report. Our estimates are based on information available to us as of the date of this report and a variety of assumptions. Many of the underlying assumptions are outside of our control. If milestones are not achieved when we estimated that they would be, investors could be disappointed, and our stock price may decrease.

Warburg Pincus Private Equity VIII, L.P. ("Warburg") and Baker Brothers Life Sciences, L.P. ("Baker") each control a substantial percentage of the voting power of our outstanding common stock.

        On March 2, 2005, we entered into a Securities Purchase Agreement with Warburg Pincus Private Equity VIII, L.P. ("Warburg") and certain other investors pursuant to which we issued and sold an aggregate of 2,352,443 shares of our Series A Exchangeable Preferred Stock (the "Exchangeable Preferred") at a price per share of $22.10, for aggregate gross proceeds of approximately $52.0 million. On May 18, 2005, at our Annual Meeting of Stockholders, our stockholders voted to approve the issuance of shares of our common stock upon exchange of shares of the Exchangeable Preferred. As a result of such approval, we issued a total of 23,524,430 shares of common stock upon exchange of 2,352,443 shares of Exchangeable Preferred. In connection with its purchase of the Exchangeable Preferred, Warburg entered into a standstill agreement agreeing not to pursue certain activities the purpose or effect of which may be to change or influence the control of the Company.

        On February 2, 2007, we closed an underwritten offering of 9,000,000 shares of common stock, of which Baker Brothers Life Sciences, L.P. and certain other affiliated funds (collectively "Baker") purchased 3,300,000 shares, at a price per share of $6.00, for aggregate gross proceeds of approximately $54.0 million (the "February 2007 Financing"). In connection with its purchase of shares in the February 2007 Financing, Baker entered into a standstill agreement agreeing not to pursue certain activities the purpose or effect of which might be to change or influence the control of the Company.

        As of December 31, 2007, we had approximately 67.6 million shares of common stock outstanding, of which Warburg owned 22,624,430 shares, or approximately 33% of the voting power of our outstanding common stock, and Baker owned 8,741,480 shares, or approximately 13% of the voting power of our outstanding common stock. Although each of Warburg and Baker have entered into a standstill agreement with us, they are, and will continue to be, able to exercise substantial influence over any actions requiring stockholder approval.

Anti-takeover provisions in our charter documents and under Delaware law could discourage, delay or prevent an acquisition of us, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.

        Provisions of our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. These provisions include:

•

authorizing the issuance of "blank check" preferred stock that could be issued by our board of directors to increase the number of outstanding shares or change the balance of voting control and thwart a takeover attempt;



•

prohibiting cumulative voting in the election of directors, which would otherwise allow for less than a majority of stockholders to elect director candidates;

31

•

prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;



•

eliminating the ability of stockholders to call a special meeting of stockholders; and



•

establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

        In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder. This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders. Notwithstanding the foregoing, the three year moratorium imposed on business combinations by Section 203 will not apply to either Warburg or Baker because, prior to the dates on which they became interested stockholders, our board of directors approved the transactions which resulted in Warburg and Baker becoming interested stockholders. However, in connection with its purchase of Exchangeable Preferred in March 2005, Warburg entered into a standstill agreement agreeing not to pursue certain activities the purpose or effect of which may be to change or influence the control of the Company. Similarly, in connection with the February 2007 Financing, Baker entered into a standstill agreement agreeing not to pursue certain activities the purpose or effect of which may be to change or influence the control of the Company.

We have adopted a stockholder rights plan that may discourage, delay or prevent a merger or acquisition that is beneficial to our stockholders.

        In May 2003, our board of directors adopted a stockholder rights plan that may have the effect of discouraging, delaying or preventing a merger or acquisition of us that is beneficial to our stockholders by diluting the ability of a potential acquirer to acquire us. Pursuant to the terms of our plan, when a person or group, except under certain circumstances, acquires 15% or more of our outstanding common stock or 10 business days after announcement of a tender or exchange offer for 15% or more of our outstanding common stock, the rights (except those rights held by the person or group who has acquired or announced an offer to acquire 15% or more of our outstanding common stock) would generally become exercisable for shares of our common stock at a discount. Because the potential acquirer's rights would not become exercisable for our shares of common stock at a discount, the potential acquirer would suffer substantial dilution and may lose its ability to acquire us. In addition, the existence of the plan itself may deter a potential acquirer from acquiring or making an offer to acquire the Company. As a result, either by operation of the plan or by its potential deterrent effect, mergers and acquisitions of the Company that our stockholders may consider in their best interests may not occur.

        Because Warburg owns a substantial percentage of our outstanding common stock, we amended the stockholder rights plan in connection with Warburg's purchase of Exchangeable Preferred in March 2005 to provide that Warburg and its affiliates will be exempt from the stockholder rights plan, unless Warburg and its affiliates become, without the prior consent of our board of directors, the beneficial owner of more than 44% of our common stock. Likewise, since Baker owns a substantial percentage of our outstanding common stock, we amended the stockholder rights plan in connection with the February 2007 Financing to provide that Baker and its affiliates will be exempt from the stockholder rights plan, unless Baker becomes, without the prior consent of our board of directors, the beneficial owner of more than 20% of our common stock. Under the stockholder rights plan, our board of directors has express authority to amend the rights plan without stockholder approval.

32

The market price for our common stock has been and may continue to be highly volatile, and an active trading market for our common stock may never exist.

        We cannot assure you that an active trading market for our common stock will exist at any time. Holders of our common stock may not be able to sell shares quickly or at the market price if trading in our common stock is not active. The trading price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including:

•

actual or anticipated results of our clinical trials, including PROPEL;



•

actual or anticipated regulatory approvals or non-approvals of our product candidates, including PDX, or of competing product candidates;



•

changes in laws or regulations applicable to our product candidates;



•

changes in the expected or actual timing of our development programs;



•

actual or anticipated variations in quarterly operating results;



•

announcements of technological innovations by us or our competitors;



•

changes in financial estimates or recommendations by securities analysts;



•

conditions or trends in the biotechnology and pharmaceutical industries;



•

changes in the market valuations of similar companies;



•

announcements by us of significant acquisitions, strategic partnerships, joint ventures or capital commitments;



•

additions or departures of key personnel;



•

disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;



•

developments concerning any of our research and development, manufacturing and marketing collaborations;



•

sales of large blocks of our common stock;



•

sales of our common stock by our executive officers, directors and five percent stockholders; and



•

economic and other external factors, including disasters or crises.

        Public companies in general and companies included on the Nasdaq Global Market in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. There has been particular volatility in the market prices of securities of biotechnology and other life sciences companies, and the market prices of these companies have often fluctuated because of problems or successes in a given market segment or because investor interest has shifted to other segments. These broad market and industry factors may cause the market price of our common stock to decline, regardless of our operating performance. We have no control over this volatility and can only focus our efforts on our own operations, and even these may be affected due to the state of the capital markets. In the past, following large price declines in the public market price of a company's securities, securities class action litigation has often been initiated against that company, including in 2004 against us. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which would hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.

33

We are required to recognize stock-based compensation expense relating to employee stock options, restricted stock, and stock purchases under our Employee Stock Purchase Plan, and the amount of expense we recognize may not accurately reflect the value of our share-based payment awards. Further, the recognition of stock-based compensation expense will cause our net losses to increase and may cause the trading price of our common stock to fluctuate.

        On January 1, 2006, we adopted SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R"), which requires the measurement and recognition of compensation expense for all stock-based compensation based on estimated fair values. As a result, our operating results for the years ended December 31, 2007 and 2006 include, and future periods will include, a charge for stock-based compensation related to employee stock options, restricted stock and discounted employee stock purchases. The application of SFAS 123R requires the use of an option-pricing model to determine the fair value of share-based payment awards. This determination of fair value is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, in management's opinion the existing valuation models may not provide an accurate measure of the fair value of our employee stock options.

        Our adoption of SFAS 123R had a material impact on our financial statements and results of operations. We also expect that SFAS 123R will have a material impact on our future financial statements and results of operations. We cannot predict the effect that our stock-based compensation expense will have on the trading price of our common stock.

Substantial sales of shares may impact the market price of our common stock.

        If our stockholders sell substantial amounts of our common stock, the market price of our common stock may decline. These sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we consider appropriate. We are unable to predict the effect that sales may have on the then prevailing market price of our common stock. We have entered into a Registration Rights Agreement with Warburg and the other purchasers of our Exchangeable Preferred pursuant to which such investors are entitled to certain registration rights with respect to the shares of common stock that we issued upon exchange of the Exchangeable Preferred.

        In addition, we will need to raise substantial additional capital in the future to fund our operations. If we raise additional funds by issuing equity securities, the market price of our common stock may decline and our existing stockholders may experience significant dilution.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        Not Applicable.

ITEM 2.    PROPERTIES

        Our corporate headquarters facility consists of approximately 43,956 square feet in Westminster, Colorado. We lease our corporate headquarters facility pursuant to a lease agreement that expires on October 31, 2008. In January 2005, we entered into agreements to sublease 9,420 square feet of this space to two other entities. We believe that our leased facilities are adequate to meet our needs until such time, if any, as we receive regulatory approval to market one or more of our product candidates.

34

ITEM 3.    LEGAL PROCEEDINGS

        The Company and one of its former officers were named as defendants in a purported securities class action lawsuit filed in May 2004 in the United States District Court for the District of Colorado (the "District Court"). An amended complaint was filed in August 2004. The lawsuit was brought on behalf of a purported class of purchasers of our securities during the period from May 29, 2003 to April 29, 2004, and sought unspecified damages relating to the issuance of allegedly false and misleading statements regarding EFAPROXYN during this period and subsequent declines in our stock price. On October 20, 2005, the District Court granted the defendants' motion to dismiss the lawsuit with prejudice. In an opinion dated October 20, 2005, the District Court concluded that the plaintiff's complaint failed to meet the legal requirements applicable to its alleged claims.

        On November 20, 2005, the plaintiff appealed the District Court's decision to the U.S. Court of Appeals for the Tenth Circuit (the "Court of Appeals"). On February 6, 2008, the parties signed a stipulation of settlement, settling the case for $2,000,000. Neither we nor our former officer admits any liability in connection with the settlement. The Court of Appeals accordingly has remanded the case to the District Court for consideration of the settlement. The settlement is subject to various conditions, including without limitation approval of the District Court. We expect that the amount of the settlement in excess of our deductible will be covered by our insurance carrier. In the event the settlement does not become final, we intend to vigorously defend against the plaintiff's appeal. If the Court of Appeals then were to reverse the District Court's decision and we were not successful in our defense of such claims, we could be forced to make significant payments to the plaintiffs, and such payments could have a material adverse effect on our business, financial condition, results of operations and cash flows to the extent such payments are not covered by our insurance carriers. Even if our defense against such claims were successful, the litigation could result in substantial costs and divert management's attention and resources, which could adversely affect our business. As of December 31, 2007, we have recorded $2,000,000 in accrued litigation settlement costs, which represents our best estimate of the potential gross amount of the settlement costs to be paid to the plaintiffs, and $1,759,000 in prepaid expenses and other assets, which represents the amount we expect to be reimbursed from our insurance carrier. The net difference of $241,000 between these amounts represents the remaining unpaid deductible under our insurance policy, and this amount was recorded to marketing, general and administrative expenses during the year ended December 31, 2006.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

35

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Holders

        Our common stock is traded on the Nasdaq Global Market® under the symbol "ALTH." The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported on the Nasdaq Global Market:

Year Ended December 31, 2007	HIGH		LOW
First Quarter	$	8.54	$	5.75
Second Quarter	$	7.08	$	3.91
Third Quarter	$	5.90	$	3.92
Fourth Quarter	$	7.52	$	4.70

Year Ended December 31, 2006	HIGH		LOW
First Quarter	$	3.60	$	2.08
Second Quarter	$	3.55	$	2.84
Third Quarter	$	4.25	$	3.43
Fourth Quarter	$	7.58	$	3.65

        On February 20, 2008, we had approximately 72 holders of record of our common stock.

36

Stock Performance Measurement Comparison(1)

        The following graph shows the total stockholder return of an investment of $100 in cash on December 31, 2002 for (i) the Company's common stock, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index. All values assume reinvestment of the full amount of all dividends and are calculated as of December 31 of each year:

Comparison of 5 year Cumulative Total Return on Investment

Total Return Analysis	12/31/2002		12/31/2003		12/31/2004		12/31/2005		12/31/2006		12/31/2007
Allos Therapeutics, Inc.	$	100.00	$	47.74	$	31.91	$	28.59	$	77.79	$	83.64
NASDAQ Composite	$	100.00	$	150.01	$	162.89	$	165.13	$	180.85	$	198.60
NASDAQ Biotechnology	$	100.00	$	145.75	$	154.68	$	159.06	$	160.69	$	168.05

(1)

The information in this section is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of the Company under the 1933 Act or the 1934 Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Dividends

        We have never paid dividends to holders of our common stock, and we do not anticipate paying any cash dividends in the foreseeable future as we intend to retain any earnings for use in our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon the results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

37

ITEM 6.    SELECTED FINANCIAL DATA

        The selected financial data set forth below should be read in conjunction with our financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in this report. The statement of operations data for the years ended December 31, 2007, 2006, 2005, and cumulative period from September 1, 1992 through December 31, 2007, and the balance sheet data as of December 31, 2007 and 2006, are derived from, and qualified by reference to, our audited financial statements included elsewhere in this report. The statement of operations data for the years ended December 31, 2004 and 2003, and the balance sheet data as of December 31, 2005, 2004 and 2003, are derived from our audited financial statements that do not appear in this report. The historical results are not necessarily indicative of the operating results to be expected in the future.

																		Cumulative period from September 1, 1992 (date of inception) through December 31, 2007
			Years Ended December 31,
			2007			2006			2005			2004			2003
			(in thousands, except share and per share data)
Statement of Operations Data:
Operating expenses:
	Research and development		$	17,444		$	14,322		$	11,215		$	10,158		$	11,957		$	125,300
	Clinical manufacturing			5,548			2,284			1,266			2,979			7,252			34,612
	Marketing, general and administrative			19,672			14,876			9,044			9,194			9,378			102,831
	Restructuring and separation costs			—			646			380			—			638			1,664
		Total operating expenses		42,664			32,128			21,905			22,331			29,225			264,407
Loss from operations				(42,664	)		(32,128	)		(21,905	)		(22,331	)		(29,225	)		(264,407	)
Gain on settlement claims				—			—			—			—			5,110			5,110
Interest and other income, net				3,294			1,916			1,768			494			988			21,604
	Net loss			(39,370	)		(30,212	)		(20,137	)		(21,837	)		(23,127	)		(237,693	)
Dividend related to beneficial conversion feature of preferred stock				—			—			(623	)		—			—			(10,236	)
Net loss attributable to common stockholders			$	(39,370	)	$	(30,212	)	$	(20,760	)	$	(21,837	)	$	(23,127	)	$	(247,929	)
Net loss per share: basic and diluted			$	(0.60	)	$	(0.55	)	$	(0.45	)	$	(0.70	)	$	(0.87	)
Weighted-average shares: basic and diluted				65,188,913			55,299,614			46,070,686			31,139,192			26,493,861

	As of December 31,
	2007			2006			2005			2004			2003
	(in thousands)
Balance Sheet Data:
Cash, cash equivalents and investments in marketable securities	$	57,756		$	32,796		$	55,156		$	23,711		$	44,897
Long-term investments in marketable securities		—			—			126			138			150
Working capital		51,958			28,897			52,477			22,745			43,806
Total assets		61,460			36,382			57,081			26,173			48,174
Long-term obligations, less current portion		—			—			—			—			—
Common stock		300,508			238,109			231,637			181,485			181,446
Deficit accumulated during the development stage		(247,929	)		(208,559	)		(178,347	)		(157,587	)		(135,750	)
Total stockholders' equity		52,579			29,550			53,290			23,863			45,411

38

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        We are a biopharmaceutical company focused on developing and commercializing innovative small molecule drugs for the treatment of cancer. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with one or more potential strategic partners. We strive to develop proprietary products that have the potential to improve the standard of care in cancer therapy. Our focus is on product opportunities for oncology that leverage our internal clinical development and regulatory expertise and address important markets with unmet medical need. We may also seek to grow our existing portfolio of product candidates through product acquisition and in-licensing efforts.

        We currently have two small molecule chemotherapeutic product candidates in clinical development, PDX (pralatrexate) and RH1.

PDX

        PDX is a novel, small molecule chemotherapeutic agent that inhibits dihydrofolate reductase, or DHFR, a folic acid (folate)-dependent enzyme involved in the building of nucleic acid, or DNA, and other processes. PDX was rationally designed for efficient transport into tumor cells via the reduced folate carrier, or RFC-1, and effective intracellular drug retention. We believe these biochemical features, together with preclinical and clinical data in a variety of tumors, suggest that PDX may have a favorable safety and efficacy profile relative to methotrexate and other related DHFR inhibitors. We believe PDX has the potential to be delivered as a single agent or in combination therapy regimens.

        The following clinical trials involving PDX are currently open for enrollment:

•

PROPEL, a pivotal Phase 2 study of PDX with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory peripheral T-cell lymphoma, or PTCL. In July 2006, we reached agreement with the FDA under its special protocol assessment, or SPA, process on the design of this Phase 2 trial. As a result, if the results are positive, we believe PROPEL will be sufficient to support the filing of a new drug application, or NDA, to seek marketing approval for PDX in this indication. However, the PROPEL trial protocol does not specify the response rate required to support FDA approval and the response rate will need to be adequate to support approval. We initiated patient enrollment in this study in August 2006 and expect to complete enrollment of a minimum of 100 evaluable patients in the second quarter of 2008.



•

A Phase 1/2a study of PDX and gemcitabine with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory non-Hodgkin's lymphoma, or NHL, or Hodgkin's disease. We initiated patient enrollment in this study in May 2007. We plan to enroll up to 54 evaluable patients in the Phase 1 portion of the study and up to 30 additional patients with relapsed or refractory PTCL in the expanded Phase 2a portion of the study.



•

A Phase 1 study of PDX with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory cutaneous T-cell lymphoma, or CTCL. We initiated patient enrollment in this study in August 2007. We plan to enroll up to 56 evaluable patients in the study, including at least 20 patients at what we believe to be the optimal dose and schedule.



•

A Phase 1/2 study of PDX with vitamin B₁₂ and folic acid supplementation in patients with relapsed or refractory NHL and Hodgkin's disease. This study is currently focused on exploring alternate dosing and administration schedules in patients with B-cell lymphoma to further evaluate PDX's potential clinical utility in this setting.

39

•

A Phase 1 dose escalation study of PDX with vitamin B₁₂ and folic acid supplementation in patients with previously treated advanced non-small cell lung cancer, or NSCLC.



•

A Phase 2b study comparing PDX and Tarceva® (erlotinib), both with vitamin B₁₂ and folic acid supplementation, in patients with Stage IIIB/IV NSCLC who are, or have been, cigarette smokers who have failed treatment with at least one prior platinum-based chemotherapy regimen. We initiated patient enrollment in this study in January 2008. The study will seek to enroll approximately 160 patients in up to 50 investigative sites worldwide.

        In addition to our ongoing NSCLC studies, we intend to initiate a Phase 2, single-agent study of PDX in another solid tumor indication in the first half of 2008 and additional Phase 1 combination studies with PDX in solid tumor indications by year end.

RH1

        RH1 is a small molecule chemotherapeutic agent that we believe is bioactivated by the enzyme DT-diaphorase, or DTD, also known as NAD(P)H quinone oxidoreductase, or NQ01. We believe DTD is over-expressed in many tumors, relative to normal tissue, including lung, colon, breast and liver tumors. We believe that because RH1 is bioactivated in the presence of DTD, it has the potential to provide targeted drug delivery to these tumor types while limiting the amount of toxicity to normal tissue.

        In November 2007, we initiated patient enrollment in a Phase 1 study of RH1 in patients with advanced solid tumors or NHL. We plan to enroll up to 60 evaluable patients in the study with the objective of determining the MTD, recommended Phase 2 dose and safety profile of RH1 in this population. We plan to enroll three to six patients per cohort. Once we determine what we believe to be the optimal dose and schedule, we plan to recruit an expanded cohort of up to 24 evaluable patients who have tumor types with a high likelihood of DTD over-expression to explore possible markers of anticancer activity.

EFAPROXYN™ (efaproxiral) Development Discontinued

        In mid-2007, we discontinued the development of EFAPROXYN, our former lead product candidate, after announcing top-line results from ENRICH, a Phase 3 clinical trial of EFAPROXYN plus whole brain radiation therapy, or WBRT, in women with brain metastases originating from breast cancer. The study failed to achieve its primary endpoint of demonstrating a statistically significant improvement in overall survival in patients receiving EFAPROXYN plus WBRT, compared to patients receiving WBRT alone. We are currently pursuing the sale of our rights to EFAPROXYN although we may not receive any material consideration for any sale.

Results of Operations

        We are a development stage company. Since our inception in 1992, we have not generated any revenue from product sales and have experienced significant net losses and negative cash flows from operations. We have incurred these losses principally from costs incurred in our research and development programs, our clinical manufacturing, and from our marketing, general and administrative expenses. Our primary business activities have been focused on the development of EFAPROXYN (a program which we discontinued in mid-2007), PDX and RH1. For the years ended December 31, 2007, 2006 and 2005, we had net losses attributable to common stockholders of $39.4 million, $30.2 million, and $20.8 million, respectively. Research and development expenses for the years ended December 31, 2007, 2006 and 2005 were $17.4 million, $14.3 million and $11.2 million, respectively. As of December 31, 2007, we had accumulated a deficit during our development stage of $247.9 million.

40

        Our ability to generate revenue and achieve profitability is dependent on our ability, alone or with partners, to successfully complete the development of our product candidates, conduct clinical trials, obtain the necessary regulatory approvals, and manufacture and market our product candidates. The timing and costs to complete the successful development of any of our product candidates are highly uncertain, and therefore difficult to estimate. The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, require the expenditure of substantial resources. For a more complete description of the regulatory approval process, please refer to the "Government Regulation" section of Part I, Item 1 above. Clinical development timelines, likelihood of success and total costs vary widely and are impacted by a variety of risks and uncertainties discussed in the "Risk Factors" section of Part I, Item 1A above. Because of these risks and uncertainties, we cannot predict when or whether we will successfully complete the development of any of our product candidates or the ultimate costs of such efforts. Due to these same factors, we cannot be certain when, or if, we will generate any revenue or net cash inflow from any of our current product candidates.

        Even if our clinical trials demonstrate the safety and effectiveness of our product candidates in their target indications, we do not expect to be able to record commercial sales of any of our product candidates until 2009 at the earliest. We expect to incur significant and growing net losses for the foreseeable future as a result of our research and development programs and the costs of preparing for the potential commercial launch of PDX. Although the size and timing of our future net losses are subject to significant uncertainty, we expect them to increase over the next several years as we continue to fund our development programs and prepare for the potential commercial launch of PDX.

        We will be required to raise additional capital to support our future operations, including the potential commercialization of PDX in the event the PROPEL trial is positive and we obtain regulatory approval to market PDX. We may seek to obtain this additional capital through arrangements with corporate partners, equity or debt financings, or from other sources. Such arrangements, if successfully consummated, may be dilutive to our existing stockholders. However, there is no assurance that we will be successful in consummating any such arrangements. In addition, in the event that additional funds are obtained through arrangements with collaborative partners or other sources, such arrangements may require us to relinquish rights to some of our technologies, product candidates or products under development that we would otherwise seek to develop or commercialize ourselves. If we are unable to generate meaningful amounts of revenue from future product sales, if any, or cannot otherwise raise sufficient additional funds to support our operations, we may be required to delay, reduce the scope of or eliminate one or more of our development programs and our business and future prospects for revenue and profitability may be harmed.

Comparison of Years Ended December 31, 2007, 2006 and 2005

        Research and Development.    Research and development expenses include the costs of certain personnel, basic research, preclinical studies, clinical trials, regulatory affairs, biostatistical data analysis, patents and licensing fees for our product candidates.

	Years Ended December 31,
	2007		2006		2005
	(in millions)
Research and development expenses	$	17.4	$	14.3	$	11.2

41

        The $3.1 million increase in research and development expenses in 2007 as compared to 2006 was primarily due to the following:

•

$2.9 million increase in clinical trial costs involving PDX, mainly attributable to increased costs for PROPEL and initiation of patient enrollment in two new trials involving PDX during 2007;



•

$1.4 million increase related to key personnel changes and related travel costs, mainly attributable to additional headcount and increases in compensation costs year over year;



•

$1.2 million increase in non-cash stock-based compensation expense, as discussed in more detail below;



•

$480,000 increase in preclinical study costs, primarily related to PDX; and



•

$360,000 increase related to incurring a non-recurring data option fee for RH1.

        These increases were partially offset by a $3.2 million decrease in clinical trial costs for EFAPROXYN, primarily resulting from the completion of patient enrollment in our Phase 3 ENRICH trial in September 2006.

        The $3.1 million increase in research and development expenses in 2006 as compared to 2005 was primarily due to the following:

•

$1.1 million increase in preclinical study costs related to PDX;



•

$1.0 million increase in clinical trial costs for PROPEL;



•

$658,000 increase in non-cash stock-based compensation expense due to the adoption of accounting rules related to stock-based compensation expense on January 1, 2006;



•

$550,000 increase in licensing fees resulting primarily from a milestone payment under our license agreement for PDX;



•

$463,000 increase in personnel costs, mainly attributable to additional headcount and increases in compensation costs year over year; and



•

$293,000 increase in patent costs for PDX and EFAPROXYN.

        These increases were partially offset by a $1.3 million decrease in clinical trial costs for ENRICH as (i) we incurred a one-time milestone payment of $550,000 in 2005 related to third party trial management services, (ii) we changed our estimate relating to certain costs for ENRICH during the quarter ended December 31, 2006 as a result of new information, which resulted in a reduction of research and development expenses of approximately $400,000, and (iii) patients were enrolled in the ENRICH trial throughout 2005 whereas patient enrollment was completed in September 2006.

        We expect research and development expenses to increase in 2008 as compared to 2007 due to the following:

•

increases in costs for our ongoing and planned clinical trials;



•

an increase in personnel costs, primarily resulting from additional headcount; and



•

an increase in non-cash stock-based compensation expense related to grants for new employees and our annual grant to existing employees.

        We charge direct internal and external research and development expenses to the respective development programs. Since our inception through December 31, 2007, we have incurred direct costs of approximately $39.5 million, $15.2 million and $840,000 associated with research and development expenses for EFAPROXYN, PDX and RH1, respectively, and approximately $5.5 million associated with our other research and development programs, including programs that have been discontinued.

42

We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs. These consist primarily of salaries and benefits, facilities costs and other internal-shared resources related to the development and maintenance of systems and processes applicable to all of our programs. Unallocated costs since our inception through December 31, 2007 represent approximately $64.3 million of research and development expenses.

        The following table summarizes our research and development expenses for the years ended December 31, 2007, 2006 and 2005 and for the cumulative period from our inception through December 31, 2007:

								Cumulative Period from September 1, 1992 through December 31, 2007
		Years Ended December 31,
		2007		2006		2005
		(in millions)
EFAPROXYN		$	1.0	$	4.3	$	5.3	$	39.5
PDX			6.8		3.4		0.5		15.2
RH1			0.6		—		—		0.8
Other programs			—		—		—		5.5
Unallocated			9.0		6.6		5.4		64.3
	Total research and development expenses	$	17.4	$	14.3	$	11.2	$	125.3

        The timing and costs to complete the successful development of any of our product candidates are highly uncertain, and therefore difficult to estimate. The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, require the expenditure of substantial resources. Clinical development timelines, likelihood of success and total costs vary widely and are impacted by a variety of factors discussed in the "Risk Factors" section of Part I, Item 1A above. Because of these risks and uncertainties, we cannot predict when or whether we will successfully complete the development of any of our product candidates or the ultimate costs of such efforts. Due to these same factors, we cannot be certain when, or if, we will generate any revenue or net cash inflow from any of our current product candidates.

        Clinical Manufacturing.    Clinical manufacturing expenses include the costs of certain personnel, third-party manufacturing costs for development of drug materials for use in clinical trials and preclinical studies, and costs associated with pre-commercial scale-up of manufacturing to support anticipated regulatory and potential commercial requirements.

	Years Ended December 31,
	2007		2006		2005
	(in millions)
Clinical manufacturing expenses	$	5.5	$	2.3	$	1.3

        The $3.3 million increase in clinical manufacturing expenses in 2007 as compared to 2006 was primarily due to the following:

•

$2.6 million increase in third-party manufacturing costs for clinical trial material and pre-commercial scale-up activities for PDX; and



•

$700,000 increase in third-party manufacturing costs for clinical trial material for RH1.

43

        The $1.0 million increase in clinical manufacturing expenses in 2006 as compared to 2005 was primarily due to an $856,000 increase in third-party manufacturing costs for PDX and RH1 bulk drug substance and formulated drug product.

        We expect our clinical manufacturing expenses to increase in 2008 as compared to 2007 due to the following:

•

an increase in third-party manufacturing costs for PDX to support ongoing and planned clinical trials and pre-commercial scale-up;



•

an increase in personnel costs primarily resulting from additional headcount; and



•

an increase in non-cash stock-based compensation expense related to grants for new employees and our annual grant to existing employees.

        Marketing, General and Administrative.    Marketing, general and administrative expenses include costs for pre-marketing activities, corporate development, executive administration, corporate offices and related infrastructure.

	Years Ended December 31,
	2007		2006		2005
	(in millions)
Marketing, general and administrative expenses	$	19.7	$	14.9	$	9.0

        The $4.8 million increase in marketing, general and administrative expenses in 2007 as compared to 2006 was primarily due to the following:

•

$1.8 million increase in non-cash stock-based compensation expense, as discussed in more detail below;



•

$1.4 million increase in personnel costs, mainly attributable to additional headcount and increases in compensation costs year over year;



•

$1.0 million increase in market research and consulting expenses related to our product development and commercialization planning for EFAPROXYN and PDX; and



•

$485,000 increase in travel expenses related to increased headcount, expanded investor relations activities and the development of relationships with key opinion leaders in oncology.

        The $5.8 million increase in marketing, general and administrative expenses in 2006 as compared to 2005 was primarily due to the following:

•

$2.3 million increase in non-cash stock-based compensation expense due to the adoption of accounting rules related to stock-based compensation expense on January 1, 2006;



•

$1.6 million increase in personnel costs, mainly attributable to additional headcount, increases in compensation costs year over year, and recruiting and relocation costs for our new Chief Executive and Chief Commercial Officers;



•

$816,000 increase in market research and consulting expenses related to our product development and commercialization planning for EFAPROXYN and PDX;



•

$342,000 increase in travel expenses relating to expanded investor relations activities and the development of relationships with key opinion leaders in oncology; and



•

$265,000 increase in costs related to the securities class action lawsuit, as further described in "Legal Proceedings" included in Part I, Item 3 of this report.

44

        These increases were partially offset by a $311,000 decrease in insurance costs.

        We expect marketing, general and administrative expenses to increase in 2008 as compared to 2007 due to the following:

•

an increase in non-cash stock-based compensation expense related to grants for new employees and our annual grant to existing employees;



•

an increase in costs relating to pre-commercial planning activities for PDX; and



•

an increase in personnel costs, primarily resulting from additional headcount.

        Stock-based Compensation Expense.    Stock-based compensation expense for the years ended December 31, 2007, 2006 and 2005 has been recognized in our Statements of Operations as follows:

		Year ended December 31,
		2007		2006		2005
Research and development		$	1,870,767	$	660,274	$	2,331
Clinical manufacturing			180,592		113,066		—
Marketing, general and administrative			4,599,266		2,813,661		475,529
	Total stock-based compensation expense	$	6,650,625	$	3,587,001	$	477,860

        Of the $6.7 million of stock-based compensation recognized in year ended December 31, 2007, $5.9 million was related to our stock option plans, $690,000 related to restricted stock and $61,000 related to our employee stock purchase plan. Of the $3.6 million of stock-based compensation recognized in the year ended December 31, 2006, $3.0 million was related to our stock option plans, $503,000 related to restricted stock and $36,000 related to our employee stock purchase plan. The $3.1 million increase in stock-based compensation expense in 2007 as compared to 2006 was primarily due to a higher fair-value for options granted in 2007 compared to options granted in 2006 due to our stock price being higher during the year ended December 31, 2007 as compared to 2006. The stock-based compensation expense recognized in the year ended December 31, 2005 primarily resulted from $462,000 in expense related to an amendment in May 2005 of the terms surrounding the exercise period for certain options that were granted to our Chairman of the Board of Directors in 2000. The $3.1 million increase in stock-based compensation expense in 2006 as compared to 2005 was due to the implementation of SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R") on January 1, 2006.

        As of December 31, 2007, the unrecorded stock-based compensation balance related to stock option awards was $5,991,942 and will be recognized over an estimated weighted-average amortization period of 1.4 years. As of December 31, 2007, the unrecorded stock-based compensation balance related to restricted stock awards was $695,779 and will be recognized over an estimated weighted-average amortization period of 1.5 years.

        Restructuring and Separation Costs.    We recorded $0, $646,000 and $380,000 in restructuring and separation costs during the years ended December 31, 2007, 2006 and 2005, respectively.

        In January 2006, Michael E. Hart notified our Board of Directors of his intent to resign from his positions as President, Chief Executive Officer and Chief Financial Officer of the Company once a successor Chief Executive Officer was appointed. On March 3, 2006, we entered into a separation agreement with Mr. Hart to provide certain incentives for his continued employment with the Company while we conducted our search for his successor. On March 9, 2006, we appointed Paul L. Berns as our President, Chief Executive Officer and a member of the Board of Directors and Mr. Hart resigned from his positions in accordance with the terms of the separation agreement. The separation agreement with Mr. Hart was amended on March 9, 2006, and on May 10, 2006 (as so amended, the "Separation

45

Agreement"). We recorded separation costs of $646,000 during the year ended December 31, 2006 relating to our estimate of our total obligations under the Separation Agreement with Mr. Hart. During the years ended December 31, 2007 and 2006, respectively, we made payments to Mr. Hart under the Separation Agreement of $321,000 and $325,000. As of December 31, 2007, there was no remaining liability relating to the Separation Agreement with Mr. Hart.

        In January 2005, we executed agreements to sublease approximately three-quarters of the 12,708 square feet of excess space in our corporate offices located in Westminster, Colorado. The term of each sublease agreement is through the term of our office lease, or October 31, 2008. The total rental payments to us under the terms of the sublease agreements approximate $230,000. In the year ended December 31, 2005, we recorded a lease abandonment charge of $380,000 as our obligations under our primary lease were in excess of the sum of the actual and expected sublease rental payments for this excess space. As of December 31, 2007, the amount remaining in accrued restructuring and separation costs relating to this lease abandonment charge was $39,000.

        Interest and Other Income, Net.    Interest income, net of interest expense, for 2007, 2006 and 2005 was $3.3 million, $1.9 million, and $1.8 million, respectively. The $1.4 million increase in 2007 as compared to 2006 primarily resulted from higher average investment balances resulting from our February 2007 financing and higher yields on United States government securities, high-grade commercial paper and corporate notes, and money market funds. The $148,000 increase in 2006 as compared to 2005 primarily resulted from higher yields on United States government securities, high-grade commercial paper and corporate notes, and money market funds partially offset by lower average investment balances.

        Income Taxes.    As of December 31, 2007, we had available approximately $130.6 million of net operating loss ("NOL") carryforwards, after taking into consideration NOLs expected to expire unused due to limitations under Section 382 of the Internal Revenue Code, and which includes approximately $3.4 million of deductions related to stock-based compensation that are not realized as deferred tax assets until current taxes payable can be reduced. These NOL carryforwards will expire beginning in 2009. In addition, we had research and development credit and orphan drug credit carryforwards, after taking into consideration the Section 382 limitation, of $2.3 million and $4.9 million, respectively, as of December 31, 2007, to offset future regular and alternative tax expense. Since our formation, we have raised capital through the issuance of capital stock on several occasions which, combined with shareholders' subsequent disposition of those shares, have resulted in four changes of control in 1994, 1998, 2001 and 2005, as defined by Section 382. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% within a three-year period. As a result of the most recent ownership change in 2005, utilization of our NOLs generated prior to the latest change in control are subject to an annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change by the applicable long-term tax-exempt rate resulting in an annual limitation amount of approximately $2.2 million. Any unused annual limitation may be carried over to later years, and the amount of the limitation may, under certain circumstances, be subject to adjustment if the fair value of the Company's net assets are determined to be below or in excess of the tax basis of such assets at the time of the ownership change, and such unrealized loss or gain is recognized during the five-year period after the ownership change. Subsequent ownership changes, as defined in Section 382, could further limit the amount of our NOLs and research and development credits that can be utilized annually to offset future taxable income.

Liquidity and Capital Resources

        As of December 31, 2007, we had $57.8 million in cash, cash equivalents, and investments in marketable securities. Since our inception, we have financed our operations primarily through public and private sales of our equity securities, which have resulted in net proceeds to us of $257.9 million through December 31, 2007. We have also generated $21.6 million of net interest income since our inception from investing the net proceeds of these financings.

46

        We have used $195.5 million of cash for operating activities from our inception through December 31, 2007. Net cash used to fund our operating activities for 2007, 2006 and 2005 was $30.8 million, $25.1 million and $17.7 million, respectively.

        Net cash used in investing activities for 2007 and 2005 was $19.3 million and $28.2 million, respectively, and consisted primarily of purchases of investments in marketable securities, partially offset by the proceeds from maturities of investments in marketable securities. Net cash provided by investing activities for 2006 was $27.9 million and consisted primarily of proceeds from the maturities of investments in marketable securities, partially offset by the purchase of investments in marketable securities.

        Net cash provided by financing activities during 2007 was $55.9 million and resulted primarily from the sale of 9,000,000 shares of common stock in February 2007 in an underwritten offering at a price of $6.00 per share (the "February 2007 Financing"), $5.5 million of proceeds associated with the exercise of common stock options, common stock warrants and sales of stock under our employee stock purchase plan, and the release of $183,000 of restricted cash in connection with a reduction of the letter of credit required pursuant to the lease for our corporate headquarters facility. We received net proceeds from the February 2007 Financing of approximately $50.3 million, after deducting underwriting commissions of approximately $3.2 million and other offering expenses of approximately $503,000. The shares of common stock were sold under our shelf Registration Statement on Form S-3 (File No. 333-134965), declared effective by the Securities and Exchange Commission ("SEC") on July 10, 2006. We retired the unused portion of this shelf registration statement in June 2007. Net cash provided by financing activities during 2006 was $3.1 million and resulted primarily from proceeds associated with the exercise of common stock options, common stock warrants and sales of stock under our employee stock purchase plan, and the release of $183,000 of restricted cash in connection with a reduction of the letter of credit required pursuant to the lease for our corporate headquarters facility. Net cash provided by financing activities during 2005 was $49.1 million and resulted primarily from the sale of 2,352,443 shares of Series A Exchangeable Preferred Stock in March 2005 (the "Exchangeable Preferred"), at a price per share of $22.10, to Warburg Pincus Private Equity VIII, L.P. ("Warburg") and certain other investors for aggregate gross proceeds of approximately $52.0 million. We incurred offering expenses of $3.2 million in connection with the sale of Exchangeable Preferred, resulting in net proceeds to us of $48.8 million. On May 18, 2005, at our Annual Meeting of Stockholders, our stockholders voted to approve the issuance of shares of our common stock upon exchange of shares of the Exchangeable Preferred. As a result of such approval, we issued a total of 23,524,430 shares of common stock upon exchange of 2,352,443 shares of Exchangeable Preferred.

        On June 5, 2007, a universal shelf Registration Statement on Form S-3 (File No. 333-143198) was declared effective by the SEC. Under the registration statement, we are allowed to sell, from time to time, up to $150 million of our common stock, preferred stock, depository shares, debt securities and/or warrants, either individually or in units, in one or more offerings. We have no specific plans to offer the securities covered by the registration statement and we are not required to offer the securities in the future pursuant to the registration statement. The terms of any offering under the registration statement will be established at the time of the offering. Proceeds from the sale of any securities will be used for the purposes described in a prospectus supplement filed at the time of an offering.

        Based upon the current status of our product development plans, we believe that our cash, cash equivalents, and investments in marketable securities as of December 31, 2007 should be adequate to support our operations through at least the first quarter of 2009, although there can be no assurance that this can, in fact, be accomplished. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

47

        We anticipate continuing our current development programs and/or beginning other long-term development projects involving our product candidates. These projects may require many years and substantial expenditures to complete and may ultimately be unsuccessful. Therefore, we will need to obtain additional funds from outside sources to continue research and development activities, fund operating expenses, pursue regulatory approvals and build sales and marketing capabilities, as necessary. However, our actual capital requirements will depend on many factors, including:

•

the status of our product development programs;



•

the time and cost involved in conducting clinical trials and obtaining regulatory approvals;



•

the time and cost involved in filing, prosecuting and enforcing patent claims;



•

competing technological and market developments; and



•

our ability to market and distribute our future products and establish new collaborative and licensing arrangements.

        We will be required to raise additional capital to support our future operations, including the potential commercialization of PDX in the event the PROPEL trial is positive and we obtain regulatory approval to market PDX. We may seek to obtain this additional capital through arrangements with corporate partners, equity or debt financings, or from other sources. Such arrangements, if successfully consummated, may be dilutive to our existing stockholders. However, there is no assurance that we will be successful in consummating any such arrangements. In addition, in the event that additional funds are obtained through arrangements with collaborative partners or other sources, such arrangements may require us to relinquish rights to some of our technologies, product candidates or products under development that we would otherwise seek to develop or commercialize ourselves. If we are unable to generate meaningful amounts of revenue from future product sales, if any, or cannot otherwise raise sufficient additional funds to support our operations, we may be required to delay, reduce the scope of or eliminate one or more of our development programs and our business and future prospects for revenue and profitability may be harmed.

Obligations and Commitments

        Below is a schedule of the timing of contractual commitments, by fiscal year, related to our leases, service contracts and license agreements. We currently have no off-balance sheet arrangements.

	2008		2009 to 2010		2011 to 2012		After 2012		Total
Operating lease obligations	$	657,000	$	73,000	$	—	$	—	$	730,000
License agreement obligations		500,000		500,000		—		—		1,000,000
Total obligations	$	1,157,000	$	573,000	$	—	$	—	$	1,730,000

        Operating lease obligations represent our future minimum rental commitments for non-cancelable operating leases for our facilities and certain office equipment, net of $61,000 of remaining sublease payments on excess space in our corporate offices. We lease our corporate headquarters facility pursuant to a lease agreement that expires on October 31, 2008. We are currently in the process of negotiating an extension to the lease for our corporate headquarters facility. However, there is no assurance that we will be successful in negotiating any such extension. If we are unable to extend the lease, we believe that there is adequate space for lease in our area to support our current and future growth requirements.

        License agreement obligations represent future milestone payments which could be made under our license agreement for PDX, due upon the passage of certain time periods after the effective date

48

of the agreement. These payments could be paid earlier depending on the timing of achieving a certain development milestone.

Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. We base our estimates on historical experience, available information and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following policies to be the most critical to an understanding of our financial condition and results of operations because they require us to make estimates, assumptions and informed management judgments about matters that are inherently uncertain:

•

accounting for research and development expenses;



•

accounting for clinical manufacturing expenses;



•

accounting for cash equivalents and investments in marketable securities; and



•

accounting for stock-based compensation expense.

        Research and Development.    Research and development expenditures are charged to expense as incurred. Research and development expenses include the costs of certain personnel, basic research, preclinical studies, clinical trials, regulatory affairs, biostatistical data analysis, patents and licensing fees for our product candidates. Clinical trial costs represent internal costs from personnel, external costs incurred at clinical sites and contracted costs incurred by third party clinical research organizations to perform certain clinical trials.

        We record upfront fees and milestone payments made under our licensing agreements for our product candidates as research and development expense as the services are performed.

        We accrue research and development expenses for activity as incurred during the fiscal year and prior to receiving invoices from clinical sites and third party clinical and preclinical research organizations. We accrue external costs for clinical and preclinical studies based on an evaluation of the following: the progress of the studies, including patient enrollment, dosing levels of patients enrolled, estimated costs to dose patients, invoices received, and contracted costs with clinical sites and third party clinical and preclinical research organizations. Significant judgments and estimates must be made and used in determining the accrued balance in any accounting period. Actual results could differ from those estimates. During the years ended December 31, 2007, 2006, and 2005, we did not have any changes in estimates that would have resulted in material adjustments to research and development expenses accrued in the prior period. However, during the quarter ended December 31, 2006, we did change our estimate relating to certain costs for our Phase 3 ENRICH trial for EFAPROXYN as a result of new information, which resulted in a reduction of research and development expenses of approximately $400,000 and a corresponding decrease in accrued research and development expenses as of December 31, 2006.

        In accordance with certain research and development agreements, we are obligated to make certain upfront payments upon execution of the agreement. We record these upfront payments as prepaid research and development expenses. Such payments are recorded to research and development expense as services are performed. We evaluate on a quarterly basis whether events and circumstances have occurred that may indicate impairment of remaining prepaid research and development expenses.

        Clinical Manufacturing.    Clinical manufacturing expenses include the costs of certain personnel and third party manufacturing costs for our product candidates for use in clinical trials and preclinical

49

studies, and certain costs associated with pre-commercial scale-up of manufacturing to support anticipated regulatory and potential commercial requirements. Our finished drug inventory is expensed to clinical manufacturing since we are still a development stage company and we have not received regulatory approval to market our product candidates. If and when we receive regulatory approval, we will be required to capitalize any future manufacturing costs for our marketed products at the lower of cost or market and then expense the sold inventory as a component of cost of goods sold.

        Cash Equivalents and Investments in Marketable Securities.    All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The carrying values of our cash equivalents and investments in marketable securities approximate their market values based on quoted market prices. We account for investments in marketable securities in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain Investments in Debt and Equity Securities. Investments in marketable securities are classified as held to maturity and are carried at cost plus accrued interest. Our cash and cash equivalents are maintained in a financial institution in amounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe such accounts are not exposed to any significant credit risk in this area. We place investments in high-quality securities in accordance with our investment policy. Substantially all of our investments in marketable securities as of December 31, 2007 are held in corporate notes with remaining maturities ranging from one to five months.

        Stock-based Compensation Expense.    We adopted SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R") effective January 1, 2006. Under the provisions of SFAS 123R, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period of the award. Prior to the adoption of SFAS 123R, we accounted for grants of stock-based awards according to the intrinsic value method as prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related Interpretations.

        In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 ("SAB 107") relating to SFAS 123R. We applied the provisions of SAB 107 in connection with our adoption of SFAS 123R. We adopted SFAS 123R using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006, the first day of our fiscal year 2006. Our financial statements as of and for the years ended December 31, 2007 and 2006 reflect the impact of SFAS 123R. In accordance with the modified prospective transition method, our financial statements for prior periods have not been restated to reflect, and do not include, the impact of SFAS 123R.

        The adoption of SFAS 123R on January 1, 2006 had a material impact on our net loss and net loss per share for the years ended December 31, 2007 and 2006. We expect that our adoption of SFAS 123R will have a material impact on our future financial statements and results of operations. During the years ended December 31, 2007 and 2006, we recorded stock-based compensation expense of approximately $6.7 million and $3.6 million, respectively, related to stock-based awards, including stock options, restricted stock and our employee stock purchase plan. As of December 31, 2007, the unrecorded deferred stock-based compensation balance related to these stock-based awards was approximately $6.7 million and will be recognized over the remaining vesting periods of the awards. Judgments and estimates must be made and used in determining the factors used in calculating the fair value of stock-based awards, including the expected forfeiture rate of our stock-based awards, the expected life of our stock-based awards, and the expected volatility of our stock price. For more information on stock-based compensation expense during the year ended December 31, 2007, refer to Note 4 "Stock-Based Compensation Plans" of the Notes to our Financial Statements included in Part IV, Item 15 of this report.

50

Recent Accounting Pronouncements

        In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS 157, Fair Value Measurements, which defines fair value, provides a framework for measuring fair value, and expands the disclosures required for fair value measurements. SFAS 157 applies to other accounting pronouncements that require fair value measurements; it does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and we are required to adopt it on January 1, 2008. The application of SFAS 157 to certain items has been deferred and will be effective for fiscal years beginning after November 15, 2008 and interim periods with that year. Although we will continue to evaluate the application of SFAS 157, management does not currently believe adoption of this pronouncement will have a material impact on our results of operations or financial position.

        In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115, which is effective for fiscal years beginning after November 15, 2007 and we are required to adopt it on January 1, 2008. This statement permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates. Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. We are currently evaluating the potential impact of this statement.

        In June 2007, the Emerging Issues Task Force ("EITF") issued a consensus, EITF 07-3, Advance Payments for Research and Development Activities, which states that non-refundable advance payments for goods that will be used or services that will be performed in future research and development activities should be deferred and capitalized until the goods have been delivered or the related services have been rendered. EITF 07-3 is to be applied prospectively for new contractual arrangements entered into in fiscal years beginning after December 15, 2007. We do not expect that EITF 07-3 will result in a material change to our current accounting practice.

        In November 2007, the EITF issued a consensus, EITF 07-01, Accounting for Collaboration Arrangements Related to the Development and Commercialization of Intellectual Property, which is focused on how the parties to a collaborative agreement should account for costs incurred and revenue generated on sales to third parties, how sharing payments pursuant to a collaboration agreement should be presented in the income statement and certain related disclosure questions. EITF 07-1 is to be applied retrospectively for collaboration arrangements in fiscal years beginning after December 15, 2008. We currently do not have any such arrangements.

        In December 2007, the FASB issued SFAS 141(R), Business Combinations. This Statement replaces SFAS 141, Business Combinations, and requires an acquirer to recognize the assets acquired, the liabilities assumed, including those arising from contractual contingencies, any contingent consideration, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the statement. SFAS 141(R) also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values (or other amounts determined in accordance with SFAS 141(R)). In addition, SFAS 141(R)'s requirement to measure the noncontrolling interest in the acquiree at fair value will result in recognizing the goodwill attributable to the noncontrolling interest in addition to that attributable to the acquirer. SFAS 141(R) amends SFAS No. 109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. It also amends SFAS 142, Goodwill and Other Intangible Assets, to, among other things, provide guidance on the impairment testing of acquired research and development intangible assets and assets that the

51

acquirer intends not to use. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently evaluating the potential impact of this Statement.

        In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. SFAS 160 amends Accounting Research Bulletin 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 also changes the way the consolidated income statement is presented by requiring consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent owners and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for fiscal periods, and interim periods within those fiscal years, beginning on or after December 15, 2008. We are currently evaluating the potential impact of this statement.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We do not use derivative financial instruments in our investment portfolio and have no foreign exchange contracts. Our financial instruments as of December 31, 2007 consist of cash, cash equivalents, short-term investments in marketable securities, and accounts payable. All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.

        We invest in marketable securities in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment. The average duration of the issues in our portfolio as of December 31, 2007 is approximately two months. As of December 31, 2007, our investments in marketable securities of $41.8 million are all classified as held-to-maturity and were held in a variety of interest-bearing instruments, consisting mainly of high-grade corporate notes.

        Investments in fixed-rate interest-earning instruments carry varying degrees of interest rate risk. The fair market value of our fixed-rate securities may be adversely impacted due to a rise in interest rates. In general, securities with longer maturities are subject to greater interest-rate risk than those with shorter maturities. Due in part to this factor, our interest income may fall short of expectations or we may suffer losses in principal if securities are sold that have declined in market value due to changes in interest rates. Due to the short duration of our investment portfolio, we believe an immediate 10% change in interest rates would not be material to our financial condition or results of operations.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The financial statements required by this Item are included in Item 15 of this report and are presented beginning on page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

52

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

        As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer (the "Evaluating Officers"), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Based on that evaluation, our management, including the Evaluating Officers, concluded that our disclosure controls and procedures were effective as of December 31, 2007 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including the Evaluating Officers, as appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting

        Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or Rule 15d-(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, a company's principal executive officer and principal financial officer and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that:

•

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;



•

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and



•

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making its assessment, management used the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management determined that, as of December 31, 2007, we maintained effective internal control over financial reporting based on those criteria.

        In addition, the effectiveness of our internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report on page F-2 of this Annual Report on Form 10-K.

53

No Changes in Internal Control over Financial Reporting

        There were no changes in our internal control over financial reporting during the quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

        None.

54

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

        The information required by this Item concerning our directors is incorporated by reference to the information to be set forth in the sections entitled "Proposal 1—Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in our definitive Proxy Statement for the 2008 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, 2007 (the "Proxy Statement"). The information required by this Item concerning our executive officers is incorporated by reference to the information to be set forth in the section of the Proxy Statement entitled "Executive Officers."

        Our Board of Directors has adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees. Stockholders may locate a copy of our Code of Business Conduct and Ethics on our website at http://www.allos.com or request a free copy from:

Allos Therapeutics, Inc.
Attention: Investor Relations
11080 CirclePoint Road, Suite 200
Westminster, CO 80020
Telephone: 303-426-6262

        To date, there have been no waivers under our Code of Business Conduct and Ethics. We will post any waivers, if and when granted, of our Code of Business Conduct and Ethics on our website.

ITEM 11.    EXECUTIVE COMPENSATION

        The information required by this Item regarding executive compensation is incorporated by reference to the information to be set forth in the sections of the Proxy Statement entitled "Executive Compensation," "Director Compensation," "Compensation Committee Interlocks and Insider Participation," and "Compensation Committee Report."

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

        The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2007:

Plan Category	Number of securities to be issued upon exercise of outstanding options and rights (a)	Weighted-average exercise price of outstanding options and rights (b)		Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	5,339,649	$	4.64	3,666,292	(1)(2)
Equity compensation plans not approved by security holders	1,065,781	$	4.90	1,108,231
Total	6,405,430	$	4.68	4,774,523	(1)(2)

(1)

As of December 31, 2007, 1,383,687 shares of common stock were authorized and unissued under our 2000 Stock Incentive Compensation Plan. On January 1 of each year during the term of our

55

2000 Stock Incentive Compensation Plan, beginning on January 1, 2001 through and including January 1, 2010, the share reserve under the 2000 Stock Incentive Compensation Plan is increased by the lesser of the following: (i) 2% of the total number of shares of common stock outstanding, (ii) 440,000 shares, or (iii) such smaller number of shares as determined by the Board of Directors. On January 1, 2008, the share reserve under our 2000 Stock Incentive Compensation Plan was increased by 440,000 shares.

(2)

Includes 2,282,605 shares of common stock available for future issuance under our 2001 Employee Stock Purchase Plan.

        Please see Note 4 to our Financial Statements included in Part IV, Item 15 of this report for a description of the material features of our 2002 Broad Based Equity Incentive Plan and 2006 Inducement Award Plan, each of which was adopted without the approval of our security holders.

Other Information

        Other information required by this Item regarding security ownership of certain beneficial owners and management is incorporated by reference to the information to be set forth in the section of the Proxy Statement entitled "Security Ownership of Certain Beneficial Owners and Management."

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

        The information required by this Item regarding certain relationships and related transactions and director independence is incorporated by reference to the information to be set forth in the sections of the Proxy Statement entitled "Transactions with Related Persons" and "Proposal 1—Election of Directors."

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

        The information required by this Item regarding principal accounting fees and services is incorporated by reference to the information to be set forth in the section of the Proxy Statement entitled "Proposal 2—Ratification of Selection of Independent Auditors."

56

PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)   The following documents are being filed as part of this report:

(1)

Financial Statements.

        Reference is made to the Index to Financial Statements of Allos Therapeutics, Inc. appearing on page F-1 of this report.

(2)

Financial Statement Schedules.

        All financial statement schedules have been omitted because they are not applicable or not required or because the information is included elsewhere in the Financial Statements or the Notes thereto.

(3)

Exhibits.

        The following is a list of exhibits filed as part of this report on Form 10-K. Where so indicated exhibits that were previously filed are incorporated by reference.

		Incorporated by Reference
					Filed Herewith
Exhibit No.	Description	Form	Filing Date	Number
3.01	Amended and Restated Certificate of Incorporation.	10-Q	8/7/2006	3.01
3.02	Certificate of Designation of Series A Junior Participating Preferred Stock.	10-Q	8/7/2006	3.02
3.03	Certificate of Amendment to Restated Certificate of Incorporation.	10-Q	8/7/2006	3.03
3.04	Amended and Restated Bylaws of Allos Therapeutics, Inc.	8-K	6/25/2007	3.04
4.01	Form of Common Stock Certificate.	S-1/A	3/17/2000	4.01
4.02	Reference is made to Exhibits 3.01, 3.02, 3.03 and 3.04.
4.03	Rights Agreement dated May 6, 2003 between Allos and Mellon Investor Services LLC.	8-K	5/9/2003	99.2
4.04	Form of Rights Certificate.	8-K	5/9/2003	99.3
4.05	Amendment to Rights Agreement dated March 4, 2005 between Allos and Mellon Investor Services LLC.	8-K	3/4/2005	4.06
4.06	Amendment to Rights Agreement dated January 29, 2007 between Allos and Mellon Investor Services LLC.	8-K	1/30/2007	4.1
10.01†	Form of Amended and Restated Indemnity Agreement between Allos and each of its directors and officers.	8-K	6/25/2007	10.01
10.02†	1995 Stock Option Plan, as amended.	S-1	1/26/2000	10.11
10.3†	2000 Stock Incentive Compensation Plan, as amended.	8-K	12/22/2005	10.1
10.3.1†	Form of Incentive Stock Option Letter Agreement under 2000 Stock Incentive Compensation Plan.	8-K	2/11/2005	99.1
10.3.2†	Form of Nonqualified Stock Option Letter Agreement under 2000 Stock Incentive Compensation Plan.	8-K	2/11/2005	99.2

57

10.3.3†	Form of Nonqualified Stock Option Letter Agreement for Non-Employee Directors under 2000 Stock Incentive Compensation Plan.	8-K	2/24/2006	10.1
10.4†	2001 Employee Stock Purchase Plan and form of Offering.	10-K	3/7/2001	10.26
10.4.1†	2001 Employee Stock Purchase Plan Offering (Series Beginning July 1, 2007).	8-K	6/25/2007	10.12.1
10.5*	Office Lease dated April 4, 2001 between Allos and Catellus Development Corporation.	10-Q	8/14/2001	10.27
10.5.1*	Amended and Restated Second Amendment to Lease dated December 9, 2002 between Allos and Catellus Development Corporation.	10-K	3/28/2003	10.27.1
10.5.2*	Third Amendment to Lease dated November 28, 2003 between Allos and Catellus Development Corporation.	10-K	3/5/2004	10.27.2
10.6†	2002 Broad Based Equity Incentive Plan.	S-8	1/16/2002	99.1
10.6.1†	Form of Stock Option Grant Notice under 2002 Broad Based Equity Incentive Plan.	10-K	3/16/2005	10.14.1
10.6.2†	Form of Stock Option Agreement under 2002 Broad Based Equity Incentive Plan.	10-K	3/16/2005	10.14.2
10.7	Securities Purchase Agreement dated March 2, 2005 between Allos and the Investors listed on the signature pages thereto.	8-K/A	3/10/2005	10.41
10.8	Registration Rights Agreement dated March 4, 2005 between Allos and the Investors listed on Schedule I thereto.	8-K/A	3/10/2005	10.42
10.9	Letter Agreement dated March 4, 2005 among Allos, Warburg Pincus Private Equity VIII, L.P., Warburg Pincus & Co. and Warburg Pincus LLC.	8-K	3/4/2005	10.43
10.10†	Separation Agreement dated March 1, 2006 between Allos and Michael E. Hart.	8-K	3/6/2006	10.1
10.10.1†	First Amendment to Separation Agreement dated March 9, 2006 between Allos and Michael E. Hart.	8-K	3/14/2006	10.3
10.10.2†	Second Amendment to Separation Agreement dated May 10, 2006 between Allos and Michael E. Hart.	8-K	5/16/2006	10.1
10.11†	Nonqualified Stock Option Letter Agreement dated March 3, 2006 between Allos and Michael E. Hart.	8-K	3/6/2006	10.2
10.12†	Summary of Compensation Arrangements for Non-Employee Directors.	10-Q	8/7/2007	10.32
10.13†	Restricted Stock Award Agreement dated March 9, 2006 between Allos and Paul L. Berns.	8-K	3/14/2006	10.2

58

10.14†	Consultant Agreement effective May 10, 2006 between Allos and Michael E. Hart.	8-K	5/16/2006	10.2
10.15†	Consultant Agreement effective May 10, 2006 between Allos and Marvin E. Jaffe, M.D.	8-K	5/16/2006	10.3
10.16†	2006 Inducement Award Plan, including forms of Stock Option Grant Notice with Stock Option Agreement and Restricted Stock Grant Notice with Restricted Stock Grant Agreement.	8-K	6/6/2006	10.1
10.17	Letter agreement dated January 28, 2007 among Allos, Baker Bros. Investments, L.P., Baker Bros. Investments II, L.P., Baker/Tisch Investments, L.P., Baker Biotech Fund I, L.P., 14159, L.P. and Baker Brothers Life Sciences, L.P.	8-K	1/30/2007	10.1
10.18*	License Agreement for 10-Propargyl-10-Deazaaminopterin "PDX" dated December 23, 2002 and amended May 9, 2006 between Allos and SRI International, Sloan-Kettering Institute for Cancer Research and Southern Research Institute.	10-Q	8/7/2007	10.45
10.18.1+	Second Amendment to License Agreement for 10-Propargyl-10-Deazaaminopterin "PDX" dated November 6, 2007 between Allos and SRI International, Sloan-Kettering Institute for Cancer Research and Southern Research Institute.				X
10.19†	Corporate Bonus Plan, as amended and restated effective December 11, 2007.				X
10.20†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Paul L. Berns.				X
10.21†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Pablo J. Cagnoni, M.D.				X
10.22†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and James V. Caruso.				X
10.23†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Marc H. Graboyes.				X
10.24†	Letter agreement, effective January 22, 2008, between Allos and Bruce K. Bennett.				X
23.01	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.				X
24.01	Power of Attorney (included on signature page hereto).				X

59

31.01	Rule 13a-14(a)/15d-14(a) Certification.	X
31.02	Rule 13a-14(a)/15d-14(a) Certification.	X
32.01#	Section 1350 Certification.	X

†

Indicates management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.

*

Indicates confidential treatment has been granted with respect to specific portions of this exhibit. Omitted portions have been filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

+

Indicates confidential treatment has been requested with respect to portions of this exhibit. Omitted portions have been filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

#

The certifications attached as Exhibit 32.01 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Allos Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.

60

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALLOS THERAPEUTICS, INC.
Date: February 27, 2008	By:	/s/  PAUL L. BERNS Paul L. Berns President and Chief Executive Officer

POWER OF ATTORNEY

        KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Paul L. Berns and David C. Clark, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and any of them or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant on February 27, 2008, and in the capacities indicated:

Name	Title
/s/  STEPHEN J. HOFFMAN Stephen J. Hoffman	Chairman of Board of Directors and Director
/s/  PAUL L. BERNS Paul L. Berns	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  DAVID C. CLARK David C. Clark	Vice President, Finance and Treasurer (Principal Financial and Accounting Officer)
/s/  MICHAEL D. CASEY Michael D. Casey	Director
/s/  STEWART HEN Stewart Hen	Director
/s/  JEFFREY R. LATTS Jeffrey R. Latts	Director

61

/s/  JONATHAN S. LEFF Jonathan S. Leff	Director
/s/  TIMOTHY P. LYNCH Timothy P. Lynch	Director
/s/  WILLIAM R. RINGO William R. Ringo	Director

62

Allos Therapeutics, Inc.

Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Changes in Stockholders' Equity (Deficit)	F-5
Statements of Cash Flows	F-10
Notes to Financial Statements	F-11

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
        Allos Therapeutics, Inc.:

        In our opinion, the accompanying balance sheets and the related statements of operations, changes in stockholders' equity (deficit), and cash flows present fairly, in all material respects, the financial position of Allos Therapeutics, Inc. (a development stage enterprise) at December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 and, cumulatively, for the period from September 1, 1992 (date of inception) to December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting, appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

        As discussed in Note 4 to the financial statements, the Company changed the manner in which it accounts for stock-based compensation in 2006.

        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
Denver, CO
February 25, 2008

F-2

ALLOS THERAPEUTICS, INC.

BALANCE SHEETS

			December 31,
			2007			2006
ASSETS
Current assets:
	Cash and cash equivalents		$	15,919,664		$	10,070,526
	Restricted cash			183,334			366,667
	Investments in marketable securities			41,836,566			22,725,525
	Prepaid research and development expenses			524,704			496,265
	Prepaid expenses and other assets			2,374,471			2,069,840
		Total current assets		60,838,739			35,728,823
Property and equipment, net				621,451			603,520
Other assets				—			49,247
		Total assets	$	61,460,190		$	36,381,590
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	1,191,849		$	400,133
	Accrued liabilities			7,689,338			6,431,521
		Total current liabilities		8,881,187			6,831,654
Commitments and contingencies (Note 8)
Stockholders' equity:
	Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding			—			—
	Series A Junior Participating Preferred Stock, $0.001 par value; 1,000,000 shares designated from authorized preferred stock; no shares issued or outstanding			—			—
	Common stock, $0.001 par value; 150,000,000 shares authorized; 67,641,943 and 56,695,633 shares issued and outstanding at December 31, 2007 and December 31, 2006, respectively			67,642			56,695
Additional paid-in capital				300,440,336			238,052,617
Deficit accumulated during the development stage				(247,928,975	)		(208,559,376	)
		Total stockholders' equity		52,579,003			29,549,936
		Total liabilities and stockholders' equity	$	61,460,190		$	36,381,590

The accompanying notes are an integral part of these financial statements.

F-3

ALLOS THERAPEUTICS, INC.

STATEMENTS OF OPERATIONS

												Cumulative Period from September 1, 1992 (date of inception) through December 31, 2007
			Years Ended December 31,
			2007			2006			2005
Operating expenses:
	Research and development		$	17,444,320		$	14,322,601		$	11,215,132		$	125,299,872
	Clinical manufacturing			5,547,411			2,283,907			1,265,663			34,612,106
	Marketing, general and administrative			19,672,014			14,876,273			9,043,768			102,830,541
	Restructuring and separation costs			—			645,666			380,085			1,663,821
		Total operating expenses		42,663,745			32,128,447			21,904,648			264,406,340
Loss from operations				(42,663,745	)		(32,128,447	)		(21,904,648	)		(264,406,340	)
Gain on settlement claims				—			—			—			5,110,083
Interest and other income, net				3,294,146			1,915,977			1,768,060			21,603,746
		Net loss		(39,369,599	)		(30,212,470	)		(20,136,588	)		(237,692,511	)
Dividend related to beneficial conversion feature of preferred stock				—			—			(623,489	)		(10,236,464	)
Net loss attributable to common stockholders			$	(39,369,599	)	$	(30,212,470	)	$	(20,760,077	)	$	(247,928,975	)
Net loss per share: basic and diluted			$	(0.60	)	$	(0.55	)	$	(0.45	)
Weighted average shares: basic and diluted				65,188,913			55,299,614			46,070,686

The accompanying notes are an integral part of these financial statements.

F-4

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

																	Deficit Accumulated During the Development Stage
		Common Stock			Preferred Stock							Notes Receivable From Stockholders								Total Stockholders' Equity (Deficit)
									Additional Paid-in Capital						Deferred Compensation
		Shares	Amount		Shares	Amount
Subscription receivable for common stock at $1.61 per share		—	$	90	—	$	—		$	—		$	—		$	—	$	—		$	90
Balance at December 31, 1992		—		90	—		—			—			—			—		—			90
	Subscription receivable for common stock at $1.61 per share	—		10	—		—			—			—			—		—			10
	Issuance of common stock for subscription receivable	992,000		892	—		—			(892	)		—			—		—			—
Net loss		—		—	—		—			—			—			—		(24,784	)		(24,784	)
Balance at December 31, 1993		992,000		992	—		—			(892	)		—			—		(24,784	)		(24,684	)
	Issuance of $.001 par value common stock in exchange for license agreement	248,000		248	—		—			39,752			—			—		—			40,000
	Issuance of Series A convertible preferred stock ($.001 par value) together with Series A and Series B stock warrants at $1.00 per share	—		—	700,000		704			529,023			—			—		—			529,727
	Issuance of Series A convertible preferred stock upon exercise of Series A warrants at $1.00 per share	—		—	1,300,000		1,300			1,298,700			—			—		—			1,300,000
	Accretion to redemption value of preferred stock	—		—	—		—			58,839			—			—		(58,839	)		—
Net loss		—		—	—		—			—			—			—		(898,929	)		(898,929	)
Balance at December 31, 1994		1,240,000		1,240	2,000,000		2,004			1,925,422			—			—		(982,552	)		946,114
	Issuance of Series A convertible preferred stock at $1.00 per share	—		—	3,000,000		3,000			2,973,454			—			—		—			2,976,454
	Accretion to redemption value of preferred stock	—		—	—		—			229,837			—			—		(229,837	)		—
Net loss		—		—	—		—			—			—			—		(2,384,176	)		(2,384,176	)
Balance at December 31, 1995		1,240,000		1,240	5,000,000		5,004			5,128,713			—			—		(3,596,565	)		1,538,392
	Issuance of Series B convertible preferred stock at $1.60 per share, net of issuance costs	—		—	5,032,500		5,033			7,992,705			—			—		—			7,997,738
	Cancellation of Series B warrants previously issued with Series A	—		—	—		(4	)		4			—			—		—			—
	Cancellation of Series A redemption rights	—		—	—		—			(288,676	)		—			—		288,676			—
	Issuance of common stock upon exercise of stock options for cash of $4,024 and notes receivable of $90,000 at $0.16 per share	582,950		583	—		—			93,441			(90,000	)		—		—			4,024
Net loss		—		—	—		—			—			—			—		(4,053,027	)		(4,053,027	)
Balance at December 31, 1996		1,822,950		1,823	10,032,500		10,033			12,926,187			(90,000	)		—		(7,360,916	)		5,487,127

F-5

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

														Deficit Accumulated During the Development Stage
		Common Stock		Preferred Stock						Notes Receivable From Stockholders						Total Stockholders' Equity (Deficit)
								Additional Paid-in Capital				Deferred Compensation
		Shares	Amount	Shares		Amount
Balance at December 31, 1996		1,822,950	1,823	10,032,500		10,033		12,926,187		(90,000	)	—		(7,360,916	)	5,487,127
	Issuance of common stock upon exercise of stock options for cash of $20,288 and notes receivable of $49,687 at $0.16-$0.40 per share	175,770	176	—		—		69,799		(49,687	)	—		—		20,288
Net loss		—	—	—		—		—		—		—		(6,512,591	)	(6,512,591	)
Balance at December 31, 1997		1,998,720	1,999	10,032,500		10,033		12,995,986		(139,687	)	—		(13,873,507	)	(1,005,176	)
	Issuance of Series C convertible preferred stock at $1.81 per share, net of issuance costs	—	—	9,944,750		9,945		17,937,102		—		—		—		17,947,047
	Issuance of common stock upon exercise of stock options for cash of $3,464 at $0.16-$0.40 per share	13,239	13	—		—		3,451		—		—		—		3,464
Net loss		—	—	—		—		—		—		—		(8,573,923	)	(8,573,923	)
Balance at December 31, 1998		2,011,959	2,012	19,977,250		19,978		30,936,539		(139,687	)	—		(22,447,430	)	8,371,412
	Issuance of Series C convertible preferred stock at $1.81 per share, net of issuance costs	—	—	5,311,036		5,311		9,529,532		—		—		—		9,534,843
	Issuance of common stock upon exercise of stock options for cash of $3,695 at $0.16-$0.56 per share	10,179	10	—		—		3,685		—		—		—		3,695
	Deferred compensation related to options	—	—	—		—		6,811,055		—		(4,442,294	)	—		2,368,761
	Beneficial conversion feature related to issuance of preferred stock	—	—	—		—		9,612,975		—		—		(9,612,975	)	—
Net loss		—	—	—		—		—		—		—		(11,287,740	)	(11,287,740	)
Balance at December 31, 1999		2,022,138	2,022	25,288,286		25,289		56,893,786		(139,687	)	(4,442,294	)	(43,348,145	)	8,990,971
	Issuance of 5,000,000 shares of common stock, net of issuance costs	5,000,000	5,000	—		—		82,764,396		—		—		—		82,769,396
	Conversion of preferred stock to common stock upon IPO	15,678,737	15,679	(25,288,286	)	(25,289	)	9,610		—		—		—		—
	Extinguishments of notes receivable	—	—	—		—		—		139,687		—		—		139,687
	Issuance of common stock upon exercise of stock options for cash of $73,855 at $0.16-$0.56 per share	254,001	254	—		—		73,601		—		—		—		73,855
	Deferred compensation related to options	—	—	—		—		16,860,998		—		(2,062,800	)	—		14,798,198
Net loss		—	—	—		—		—		—		—		(23,361,475	)	(23,361,475	)
Balance at December 31, 2000		22,954,876	22,955	—		—		156,602,391		—		(6,505,094	)	(66,709,620	)	83,410,632
	Issuance of common stock upon exercise of stock options for cash of $103,831 at $0.40-$2.42 per share	175,096	175	—		—		103,656		—		—		—		103,831
	Issuance of common stock upon exercise of purchase rights at an exercise price of $3.84 per share	9,225	9	—		—		35,433		—		—		—		35,442
	Stock compensation expense	—	—	—		—		283,512		—		—		—		283,512
	Deferred compensation related to options	—	—	—		—		(99,700	)	—		3,561,504		—		3,461,804
Net loss		—	—	—		—		—		—		—		(20,144,325	)	(20,144,325	)
Balance at December 31, 2001		23,139,197	23,139	—		—		156,925,292		—		(2,943,590	)	(86,853,945	)	67,150,896

F-6

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

																Deficit Accumulated During the Development Stage
		Common Stock			Preferred Stock						Notes Receivable From Stockholders								Total Stockholders' Equity (Deficit)
								Additional Paid-in Capital					Deferred Compensation
		Shares	Amount		Shares	Amount
Balance at December 31, 2001		23,139,197		23,139	—		—		156,925,292			—		(2,943,590	)		(86,853,945	)		67,150,896
	Issuance of common stock in private placement for $6.00 per share, net of issuance costs	2,500,000		2,500	—		—		14,929,273			—		—			—			14,931,773
	Issuance of common stock upon exercise of stock options for cash of $290,753 at $0.40-$7.38 per share	187,126		187	—		—		290,566			—		—			—			290,753
	Issuance of common stock upon exercise of purchase rights at an exercise price of $3.84-$6.39 per share	27,446		27	—		—		120,252			—		—			—			120,279
	Issuance of common stock upon exercise of warrants for equipment lease line	9,685		10	—		—		21,521			—		—			—			21,531
	Stock compensation expense	—		—	—		—		190,378			—		—			—			190,378
	Deferred compensation related to options	—		—	—		—		(1,456,577	)		—		1,842,124			—			385,547
Net loss		—		—	—		—		—			—		—			(25,768,974	)		(25,768,974	)
Balance at December 31, 2002		25,863,454		25,863	—		—		171,020,705			—		(1,101,466	)		(112,622,919	)		57,322,183
	Issuance of common stock upon exercise of stock options for cash of $75,686 at $.56-$2.42 per share	35,400		35	—		—		75,651			—		—			—			75,686
	Issuance of common stock upon exercise of purchase rights at an exercise price of $2.48-$2.58 per share	32,189		33	—		—		81,466			—		—			—			81,499
	Issuance of common stock in private placement for $2.32 per share together with common stock warrants for $3.14 per share, net of issuance costs	5,172,412		5,173	—		—		11,196,549			—		—			—			11,201,722
	Stock compensation expense	—		—	—		—		178,166			—		—			—			178,166
	Deferred compensation related to options	—		—	—		—		(1,137,244	)		—		815,890			—			(321,354	)
Net loss		—		—	—		—		—			—		—			(23,126,625	)		(23,126,625	)
Balance at December 31, 2003		31,103,455		31,104	—		—		181,415,293			—		(285,576	)		(135,749,544	)		45,411,277
	Issuance of common stock upon exercise of stock options for cash of $97,794 at $.40-$4.75 per share	35,935		36	—		—		97,758			—		—			—			97,794
	Issuance of common stock upon exercise of purchase rights at an exercise price of $1.85-$1.91 per share	36,393		36	—		—		68,239			—		—			—			68,275
	Stock issuance costs	—		—	—		—		(8,279	)		—		—			—			(8,279	)
	Stock compensation recovery	—		—	—		—		(170,118	)		—		—			—			(170,118	)
	Deferred compensation related to options	—		—	—		—		50,583			—		250,756			—			301,339
Net loss		—		—	—		—		—			—		—			(21,837,285	)		(21,837,285	)
Balance at December 31, 2004		31,175,783	$	31,176	—	$	—	$	181,453,476		$	—	$	(34,820	)	$	(157,586,829	)	$	23,863,003

F-7

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

																		Deficit Accumulated During the Development Stage
		Common Stock			Preferred Stock								Notes Receivable From Stockholders								Total Stockholders' Equity (Deficit)
										Additional Paid-in Capital					Deferred Compensation
		Shares	Amount		Shares		Amount
Balance at December 31, 2004		31,175,783	$	31,176	—		$	—		$	181,453,476		$	—	$	(34,820	)	$	(157,586,829	)	$	23,863,003
	Issuance of common stock upon exercise of stock options for cash of $197,513 at $.16-$1.78 per share	352,081		352	—			—			197,161			—		—			—			197,513
	Issuance of common stock upon exercise of purchase rights at an exercise price of $1.82 and $1.85 per share	26,675		27	—			—			48,804			—		—			—			48,831
	Issuance of Series A Exchangeable Preferred Stock at $22.10 per share, net of issuance costs	—		—	2,352,443			2,352			48,837,479			—		—			—			48,839,831
	Beneficial conversion feature related to issuance of preferred stock	—		—	—			—			623,489			—		—			(623,489	)		—
	Conversion of Series A Exchangeable Preferred Stock to common stock	23,524,430		23,524	(2,352,443	)		(2,352	)		(21,172	)		—		—			—			—
	Stock compensation expense	—		—	—			—			443,644			—		—			—			443,644
	Deferred compensation related to options	—		—	—			—			(604	)		—		34,820			—			34,216
Net loss		—		—	—			—			—			—		—			(20,136,588	)		(20,136,588	)
Balance at December 31, 2005		55,078,969	$	55,079	—		$	—		$	231,582,277		$	—	$	—		$	(178,346,906	)	$	53,290,450
	Issuance of common stock upon exercise of stock options for cash of $561,097 at $.40-$3.20 per share	413,680		414	—			—			560,683			—		—			—			561,097
	Issuance of common stock upon exercise of purchase rights at an exercise price of $1.82, $1.96 and $3.05 per share	44,319		44	—			—			90,627			—		—			—			90,671
	Issuance of common stock upon net exercise of warrants at an exercise price of $3.14 per share	37,459		37	—			—			(37	)		—		—			—			—
	Issuance of common stock upon exercise of warrants for cash of $2,233,187 at an exercise price of $3.14 per share	711,206		711	—			—			2,232,476			—		—			—			2,233,187
	Issuance of restricted stock	410,000		410	—			—			(410	)		—		—			—			—
	Stock compensation expense	—		—	—			—			3,587,001			—		—			—			3,587,001
Net loss		—		—	—			—			—			—		—			(30,212,470	)		(30,212,470	)
Balance at December 31, 2006		56,695,633	$	56,695	—		$	—		$	238,052,617		$	—	$	—		$	(208,559,376	)	$	29,549,936

F-8

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

															Deficit Accumulated During the Development Stage
		Common Stock			Preferred Stock						Notes Receivable From Stockholders							Total Stockholders' Equity (Deficit)
								Additional Paid-in Capital					Deferred Compensation
		Shares	Amount		Shares	Amount
Balance at December 31, 2006		56,695,633	$	56,695	—	$	—	$	238,052,617		$	—	$	—	$	(208,559,376	)	$	29,549,936
	Issuance of common stock upon exercise of stock options for cash of $3,696,811 at $.40-$6.38 per share	1,156,471		1,157	—		—		3,695,654			—		—		—			3,696,811
	Issuance of common stock upon exercise of purchase rights at an exercise price of $1.82-$3.89 per share	41,148		41	—		—		124,805			—		—		—			124,846
	Issuance of common stock upon net exercise of warrants at an exercise price of $3.14 per share	112,106		112	—		—		(112	)		—		—		—			—
	Issuance of common stock upon exercise of warrants for cash of $1,669,177 at an exercise price of $3.14 per share	531,585		532	—		—		1,668,645			—		—		—			1,669,177
	Issuance of common stock net of offering costs of $3,742,793, at $6.00 per share	9,000,000		9,000	—		—		50,248,207			—		—		—			50,257,207
	Issuance of restricted stock	105,000		105	—		—		(105	)		—		—		—			—
	Stock compensation expense	—		—	—		—		6,650,625			—		—		—			6,650,625
Net loss		—		—	—		—		—			—		—		(39,369,599	)		(39,369,599	)
Balance at December 31, 2007		67,641,943	$	67,642	—	$	—	$	300,440,336		$	—	$	—	$	(247,928,975	)	$	52,579,003

The accompanying notes are an integral part of these financial statements.

F-9

ALLOS THERAPEUTICS, INC.

STATEMENTS OF CASH FLOWS

														Cumulative Period from September 1, 1992 (date of inception) through December 31, 2007
					Years Ended December 31,
					2007			2006			2005
Cash Flows From Operating Activities:
	Net loss				$	(39,369,599	)	$	(30,212,470	)	$	(20,136,588	)	$	(237,692,511	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization				361,045			312,251			401,106			3,448,309
		Stock-based compensation expense				6,650,625			3,587,001			477,860			32,281,719
		Write-off of long-term investment				—			—			—			1,000,000
		Other				—			—			179			99,121
		Changes in operating assets and liabilities:
			Prepaid expenses and other assets			(283,823	)		(2,054,486	)		233,786			(2,889,175	)
			Interest receivable on investments			(231,201	)		179,326			(190,882	)		(665,309	)
			Accounts payable			791,716			34,921			(105,259	)		1,191,849
			Accrued liabilities			1,257,817			3,006,617			1,584,898			7,689,338
				Net cash used in operating activities		(30,823,420	)		(25,146,840	)		(17,734,900	)		(195,536,659	)
Cash Flows From Investing Activities:
	Acquisition of property and equipment					(378,976	)		(228,043	)		(108,771	)		(3,815,754	)
	Purchases of marketable securities					(89,014,032	)		(33,847,513	)		(69,931,521	)		(515,658,226	)
	Proceeds from sales of marketable securities					70,134,192			62,000,000			41,804,925			474,486,969
	Purchase of long-term investment					—			—			—			(1,000,000	)
	Payments received on notes receivable					—			—			—			49,687
				Net cash (used in) provided by investing activities		(19,258,816	)		27,924,444			(28,235,367	)		(45,937,324	)
Cash Flows From Financing Activities:
	Principal payments under capital leases					—			—			—			(422,088	)
	Proceeds from sales leaseback					—			—			—			120,492
	Release (pledge) of restricted cash					183,333			183,333			—			(183,334	)
	Proceeds from issuance of convertible preferred stock, net of issuance costs					—			—			48,839,831			89,125,640
	Proceeds from issuance of common stock associated with stock options, stock warrants and employee stock purchase plan					5,490,834			2,884,955			246,344			9,601,118
	Proceeds from issuance of common stock, net of issuance costs					50,257,207			—			—			159,151,819
				Net cash provided by financing activities		55,931,374			3,068,288			49,086,175			257,393,647
Net increase in cash and cash equivalents						5,849,138			5,845,892			3,115,908			15,919,664
Cash and cash equivalents, beginning of period						10,070,526			4,224,634			1,108,726			—
Cash and cash equivalents, end of period					$	15,919,664		$	10,070,526		$	4,224,634		$	15,919,664
Supplemental Schedule of Cash and Non-cash Operating and Financing Activities:
	Cash paid for interest				$	—		$	—		$	—		$	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
	Conversion of preferred stock to common stock					—			—			48,839,831			89,125,640

The accompanying notes are an integral part of these financial statements.

F-10

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

        Unless the context otherwise requires, references in this report to "Allos," the "Company," "we," "us" and "our" refer to Allos Therapeutics, Inc.

1. Formation and Business of the Company

        We are a biopharmaceutical company focused on developing and commercializing innovative small molecule drugs for the treatment of cancer. We have two product candidates that are currently under development, PDX (pralatrexate) and RH1.

•

PDX (pralatrexate) is a novel, small molecule chemotherapeutic agent that inhibits dihydrofolate reductase, or DHFR, a folic acid (folate)-dependent enzyme involved in the building of nucleic acid, or DNA, and other processes. PDX was rationally designed for efficient transport into tumor cells via the reduced folate carrier, or RFC-1, and effective intracellular drug retention. We believe these biochemical features, together with preclinical and clinical data in a variety of tumors, suggest that PDX may have a favorable safety and efficacy profile relative to methotrexate and other related DHFR inhibitors. We believe PDX has the potential to be delivered as a single agent or in combination therapy regimens.



•

RH1 is a small molecule chemotherapeutic agent that we believe is bioactivated by the enzyme DT-diaphorase, or DTD, also known as NAD(P)H quinone oxidoreductase, or NQ01. We believe DTD is over-expressed in many tumors, relative to normal tissue, including lung, colon, breast and liver tumors. We believe that because RH1 is bioactivated in the presence of DTD, it has the potential to provide targeted drug delivery to these tumor types while limiting the amount of toxicity to normal tissue.

        In mid-2007, we discontinued the development of EFAPROXYN, our former lead product candidate, after announcing top-line results from ENRICH, a Phase 3 clinical trial of EFAPROXYN plus whole brain radiation therapy, or WBRT, in women with brain metastases originating from breast cancer. The study failed to achieve its primary endpoint of demonstrating a statistically significant improvement in overall survival in patients receiving EFAPROXYN plus WBRT, compared to patients receiving WBRT alone. We are currently pursuing the sale of our rights to EFAPROXYN although we may not receive any material consideration for any sale.

        We incorporated in the Commonwealth of Virginia on September 1, 1992 as HemoTech Sciences, Inc. and filed amended Articles of Incorporation to change our name to Allos Therapeutics, Inc. on October 19, 1994. We reincorporated in Delaware on October 28, 1996. We operate as a single business segment.

        Since our inception in 1992, we have not generated any revenue from product sales and have experienced significant net losses and negative cash flows from operations. We have incurred these losses principally from costs incurred in our research and development programs, our clinical manufacturing, and from our marketing, general and administrative expenses. Our primary business activities have been focused on the development of EFAPROXYN (a program which we discontinued in mid-2007), PDX and RH1.

        Our ability to generate revenue and achieve profitability is dependent on our ability, alone or with partners, to successfully complete the development of our product candidates, conduct clinical trials, obtain the necessary regulatory approvals, and manufacture and market our product candidates. The timing and costs to complete the successful development of any of our product candidates are highly uncertain, and therefore difficult to estimate. The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, require the

F-11

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

1. Formation and Business of the Company (Continued)

expenditure of substantial resources. Clinical development timelines, likelihood of success and total costs vary widely and are impacted by a variety of risks and uncertainties. Because of these risks and uncertainties, we cannot predict when or whether we will successfully complete the development of any of our product candidates or the ultimate costs of such efforts. Due to these same factors, we cannot be certain when, or if, we will generate any revenue or net cash inflow from any of our current product candidates.

        Even if our clinical trials demonstrate the safety and effectiveness of our product candidates in their target indications, we do not expect to be able to record commercial sales for any of our product candidates until 2009 at the earliest. We expect to incur significant and growing net losses for the foreseeable future as a result of our research and development programs and the costs of preparing for the potential commercial launch of PDX. Although the size and timing of our future net losses are subject to significant uncertainty, we expect them to increase over the next several years as we continue to fund our development programs and prepare for the potential commercial launch of PDX.

        As of December 31, 2007, we had $57.8 million in cash, cash equivalents, and investments in marketable securities. Based upon the current status of our product development plans, we believe that our cash, cash equivalents, and investments in marketable securities as of December 31, 2007 should be adequate to support our operations through at least the first quarter of 2009, although there can be no assurance that this can, in fact, be accomplished. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

        We anticipate continuing our current development programs and/or beginning other long-term development projects involving our product candidates. These projects may require many years and substantial expenditures to complete and may ultimately be unsuccessful. Therefore, we will need to obtain additional funds from outside sources to continue research and development activities, fund operating expenses, pursue regulatory approvals and build sales and marketing capabilities, as necessary. If we are unable to raise sufficient additional funds to support our operations, we may be required to delay, reduce the scope of or eliminate one or more of our development programs. However, our actual capital requirements will depend on many factors, including:

•

the status of our product development programs;



•

the time and cost involved in conducting clinical trials and obtaining regulatory approvals;



•

the time and cost involved in filing, prosecuting and enforcing patent claims;



•

competing technological and market developments; and



•

our ability to market and distribute our future products and establish new collaborative and licensing arrangements.

2. Summary of Significant Accounting Policies

Basis of Presentation

        We have not generated any revenue to date and our activities have consisted primarily of developing products, raising capital and recruiting personnel. Accordingly, we are considered to be in

F-12

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

the development stage at December 31, 2007, as defined in Statement of Financial Accounting Standards ("SFAS") No. 7, Accounting and Reporting by Development Stage Enterprises.

Use of Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of expenses during the reporting period. Actual results could differ from these estimates.

Cash, Cash Equivalents and Investments in Marketable Securities

        All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The carrying values of our cash equivalents and investments in marketable securities approximate their market values based on quoted market prices. We account for investments in marketable securities in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. Investments in marketable securities are classified as held to maturity and are carried at cost plus accrued interest. Our cash and cash equivalents are maintained in a financial institution in amounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe such accounts are not exposed to any significant credit risk in this area. We place investments in high-quality securities in accordance with our investment policy. Substantially all of our investments in marketable securities as of December 31, 2007 are held in corporate notes with remaining maturities ranging from one to five months.

Restricted Cash

        On May 24, 2001, $550,000 of cash was pledged as collateral on a letter of credit related to our building lease and was classified as restricted cash on the balance sheet. During both 2007 and 2006, in accordance with the terms of the building lease, the amount of the letter of credit was reduced by $183,333. The remaining amount of $183,334 on the letter of credit is classified as restricted cash on the balance sheet as of December 31, 2007.

Prepaid Research and Development Expenses

        Research and development expenditures are charged to expense as incurred. In accordance with certain research and development agreements, we are obligated to make certain upfront payments upon execution of the agreement. We record these upfront payments as prepaid research and development expenses. Such payments are recorded to research and development expense as services are performed. We evaluate on a quarterly basis whether events and circumstances have occurred that may indicate impairment of remaining prepaid research and development expenses.

F-13

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Prepaid Expenses and Other Assets

        Prepaid expenses and other assets are comprised of the following:

	December 31,
	2007		2006
Prepaid expenses and other assets	$	615,471	$	320,840
Receivable related to pending litigation settlement (see Note 8)		1,759,000		1,749,000
	$	2,374,471	$	2,069,840

Property and Equipment

        Property and equipment is recorded at cost and is depreciated using the straight-line method over estimated useful lives. Depreciation and amortization expense was $361,045, $312,251 and $401,106 for the years ended December 31, 2007, 2006 and 2005, respectively, and $3,448,309 for the cumulative period from inception through December 31, 2007.

        The components of property and equipment are as follows:

	December 31,
							Estimated Lives
	2007			2006
Computer hardware and software	$	1,520,157		$	1,291,675		3 years
Office furniture and equipment		1,344,008			1,244,924		5-7 years
Leasehold improvements		394,740			394,740		7 years
Lab equipment		76,763			76,763		5 years
		3,335,668			3,008,102
Less accumulated depreciation and amortization		(2,714,217	)		(2,404,582	)
Property and equipment, net	$	621,451		$	603,520

Long-lived Assets

        Long-lived assets, consisting primarily of property and equipment, are reviewed for impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparison of the assets' book value to future net undiscounted cash flows the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets.

F-14

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Accounts Payable

        Accounts payable are comprised of the following:

	December 31,
	2007		2006
Trade accounts payable	$	1,191,849	$	388,133
Related parties		—		12,000
	$	1,191,849	$	400,133

Accrued liabilities

        Accrued liabilities are comprised of the following:

	December 31,
	2007		2006
Accrued personnel costs	$	2,122,805	$	1,481,849
Accrued litigation settlement costs (see Note 8)		2,000,000		2,000,000
Accrued research and development expenses		1,571,975		1,430,417
Accrued clinical manufacturing expenses		1,259,799		655,552
Accrued expenses—other		696,027		436,437
Accrued restructuring and separation costs (see Note 5)		38,732		427,266
	$	7,689,338	$	6,431,521

        During the year ended December 31, 2007, we recorded $307,817 in research and development expenses and $117,280 in clinical manufacturing expenses related to the discontinuation of the EFAPROXYN development program. These expenses represent estimated costs to be incurred by contract research organizations in connection with closing out our EFAPROXYN clinical trials and estimated costs for the destruction and storage of EFAPROXYN bulk drug substance and formulated drug product. As of December 31, 2007, $144,501 remains accrued, with approximately $280,596 in payments made since the program was discontinued.

Fair Value of Financial Instruments

        Our financial instruments include cash and cash equivalents, investments in marketable securities, prepaid expenses, accounts payable and accrued liabilities. The carrying amounts of financial instruments approximate their fair value due to their short maturities.

Stock-Based Compensation

        We adopted SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R") effective January 1, 2006. Under the provisions of SFAS 123R, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period of the award. Prior to the adoption of SFAS 123R, we accounted for grants of stock-based awards according to the intrinsic value method as prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") and related Interpretations.

F-15

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

        In March 2005, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 107 ("SAB 107") relating to SFAS 123R. We applied the provisions of SAB 107 in connection with our adoption of SFAS 123R. We adopted SFAS 123R using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006, the first day of our fiscal year 2006. Our financial statements as of and for the years ended December 31, 2007 and 2006 reflect the impact of SFAS 123R (see Note 4). In accordance with the modified prospective transition method, our financial statements for prior periods have not been restated to reflect, and do not include, the impact of SFAS 123R.

        In November 2005, the Financial Accounting Standards Board ("FASB") issued Staff Position ("FSP") No. FAS 123(R)-3, Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards ("FSP 123R-3"). We elected to adopt the alternative transition method provided in FSP 123R-3 for calculating the tax effects of stock-based compensation pursuant to SFAS 123R. The alternative transition method includes simplified methods to establish the beginning balance of the additional paid-in capital ("APIC") pool related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and our Statements of Cash Flows of the tax effects of employee stock-based compensation awards that are outstanding upon adoption of SFAS 123R. This adoption did not have an impact on our financial statements.

        See Note 4—"Stock-Based Compensation Plans" for additional details regarding the impact of our stock based compensation plans on our financial statements.

Research and Development

        Research and development expenditures are charged to expense as incurred. Research and development expenses include the costs of certain personnel, basic research, preclinical studies, clinical trials, regulatory affairs, biostatistical data analysis, patents and licensing fees for our product candidates. We record upfront fees and milestone payments made under our licensing agreements for our product candidates as research and development expense as the services are performed. We accrue research and development expenses for activity as incurred during the fiscal year and prior to receiving invoices from clinical sites and third party clinical and preclinical research organizations. We accrue external costs for clinical and preclinical studies based on an evaluation of the following: the progress of the studies, including patient enrollment, dosing levels of patients enrolled, estimated costs to dose patients, invoices received, and contracted costs with clinical sites and third party clinical and preclinical research organizations. Significant judgments and estimates must be made and used in determining the accrued balance in any accounting period. Actual results could differ from those estimates. During the years ended December 31, 2007, 2006, and 2005, we did not have any changes in estimates that would have resulted in material adjustments to research and development expenses accrued in the prior period. However, during the quarter ended December 31, 2006, we did change our estimate relating to certain costs for our Phase 3 ENRICH trial for EFAPROXYN as a result of new information, which resulted in a reduction of research and development expenses of approximately $400,000 and a corresponding decrease in accrued research and development expenses as of December 31, 2006.

Clinical Manufacturing

        Clinical manufacturing expenses include the costs of certain personnel and third party manufacturing costs for our product candidates for use in clinical trials and preclinical studies, and

F-16

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

certain costs associated with pre-commercial scale-up of manufacturing to support anticipated regulatory and potential commercial requirements. Our finished drug inventory is expensed to clinical manufacturing since we are still a development stage company and we have not received regulatory approval to market our product candidates. If and when we receive regulatory approval, we will be required to capitalize any future manufacturing costs for our marketed products at the lower of cost or market and then expense the sold inventory as a component of cost of goods sold.

Income Taxes

        Income taxes are accounted for under SFAS No. 109, Accounting for Income Taxes ("SFAS 109"). Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities at each year end and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances have been established to reduce the Company's deferred tax assets to zero, as we believe that it is more likely than not that such assets will not be realized.

Net Loss Per Share

        Net loss per share is calculated in accordance with SFAS No. 128, Earnings Per Share ("SFAS 128"). Under the provisions of SFAS 128, basic net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all dilutive potential common stock outstanding during the period, including stock options, restricted stock, stock warrants and shares to be issued under our employee stock purchase plan.

        Diluted net loss per share is the same as basic net loss per share for all periods presented because any potential dilutive common shares were anti-dilutive due to our net loss (as including such shares would decrease our basic net loss per share). Potential dilutive common shares that would have been included in the calculation of diluted earnings per share if we had net income are as follows:

	Year ended December 31,
	2007	2006	2005
Common stock options	1,630,431	1,142,205	233,063
Restricted stock	438,226	410,000	—
Common stock warrants	262,132	255,210	—
	2,330,789	1,807,415	233,063

Reclassifications

        Certain amounts in Note 6, Income Taxes, were reclassified to conform to the current year presentation.

Recent Accounting Pronouncements

        In September 2006, the FASB issued SFAS 157, Fair Value Measurements, which defines fair value, provides a framework for measuring fair value, and expands the disclosures required for fair value

F-17

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

measurements. SFAS 157 applies to other accounting pronouncements that require fair value measurements; it does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and we are required to adopt it on January 1, 2008. The application of SFAS 157 to certain items has been deferred and will be effective for fiscal years beginning after November 15, 2008 and interim periods with that year. Although we will continue to evaluate the application of SFAS 157, management does not currently believe adoption of this pronouncement will have a material impact on our results of operations or financial position.

        In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115, which is effective for fiscal years beginning after November 15, 2007 and we are required to adopt it on January 1, 2008. This statement permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates. Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. We are currently evaluating the potential impact of this statement.

        In June 2007, the Emerging Issues Task Force ("EITF") issued a consensus, EITF 07-3, Advance Payments for Research and Development Activities, which states that non-refundable advance payments for goods that will be used or services that will be performed in future research and development activities should be deferred and capitalized until the goods have been delivered or the related services have been rendered. EITF 07-3 is to be applied prospectively for new contractual arrangements entered into in fiscal years beginning after December 15, 2007. We do not expect that EITF 07-3 will result in a material change to our current accounting practice.

        In November 2007, the EITF issued a consensus, EITF 07-01, Accounting for Collaboration Arrangements Related to the Development and Commercialization of Intellectual Property, which is focused on how the parties to a collaborative agreement should account for costs incurred and revenue generated on sales to third parties, how sharing payments pursuant to a collaboration agreement should be presented in the income statement and certain related disclosure questions. EITF 07-1 is to be applied retrospectively for collaboration arrangements in fiscal years beginning after December 15, 2008. We currently do not have any such arrangements.

        In December 2007, the FASB issued SFAS 141(R), Business Combinations. This Statement replaces SFAS 141, Business Combinations, and requires an acquirer to recognize the assets acquired, the liabilities assumed, including those arising from contractual contingencies, any contingent consideration, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the statement. SFAS 141(R) also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values (or other amounts determined in accordance with SFAS 141(R)). In addition, SFAS 141(R)'s requirement to measure the noncontrolling interest in the acquiree at fair value will result in recognizing the goodwill attributable to the noncontrolling interest in addition to that attributable to the acquirer. SFAS 141(R) amends SFAS No. 109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. It also amends SFAS 142, Goodwill and Other Intangible Assets, to, among other things, provide guidance on

F-18

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

the impairment testing of acquired research and development intangible assets and assets that the acquirer intends not to use. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently evaluating the potential impact of this Statement.

        In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. SFAS 160 amends Accounting Research Bulletin 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 also changes the way the consolidated income statement is presented by requiring consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent owners and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for fiscal periods, and interim periods within those fiscal years, beginning on or after December 15, 2008. We are currently evaluating the potential impact of this statement.

3. Stockholders' Equity

Common Stock

2000 Initial Public Offering

        On March 27, 2000, the SEC declared effective our Registration Statement on Form S-1. Pursuant to this Registration Statement, we completed an Initial Public Offering of 5,000,000 shares of our common stock at a price of $18.00 per share (the "IPO"). Proceeds to us from the IPO, after calculation of the underwriters' discount and commission, totaled approximately $82.8 million, net of offering costs of approximately $1.0 million (excluding underwriters discounts and commissions). Concurrent with the closing of the IPO, all outstanding shares of our convertible preferred stock were automatically converted into 15,678,737 shares of common stock.

        Concurrent with the closing of our IPO, our Certificate of Incorporation was amended to authorize 10,000,000 shares of undesignated preferred stock, none of which were issued or outstanding at December 31, 2007. Our Board of Directors is authorized to fix the designation, powers, preferences, and rights of any such series.

2002 Private Placement

        In April 2002, we completed a private placement of 2,500,000 shares of common stock at a purchase price of $6.00 per share to Perseus-Soros BioPharmaceutical Fund, L.P. for an aggregate purchase price of $15.0 million, net of $100,000 in issuance costs, which resulted in net cash proceeds to us of approximately $14.9 million.

F-19

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

3. Stockholders' Equity (Continued)

2003 Private Placement

        In November 2003, we completed a private placement of 5,172,412 shares of common stock at a purchase price of $2.32 per share to various purchasers for an aggregate purchase price of $12.0 million, net of $800,000 in issuance costs, which resulted in net cash proceeds to us of approximately $11.2 million. The purchase price was privately negotiated with the purchasers to represent an approximately 16% discount to the market value of our common stock on November 14, 2003.

2005 Series A Exchangeable Preferred Stock Financing

        In March 2005, we entered into a Securities Purchase Agreement with Warburg Pincus Private Equity VIII, L.P. ("Warburg") and certain other investors pursuant to which we issued and sold 2,352,443 shares of Series A Exchangeable Preferred Stock (the "Exchangeable Preferred"), at a price per share of $22.10 (the "Preferred Purchase Price"), for aggregate gross proceeds of approximately $52.0 million (the "Preferred Stock Financing"). We incurred offering expenses of $3.2 million in connection with the sale of Exchangeable Preferred, resulting in net cash proceeds to the Company of approximately $48.8 million. The shares of Exchangeable Preferred were sold under our shelf Registration Statement on Form S-3 (File No. 333-113353) declared effective by the Securities and Exchange Commission on April 21, 2004.

        On May 18, 2005, at our 2005 Annual Meeting of Stockholders, our stockholders voted to approve the issuance of shares of our common stock upon exchange of all of the outstanding shares of Exchangeable Preferred. As a result of such approval, we issued a total of 23,524,430 shares of common stock upon exchange of 2,352,443 shares of Exchangeable Preferred (the "Share Exchange").

        The Preferred Purchase Price represented a 7.5% discount to the 20-day trailing average closing price of our common stock on the Nasdaq National Market as of March 2, 2005, calculated on an as-exchanged for common stock basis. In connection with the Share Exchange, we recorded a deemed dividend related to the beneficial conversion feature of the Exchangeable Preferred equal to $623,489, representing the difference between the effective conversion price per share of common stock and the market value per share of common stock as of the closing date of the Preferred Stock Financing. As reflected on the Statements of Operations, this dividend increases the net loss attributable to common stockholders for the year ended December 31, 2005.

        In connection with the sale of Exchangeable Preferred, we entered into a Registration Rights Agreement between us and the purchasers of Exchangeable Preferred. Pursuant to this Registration Rights Agreement, beginning on March 4, 2007, the purchasers of Exchangeable Preferred became entitled to certain registration rights with respect to the shares of common stock that were issued upon exchange of the Exchangeable Preferred.

        Pursuant to the Securities Purchase Agreement, for so long as Warburg owns at least two-thirds of the shares of common stock issued upon exchange of such Exchangeable Preferred, we will nominate and use our reasonable best efforts to cause to be elected and cause to remain as directors on our Board of Directors two individuals designated by Warburg (each, an "Investor Designee" and collectively, the "Investor Designees"). If Warburg no longer has the right to designate two members of our Board of Directors, then, for so long as Warburg owns at least 50% of the shares of common stock issued upon exchange of such Exchangeable Preferred, we will nominate and use our reasonable best

F-20

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

3. Stockholders' Equity (Continued)

efforts to cause to be elected and cause to remain as a director on our Board of Directors, one Investor Designee. In addition, subject to applicable law and the rules and regulations of the SEC and the Nasdaq Stock Market, we will use our reasonable best efforts to cause one of the Investor Designees to be a member of each principal committee of our Board of Directors; however, our Board of Directors has determined, based on its analysis of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, that the Investor Designees are not eligible to serve as members of the Audit Committee of the Board of Directors due to the size of Warburg's ownership interest. Effective upon the closing of the sale of Exchangeable Preferred to Warburg on March 4, 2005, Messrs. Stewart Hen and Jonathan Leff, each of whom is a Managing Director of Warburg, were appointed to our Board of Directors pursuant to Warburg's right to nominate directors.

        On November 7, 2005, we filed a Certificate of Elimination of Series A Exchangeable Preferred Stock (the "Certificate of Elimination") with the Secretary of State of the State of Delaware. The Certificate of Elimination had the effect of eliminating from our Restated Certificate of Incorporation, as amended, all matters with respect to the Series A Exchangeable Preferred Stock set forth in the Certificate of Designations, Number, Voting Power, Preferences and Rights of Series A Exchangeable Preferred Stock (the "Certificate of Designations") filed with the Secretary of State of the State of Delaware on March 3, 2005. As a result of the Certificate of Elimination, all 2,714,932 shares of Series A Exchangeable Preferred Stock authorized pursuant to the Certificate of Designations have resumed their status as authorized and unissued Preferred Stock as of November 7, 2005.

2007 Common Stock Financing

        On February 2, 2007, we sold 9,000,000 shares of our common stock in an underwritten offering at a price of $6.00 per share (the "February 2007 Financing"). We received net proceeds from the offering of approximately $50.3 million, after deducting underwriting commissions of approximately $3.2 million and other offering expenses of approximately $503,000. The shares of common stock were sold under our shelf Registration Statement on Form S-3 (File No. 333-134965), declared effective by the SEC on July 10, 2006.

        Baker Brothers Life Sciences, L.P. and certain other affiliated funds (collectively "Baker") purchased 3,300,000 shares of common stock in the February 2007 Financing. As a result of such purchase, Baker held in excess of 15% of our outstanding common stock following the closing of the February 2007 Financing. In connection with the February 2007 Financing, Baker entered into a standstill agreement with the Company, agreeing not to pursue, for four years, certain activities the purpose or effect of which may be to change or influence control of the Company.

F-21

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

3. Stockholders' Equity (Continued)

Common Stock Reserved for Future Issuance

        At December 31, 2007, we have reserved shares of common stock for future issuance as follows:

		Outstanding at December 31, 2007	Available for grant at December 31, 2007	Shares of Common Stock Reserved at December 31, 2007
1995 Stock Option Plan		353,528	—	353,528
2000 Stock Incentive Compensation Plan		4,986,121	1,383,687	6,369,808
2001 Employee Stock Purchase Plan		—	2,282,605	2,282,605
2002 Broad Based Equity Incentive Plan		415,781	443,231	859,012
2006 Inducement Award Plan		650,000	665,000	1,315,000
	Total for Equity Incentive Plans	6,405,430	4,774,523	11,179,953

Stock Warrants

        In November 2003, in conjunction with the private placement of 5,172,412 shares of common stock to various purchasers, we issued warrants to purchase 1,706,893 shares of common stock at an exercise price of $3.14 per share with a life of four years. There were 748,187 and 958,706 of these warrants exercised during 2007 and 2006, respectively. As of December 31, 2007, none of these warrants remained outstanding.

Stockholder Rights Plan

        In May 2003, we designated 1,000,000 shares of our authorized Preferred Stock as Series A Junior Participating Preferred Stock, par value $0.001 per share, pursuant to a Stockholder Rights Plan approved by our Board of Directors under which all stockholders of record as of May 28, 2003 received a dividend distribution of one preferred share purchase right (a "Right") for each outstanding share of our common stock. The Rights trade with the common stock and no separate Right certificates will be distributed until such time as the Rights become exercisable in accordance with the Stockholder Rights Plan. The Stockholder Rights Plan is intended as a means to guard against abusive takeover tactics and to provide for fair and equal treatment for all stockholders in the event that an unsolicited attempt is made to acquire us.

        In connection with the sale of shares of Exchangeable Preferred to Warburg in March 2005, we amended the Stockholder Rights Plan to provide that Warburg and its affiliates will be exempt from the Stockholder Rights Plan, unless Warburg and its affiliates become, without the prior consent of our Board of Directors, the beneficial owner of more than 44% of our common stock.

        In connection with the acquisition of shares of our common stock by Baker in the February 2007 Financing, we amended the Stockholder Rights Plan to provide that Baker will be exempt from the Stockholder Rights Plan, unless Baker becomes, without the Company's prior consent, the beneficial owner of more than 20% of our common stock.

F-22

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

3. Stockholders' Equity (Continued)

        Until the Rights become exercisable, the Rights will have no dilutive impact on our earnings per share data. The Rights are protected by customary anti-dilution provisions. As of December 31, 2007, no shares of Series A Junior Participating Preferred Stock were issued or outstanding.

4. Stock-Based Compensation Plans

Expense Information under SFAS 123R

        In accordance with the modified prospective transition method of SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R"), stock-based compensation expense for the years ended December 31, 2007 and 2006 has been recognized in the accompanying Statements of Operations as follows:

		Year ended December 31,
		2007		2006
Research and development		$	1,870,767	$	660,274
Clinical manufacturing			180,592		113,066
Marketing, general and administrative			4,599,266		2,813,661
	Total stock-based compensation expense	$	6,650,625	$	3,587,001

        We did not recognize a related tax benefit during the years ended December 31, 2007 and 2006, as we maintain net operating loss carryforwards and we have established a valuation allowance against the entire tax benefit as of December 31, 2007. No stock-based compensation expense was capitalized on our Balance Sheets as of December 31, 2007 and 2006.

        During the year ended December 31, 2006, we entered into a Separation Agreement with our former President and Chief Executive Officer, Michael E. Hart, and we entered into a consulting agreement with a former member of our Board of Directors, Dr. Marvin E. Jaffe (these arrangements are described in more detail in Note 9 below). Pursuant to these arrangements, the exercise periods of certain stock options held by Mr. Hart and Dr. Jaffe were extended as a result of their consulting relationships and were deemed modified for accounting purposes. We have accounted for the modifications to these options in accordance with SFAS 123R and FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, and recorded a one-time stock-based compensation charge of $441,129 during the year ended December 31, 2006.

Stock Options

        During 1995, our Board of Directors terminated the 1992 Stock Plan (the "1992 Plan") and adopted the 1995 Stock Option Plan (the "1995 Plan"). The 1995 Plan was amended and restated in 1997. Termination of the 1992 Plan had no effect on the options outstanding under that plan, as they were assumed under the 1995 Plan. Under the 1995 Plan, we could grant fixed and performance-based stock options and stock appreciation rights to officers, employees, consultants and directors. The stock options were intended to qualify as "incentive stock options" under Section 422 of the Internal Revenue Code, unless specifically designated as non-qualifying stock options or unless exceeding the applicable statutory limit.

F-23

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

        During 2000, concurrent with our IPO, the Board of Directors suspended the 1995 Plan and adopted the Allos Therapeutics, Inc. 2000 Stock Incentive Compensation Plan (the "2000 Plan"). The 2000 Plan provides for the granting of stock options similar to the terms of the 1995 Plan as described above. Any shares remaining for future option grants and any future cancellations of options from our 1995 Plan will be available for future grant under the 2000 Plan. Suspension of the 1995 Plan had no effect on the options outstanding under the 1995 Plan. Under the 2000 Plan, we are authorized to increase the number of shares of common stock that shall be available annually on the first day of each fiscal year beginning in 2001 in an amount equal to the lesser of 440,000 shares or 2% of the adjusted average common shares outstanding used to calculate fully diluted earnings per share as reported in our Annual Report to Stockholders for the preceding year, or alternatively, by any lesser amount determined by our Board of Directors. On December 21, 2005, our stockholders approved an amendment and restatement of the 2000 Plan to: (i) increase the aggregate number of shares of common stock authorized for issuance under the 2000 Plan by 3,500,000 shares and (ii) provide that the number of shares of common stock that may be granted under the 2000 Plan to any one employee during any calendar year cannot exceed 2,000,000 shares.

        In January 2002, our Board of Directors approved the Allos Therapeutics, Inc. 2002 Broad Based Equity Incentive Plan (the "2002 Plan"). Under the 2002 Plan, we are authorized to issue up to 1,000,000 shares of common stock to employees, consultants and members of the Board of Directors. Under the terms of the 2002 Plan, the aggregate number of shares underlying stock awards to officers and directors once employed by us cannot exceed 49% of the number of shares underlying all stock awards granted, as determined on certain specific dates. The 2002 Plan will terminate on January 7, 2012.

        In June 2006, our Board of Directors approved the Allos Therapeutics, Inc. 2006 Inducement Award Plan (the "2006 Plan"). Under the 2006 Plan, we are authorized to issue up to 1,500,000 shares of common stock pursuant to equity awards, including nonstatutory stock options, stock grant awards, stock purchase awards, stock unit awards and other forms of equity compensation. We may grant awards under the 2006 Plan only to persons not previously an employee or director of ours, or following a bona fide period of non-employment, as an inducement material to such individual's entering into employment with us and to provide incentives for such persons to exert maximum efforts for our success.

        The 1995, 2000, 2002 and 2006 Plans (the "Plans") provide for appropriate adjustments in the number of shares reserved and outstanding options in the event of certain changes to our outstanding common stock by reason of merger, recapitalization, stock split or other similar events. Options granted under the Plans may be exercised for a period of not more than 10 years from the date of grant or any shorter period as determined by our Board of Directors. Options vest as determined by the Board of Directors, generally over a period of two to four years, subject to acceleration under certain events. The exercise price of any incentive stock option granted under the Plans must equal or exceed the fair market value of our common stock on the date of grant, or 110% of the fair market value per share in the case of a 10% or greater stockholder.

F-24

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

        The following table summarizes our stock option activity and related information for the 1995, 2000, 2002 and 2006 Plans:

		Options Outstanding				Options Exercisable
		Number of Shares		Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
Outstanding at December 31, 2004		3,873,448		$	3.84	2,537,256	$	3.76
	Granted	602,764			2.37
	Exercised	(352,081	)		0.56
	Canceled	(179,756	)		4.69
Outstanding at December 31, 2005		3,944,375		$	3.87	2,809,991	$	4.20
	Granted	2,660,343			2.93
	Exercised	(413,680	)		1.36
	Canceled	(412,467	)		4.15
Outstanding at December 31, 2006		5,778,571		$	3.60	2,900,556	$	4.27
	Granted	2,731,574			6.53
	Exercised	(1,156,471	)		3.20
	Canceled	(948,244	)		5.31
Outstanding at December 31, 2007		6,405,430		$	4.68	2,754,274	$	3.80

        The following table summarizes information about options outstanding and exercisable as of December 31, 2007:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Exercisable	Weighted Average Exercise Price
$1.90—$2.55	914,848	5.1	$	2.31	789,153	$	2.31
$2.56—$2.95	805,435	8.2		2.75	430,559		2.78
$2.96—$3.13	402,250	8.1		3.12	183,499		3.10
$3.14—$3.24	794,800	7.9		3.15	394,702		3.15
$3.25—$5.62	724,307	5.6		4.92	456,988		4.82
$5.63—$5.84	414,000	7.2		5.72	100,000		5.74
$5.84—$6.16	618,201	7.8		5.90	115,701		6.07
$6.17—$7.46	726,667	7.3		6.35	186,667		6.65
$7.47—$8.04	907,917	9.1		7.47	—		—
$8.05—$13.75	97,005	3.9		9.50	97,005		9.50
	6,405,430	7.3	$	4.68	2,754,274	$	3.80

F-25

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

        The following table summarizes information about outstanding stock options that are fully vested and currently exercisable, and outstanding stock options that are expected to vest in the future:

		Number Outstanding	Weighted Average Remaining Contractual Term	Weighted Average Exercise Price		Aggregate Intrinsic Value
As of December 31, 2007:
	Options fully vested and exercisable	2,754,274	5.1	$	3.80	$	7,230,827
	Options expected to vest, including effects of expected forfeitures	3,169,916	8.9	$	5.33		4,015,633
	Options fully vested and expected to vest	5,924,190	7.2	$	4.62	$	11,246,460

        During the years ended December 31, 2007 and 2006, we granted stock options with a weighted-average grant-date fair value of $4.12 and $1.79 per share. Compensation expense related to our stock option plans was $5,899,387 and $3,048,523 for the years ended December 31, 2007 and 2006, respectively. As of December 31, 2007, the unrecorded stock-based compensation balance related to stock option awards was $5,991,942 and will be recognized over an estimated weighted-average amortization period of 1.4 years.

        The aggregate intrinsic value in the tables above represents the total pretax intrinsic value, based on our closing stock price of $6.29 as of December 31, 2007, which would have been received by the option holders had all option holders with in-the-money options exercised their options as of that date. The total number of in-the-money options exercisable as of December 31, 2007 was 2,470,602. The total intrinsic value of outstanding stock options as of December 31, 2007 was $11,784,334.

        The total intrinsic value of options exercised during the years ended December 31, 2007, 2006 and 2005 was $2,634,426, $1,104,117 and $553,447, respectively. The total cash received from employees as a result of employee stock option exercises during the years ended December 31, 2007, 2006 and 2005 was $3,696,811, $561,097 and $197,513, respectively. We settle employee stock option exercises with newly issued common shares. No tax benefits were realized by us in connection with these exercises during the year ended December 31, 2007 as we maintain net operating loss carryforwards and we have established a valuation allowance against the entire tax benefit as of December 31, 2007.

Valuation assumptions for stock options granted during the years ended December 31, 2007 and 2006

        For stock options granted during the years ended December 31, 2007 and 2006, the majority vest according to the following schedule: 25% of the shares subject to the award vest one year after the date of grant, and the remaining 75% of the shares subject to the award vest in equal monthly installments thereafter over the next three years, until all such shares are vested and exercisable. Stock-based compensation calculated according to SFAS 123R is expensed over the vesting period of the individual options in accordance with FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option and Award Plans ("FIN 28"). The fair value of stock options granted to our employees during the years ended December 31, 2007 and 2006 was estimated on the

F-26

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

date of each grant using the Black-Scholes option pricing model using the following weighted-average assumptions:

		2007		2006
Stock option plans:
	Expected dividend yield	0	%	0	%
	Expected stock price volatility	80	%	81	%
	Risk free interest rate	4.7	%	4.7	%
	Expected life (years)	4.3		3.9

        We used an expected dividend yield of 0%, as we do not expect to pay dividends during the expected life of these awards. The expected stock price volatility is determined using our historical stock volatility over the period equal to the expected life of each award. The risk-free interest rate is based on United States Treasury zero-coupon issues with a remaining term equal to the expected life of each award. During 2006 through the first quarter of 2007, the expected life was determined by factoring the different vesting periods of each award in combination with our employees' expected exercise behavior. In June 2007, we concluded that our historical share option exercise experience would not provide a reasonable basis upon which to estimate expected term going forward, given our relative stage of development and changes in our business given the termination of the EFAPROXYN development program. Beginning in the second quarter of 2007, the expected life of the stock options was estimated using peer data of companies in the life science industry with similar equity plans. As required by SFAS 123R, stock-based compensation expense is recognized net of estimated pre-vesting forfeitures, which results in recognition of expense on options that are ultimately expected to vest over the expected option term. Forfeitures were estimated using actual historical forfeiture experience.

Restricted Stock

        The following table summarizes activity and related information for our restricted stock awards:

		Number of Shares		Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2006		410,000		$	3.14
	Granted	105,000			6.08
	Vested	(102,500	)		3.14
Nonvested as of December 31, 2007		412,500		$	3.89

        During the years ended December 31, 2007 and 2006, we granted 105,000 and 410,000 shares of restricted stock, respectively. We did not grant restricted stock during the year ended December 31, 2005. The shares of restricted stock vest in four equal annual installments from the date of grant. The grant-date fair value of shares granted during the years ended December 31, 2007 and 2006 was $638,400 and $1,286,300, respectively. The weighted-average grant-date fair value per share for restricted stock awards granted was based on the closing market price of the Company's common stock on the grant dates of the awards and was $6.08 and $3.14 for the years ended December 31, 2007 and 2006, respectively. The total fair value of shares vested during the year ended December 31, 2007 was

F-27

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

approximately $643,025. During the years ended December 31, 2007 and 2006, we recorded stock-based compensation related to restricted stock awards of $689,754 and $502,514, respectively. As of December 31, 2007, the unrecorded stock-based compensation balance related to restricted stock awards was $695,779 and will be recognized over an estimated weighted-average amortization period of 1.5 years.

Employee Stock Purchase Plan

        On February 28, 2001, our Board of Directors approved the Allos Therapeutics, Inc. 2001 Employee Stock Purchase Plan ("Purchase Plan"), which was also approved by our stockholders on April 17, 2001. Under the Purchase Plan, we are authorized to issue up to 2,500,000 shares of common stock to qualified employees. Qualified employees can choose to have up to 10% of their annual base earnings withheld to purchase shares of our common stock during each offering period. The purchase price of the common stock is 85% percent of the lower of the fair market value of a share of common stock on the first day of the offering or the fair market value of a share of common stock on the last day of the purchase period. We sold 41,148, 44,319 and 26,675 shares to employees in 2007, 2006 and 2005, respectively. There were 2,282,605 shares available for sale under the Purchase Plan as of December 31, 2007. The Purchase Plan will terminate on February 27, 2011. Compensation expense related to our Purchase Plan was $61,484 and $35,964 for the years ended December 31, 2007 and 2006, respectively. As of December 31, 2007, there was no unrecorded deferred stock-based compensation balance related to the Purchase Plan. The weighted-average estimated grant date fair value of purchase awards under the Purchase Plan during the years ended December 31, 2007 and 2006 was $1.42 and $0.96 per share.

        The fair value of purchase awards granted to our employees during the years ended December 31, 2007 and 2006 was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:

		2007		2006
Stock purchase plan:
	Expected dividend yield	0	%	0	%
	Expected stock price volatility	55	%	46	%
	Risk free interest rate	4.9	%	4.7	%
	Expected life (years)	0.9		1.0

Expense Information for 2005

        During the year ended December 31, 2005, we recorded stock-based compensation expense of approximately $476,000 and $2,000 in marketing, general and administrative expenses and research and development expenses, respectively. The $476,000 of stock-based compensation expense recorded in marketing, general and administrative expenses is primarily due to an amendment in May 2005 of the terms surrounding the exercise period for certain options that were granted to our Chairman of the Board of Directors during 2000 (see Note 9).

F-28

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Stock-Based Compensation Plans (Continued)

Pro forma SFAS 123 Information

        Prior to the adoption of SFAS 123R, we provided the disclosures required under SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), as amended by SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosures. The following table illustrates the pro forma effect on net loss attributable to common stockholders and net loss per share if we had applied the fair value recognition provisions of SFAS 123 to stock-based compensation for the year ended December 31, 2005:

		2005
Net loss attributable to common stockholders—as reported		$	(20,760,077	)
	Add: Stock-based employee compensation expense included in reported net loss		477,860
	Deduct: Stock-based employee compensation expense determined under the fair value based method for all awards		(1,737,894	)
	Pro forma net loss attributable to common stockholders	$	(22,020,111	)
	Net loss per share: basic and diluted—as reported	$	(0.45	)
	Net loss per share: basic and diluted—pro forma	$	(0.48	)

        The weighted average estimated grant date fair value, as defined by SFAS 123, for options granted under our stock option plans during the year ended December 31, 2005 was $1.42 per share. The weighted average estimated grant date fair value of purchase awards under the Purchase Plan during the year ended December 31, 2005 was $0.84. The estimated grant date fair values were calculated using the Black-Scholes option-pricing model.

        The following assumptions are included in the estimated grant date fair value calculations for our stock option and employee stock purchase awards for the year ended December 31, 2005:

		2005
Stock option plans:
	Expected dividend yield	0%
	Expected stock price volatility	78%-85%
	Risk free interest rate	2.3%-4.5%
	Expected life (years)	4.0-5.0
Stock purchase plan:
	Expected dividend yield	0%
	Expected stock price volatility	35%-69%
	Risk free interest rate	1.6%-3.8%
	Expected life (years)	2.0

F-29

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

5. Restructuring and Separation Costs

        In January 2005, we executed agreements to sublease approximately three-quarters of the 12,708 square feet of excess space in our corporate offices located in Westminster, Colorado. The term of each sublease agreement is through the term of our office lease, or October 31, 2008. The total rental payments to us under the terms of the sublease agreements approximate $230,000. In the year ended December 31, 2005, we recorded a lease abandonment charge of $380,085 as our obligations under our primary lease were in excess of the sum of the actual and expected sublease rental payments for this excess space. As of December 31, 2007, the amount remaining in accrued restructuring and separation costs relating to this lease abandonment charge was $38,732.

        In January 2006, Michael E. Hart notified our Board of Directors of his intent to resign from his positions as President, Chief Executive Officer and Chief Financial Officer of the Company once a successor Chief Executive Officer was appointed. On March 3, 2006, we entered into a separation agreement with Mr. Hart to provide certain incentives for his continued employment with the Company while we conducted our search for his successor. On March 9, 2006, we appointed Paul L. Berns as our President, Chief Executive Officer and a member of the Board of Directors and Mr. Hart resigned from his positions in accordance with the terms of the separation agreement. The separation agreement with Mr. Hart was amended on March 9, 2006 and on May 10, 2006 (as so amended, the "Separation Agreement").

        We recorded separation costs of $645,666 during the year ended December 31, 2006 relating to our estimate of our total obligations under the Separation Agreement with Mr. Hart. During the years ended December 31, 2007 and 2006, we made payments to Mr. Hart under the Separation Agreement of $320,458 and $325,208, respectively. As of December 31, 2007, there was no remaining liability relating to the Separation Agreement with Mr. Hart.

6. Income Taxes

        We adopted the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 ("FIN 48"), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109 and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Our evaluation was performed for the periods from December 31, 1993 through December 31, 2007, the tax periods which remain subject to examination by major tax jurisdictions as of December 31, 2007.

        We may from time to time be assessed interest or penalties by major tax jurisdictions, although there have been no such assessments historically with no material impact to our financial results. In the event we receive an assessment for interest and/or penalties, it would be classified in the financial statements as income tax expense.

F-30

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

6. Income Taxes (Continued)

        The income tax benefit computed using our net loss and the federal statutory income tax rate differs from our actual income tax benefit of $0, primarily due to the following for the years ended December 31, 2007, 2006 and 2005:

		2007			2006			2005
Federal income tax benefit at 35%		$	(13,779,360	)	$	(10,574,400	)	$	(7,047,800	)
State income tax, net of federal benefit			974,838			(813,900	)		(577,100	)
Stock-based compensation			1,160,681			275,600			6,600
Research and development and orphan drug credits			(3,311,029	)		(1,355,693	)		(756,264	)
Research and development and orphan drug credits to expire related to Section 382 limitation			5,880,410			—			—
Net operating losses to expire related to Section 382 limitation			23,086,377			—			—
Change in valuation allowance			(14,161,720	)		12,496,693			8,369,764
Other			149,803			(28,300	)		4,800
	Benefit for income taxes	$	—		$	—		$	—

        The components of our deferred tax assets as of December 31, 2007 and 2006 are as follows:

			2007			2006
Deferred tax assets:
	Net operating loss carryforwards		$	48,354,464		$	63,856,500
	Amortization of intangibles			943,154			16,505
	Research and development and orphan drug credit carryforwards			7,195,874			9,047,583
	Stock-based compensation			2,989,285			764,027
	Other			320,786			280,668
		Total deferred tax assets		59,803,563			73,965,283
	Valuation allowance			(59,803,563	)		(73,965,283	)
		Net deferred tax assets	$	—		$	—

        Our deferred tax assets represent an unrecognized future tax benefit. A valuation allowance has been established for the entire tax benefit as we believe that it is more likely than not that such assets will not be realized.

        As of December 31, 2007, we had available approximately $130.6 million of net operating loss ("NOL") carryforwards, after taking into consideration NOLs expected to expire unused due to the limitations under Section 382 of the Internal Revenue Code, and which includes approximately $3.4 million of deductions related to stock-based compensation that are not realized as deferred tax assets until current taxes payable can be reduced. These NOL carryforwards will expire beginning in 2009. In addition, we had research and development credit and orphan drug credit carryforwards, after taking into consideration the Section 382 limitation, of $2.3 million and $4.9 million, respectively, as of December 31, 2007, to offset future regular and alternative tax expense. Since the Company's formation, it has raised capital through the issuance of capital stock on several occasions which, combined with shareholders' subsequent disposition of those shares, has resulted in four changes of

F-31

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

6. Income Taxes (Continued)

control in 1994, 1998, 2001 and 2005, as defined by Section 382. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% within a three-year period. As a result of the most recent ownership change in 2005, utilization of our NOLs generated prior to the latest change are subject to an annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change in control by the applicable long-term tax-exempt rate resulting in an annual limitation amount of approximately $2.2 million. Additionally, we have a recognized built-in gain that will increase the annual limitation by $3.3 million for each of the five years after the 2005 ownership change. Any unused annual limitation may be carried over to later years, and the amount of the limitation may, under certain circumstances, be subject to adjustment if the fair value of the Company's net assets are determined to be below or in excess of the tax basis of such assets at the time of the ownership change, and such unrealized loss or gain is recognized during the five-year period after the ownership change.

        Subsequent ownership changes, as defined in Section 382, could further limit the amount of our NOL carryforwards and research and development credits that can be utilized annually to offset future taxable income.

7. Employee Benefit Plan

        We maintain a defined contribution plan covering substantially all employees under Section 401(k) of the Internal Revenue Code. From January 1, 1999 through December 31, 2006, we provided a 50% match of employees' contributions up to $2,000 per employee per year. Effective January 1, 2007, we provided a 50% match of employees' contributions up to $5,000 per employee per year. We made total contributions of $241,227, $105,675 and $98,276 during the years ended December 31, 2007, 2006 and 2005, respectively. Company contributions are fully vested after four years of employment.

8. Commitments and Contingencies

Lease Commitments

        We lease offices and research and development facilities, as well as certain office and lab equipment under agreements that expire at various dates through 2010. Total rent expense for the years ended December 31, 2007, 2006 and 2005 and the cumulative period from inception through December 31, 2007 was $686,606, $586,010, $619,581 and $5,063,783, respectively. See Note 5 for a discussion of our subleases which terminate October 31, 2008. As of December 31, 2007, remaining payments under these subleases approximate $60,630.

F-32

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

8. Commitments and Contingencies (Continued)

        The aggregate future minimum rental commitments as of December 31, 2007, net of sublease payments, for non-cancelable operating leases with initial or remaining terms in excess of one year are as follows:

Year Ending December 31:
2008	$	657,014
2009		67,642
2010		5,651
2011 and thereafter		—
Total	$	730,307

Royalty and License Fee Commitments

        On January 14, 1994, we entered into a license agreement with the Center for Innovative Technology, or CIT, under which we obtained exclusive worldwide rights to a portfolio of patents related to allosteric hemoglobin modifier compounds, including EFAPROXYN, and their uses. In exchange for the license agreement, we paid CIT $50,000 in cash and issued 248,000 shares of our common stock valued at $0.16 per share. This license agreement was assigned by CIT to the Virginia Commonwealth University Intellectual Property Foundation, or VCUIPF, on July 28, 1997. Under the terms of the license agreement, we have the right to grant sublicenses, for which we must also pay royalties to VCUIPF for products produced by the sublicensees. Also, pursuant to the license agreement, we will pay VCUIPF a running royalty of 1% to 1.25% of our worldwide net revenue arising from the sale, lease or other commercialization of the allosteric hemoglobin modifier compounds. This license agreement terminates on the date the last United States patent licensed to us under the agreement expires, which is currently October 2016, but could be later depending on possible patent term extensions. Quarterly royalty payments are due within 60 days from the end of each calendar quarter. As of December 31, 2007, no royalty payments have been incurred.

        In December 2002, we entered into a license agreement with Memorial Sloan-Kettering Cancer Center, SRI International and Southern Research Institute, as amended, under which we obtained exclusive worldwide rights to a portfolio of patents and patent applications related to PDX (pralatrexate) and its uses. Under the terms of the agreement, we paid an up-front license fee of $2.0 million upon execution of the agreement and are also required to make certain additional cash payments based upon the achievement of certain clinical development or regulatory milestones or the passage of certain time periods. To date, we have made aggregate milestone payments of $2.0 million based on the passage of time. In the future, we could make aggregate milestone payments of $1.0 million upon the earlier of achievement of a clinical development milestone or the passage of certain time periods (the "Clinical Milestone"), and up to $10.3 million upon achievement of certain regulatory milestones, including regulatory approval to market PDX in the United States or Europe. The next scheduled payments toward the Clinical Milestone of $500,000 each are currently due on December 23, 2008 and 2009. The up-front license fee and all milestone payments under the agreement have been or will be recorded to research and development expense when incurred. Under the terms of the agreement, we are required to fund all development programs and will have sole responsibility for all commercialization activities. In addition, we will pay the licensors a royalty based on a percentage of

F-33

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

8. Commitments and Contingencies (Continued)

net revenues arising from sales of the product or sublicense revenues arising from sublicensing the product, if and when such sales or sublicenses occur.

        In December 2004, we entered into an agreement with the University of Colorado Health Sciences Center, the University of Salford and Cancer Research Technology ("CRT"), under which we obtained exclusive worldwide rights to certain intellectual property surrounding a proprietary molecule known as RH1. Under the terms of the agreement, we paid an up-front license fee of $190,500 upon execution of the agreement and are also required to make certain additional cash payments based upon the achievement of certain clinical development, regulatory and commercialization milestones. We could make aggregate milestone payments of up to $9.2 million upon the achievement of the clinical development, regulatory and commercialization milestones set forth in the agreement. The up-front license fee and all milestone payments under the agreement, as well as the one-time data option fee discussed below, have been or will be recorded to research and development expense when incurred. Under the terms of the agreement and related data option agreement, we paid the licensors a one-time data option fee of $360,000 in 2007, for an exclusive license to the results of a Phase 1 study sponsored by Cancer Research UK, CRT's parent institution. This Phase 1 study was completed in 2007 and, under the terms of the agreement, we have since assumed responsibility for all future development costs and activities and have sole responsibility for all commercialization activities. In addition, we will pay the licensors a royalty based on a percentage of net revenues arising from sales of the product or sublicense revenues arising from sublicensing the product, if and when such sales or sublicenses occur.

Contingencies

        The Company and one of its former officers were named as defendants in a purported securities class action lawsuit filed in May 2004 in the United States District Court for the District of Colorado (the "District Court"). An amended complaint was filed in August 2004. The lawsuit was brought on behalf of a purported class of purchasers of our securities during the period from May 29, 2003 to April 29, 2004, and sought unspecified damages relating to the issuance of allegedly false and misleading statements regarding EFAPROXYN during this period and subsequent declines in our stock price. On October 20, 2005, the District Court granted the defendants' motion to dismiss the lawsuit with prejudice. In an opinion dated October 20, 2005, the District Court concluded that the plaintiff's complaint failed to meet the legal requirements applicable to its alleged claims.

        On November 20, 2005, the plaintiff appealed the District Court's decision to the U.S. Court of Appeals for the Tenth Circuit (the "Court of Appeals"). On February 6, 2008, the parties signed a stipulation of settlement, settling the case for $2,000,000. Neither we nor our former officer admits any liability in connection with the settlement. The Court of Appeals accordingly has remanded the case to the District Court for consideration of the settlement. The settlement is subject to various conditions, including without limitation approval of the District Court. We expect that the amount of the settlement in excess of our deductible will be covered by our insurance carrier. In the event the settlement does not become final, we intend to vigorously defend against the plaintiff's appeal. If the Court of Appeals then were to reverse the District Court's decision and we were not successful in our defense of such claims, we could be forced to make significant payments to the plaintiffs, and such payments could have a material adverse effect on our business, financial condition, results of operations and cash flows to the extent such payments are not covered by our insurance carriers. Even if our defense against such claims were successful, the litigation could result in substantial costs and divert management's attention and resources, which could adversely affect our business. As of December 31,

F-34

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

8. Commitments and Contingencies (Continued)

2007, we have recorded $2,000,000 in accrued litigation settlement costs, which represents our best estimate of the potential gross amount of the settlement costs to be paid to the plaintiffs, and $1,759,000 in prepaid expenses and other assets, which represents the amount we expect to be reimbursed from our insurance carrier. The net difference of $241,000 between these amounts represents the remaining unpaid deductible under our insurance policy, and this amount was recorded to marketing, general and administrative expenses during the year ended December 31, 2006.

        We enter into indemnification provisions under our agreements with other companies in our ordinary course of business, typically with business partners, contractors, clinical sites and suppliers. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities or the use of our product candidates. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The estimated fair value of the indemnification provisions of these agreements is minimal as of December 31, 2007, and accordingly, we have no corresponding liabilities recorded as of December 31, 2007.

9. Related Party Transactions

Dr. Donald Abraham

        In January 2001, we entered into a consulting agreement for scientific advisory services with Dr. Donald Abraham, a director of the Company from 1994 through May 10, 2004. Under the one-year agreement, which was renewable upon mutual consent, we paid Dr. Abraham consulting fees of $2,000 per month. In March 2002, this contract was terminated. Effective July 1, 2003, we entered into another one-year consulting agreement, under which we paid Dr. Abraham consulting fees of $5,000 per month. Starting in June 2004, this agreement was renewed each year for successive one-year terms through June 30, 2007. The agreement was not renewed after June 30, 2007. For the years ended December 31, 2007, 2006, 2005 and the cumulative period from inception through December 31, 2007, we paid Dr. Abraham consulting fees of $30,000, $60,000, $60,000 and $288,000, respectively.

Dr. Stephen Hoffman

        Dr. Stephen J. Hoffman has served as a member of our Board of Directors since 1994 and as our Chairman of the Board since December 2001. He also served as our President and Chief Executive Officer from July 1994 to December 2001. On January 12, 2000, we granted Dr. Hoffman a stock option to purchase 328,971 shares of common stock at $2.42 per share (the "1995 Plan Option") under the terms of our 1995 Stock Option Plan. Effective February 28, 2003, we entered into a two-year consulting agreement (the "Consulting Agreement") with Dr. Hoffman and terminated the employment agreement previously entered into with him in January 2001.

        Pursuant to the Consulting Agreement, Dr. Hoffman served us as non-executive Chairman of the Board and was required to provide consulting services as requested by us from time to time. The Consulting Agreement provided for an annual consulting fee of $150,000, paid monthly, so long as Dr. Hoffman provided consulting services in accordance with the agreement. For the years ended December 31, 2007, 2006, and 2005, we paid Dr. Hoffman consulting fees of $0, $0 and $20,800, respectively. The Consulting Agreement also provided for a minimum guaranteed incentive payment of

F-35

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

9. Related Party Transactions (Continued)

$45,000 per year payable to Dr. Hoffman for each full year of consulting services provided under the agreement. We paid Dr. Hoffman incentive compensation payments in 2007, 2006 and 2005 of $0, $0 and $45,000, respectively.

        According to the Consulting Agreement, Dr. Hoffman's then-outstanding options continued to vest through the end of the term of the agreement, or February 28, 2005. We have accounted for these stock options using variable accounting as prescribed by FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, and we recorded a recovery of non-cash stock-based compensation of $2,488 and $170,118 during 2004 and 2005 and stock-based compensation of $173,963 during 2003, respectively. Stock options granted to Dr. Hoffman in 2007, 2006 and 2005 related to Board of Director services.

        The Consulting Agreement expired in accordance with its terms on February 28, 2005. On May 18, 2005, in recognition of Dr. Hoffman's efforts and services on behalf of the Company and as an incentive for Dr. Hoffman's continued service as our Chairman of the Board, our Board of Directors approved an amendment to the 1995 Plan Option to extend the exercise period for such option until the earlier of: (i) January 12, 2010 (the expiration date of such option), or (ii) three months after the date that Dr. Hoffman ceases to serve as a director of the Company. Prior to such amendment, the 1995 Plan Option would have expired on May 28, 2005, or three months after the expiration of Dr. Hoffman's Consulting Agreement with the Company. Except as set forth above, the 1995 Plan Option remains in full force and effect in accordance with its original terms. In conjunction with this amendment to the 1995 Plan Option, we recorded non-cash stock-based compensation expense of $462,000 during the year ended December 31, 2005. This expense is reflected in marketing, general and administrative expenses in our Statement of Operations for the year ended December 31, 2005.

Dr. Marvin Jaffe, M.D.

        Dr. Marvin E. Jaffe served as a member of our Board of Directors from 1994 to May 10, 2006. On March 11, 2006, Dr. Jaffe tendered his resignation as a director of the Company effective immediately prior to our 2006 annual meeting of stockholders and notified the Board that he did not intend to stand for reelection. As a result of Dr. Jaffe's resignation as a director, on May 10, 2006, we entered into a consulting agreement with Dr. Jaffe in order to allow us to retain the benefit of Dr. Jaffe's knowledge and expertise regarding the Company's business and the potential clinical development and commercialization strategies for our products (the "Jaffe Consulting Agreement"). Pursuant to the Jaffe Consulting Agreement, Dr. Jaffe has agreed to provide up to 10 hours of consulting service per month as and when requested from time to time by the Company. In connection with the performance of his consulting services, we granted Dr. Jaffe a nonqualified stock option under the Company's 2000 Stock Incentive Compensation Plan to purchase 20,000 shares of common stock at an exercise price equal to $2.94 per share, which equals the closing sale price of a share of our common stock on the effective date of the Jaffe Consulting Agreement (as reported by the Nasdaq National Market). This option is subject to the terms and conditions of the 2000 Stock Incentive Compensation Plan and vests in eighteen equal monthly installments commencing July 1, 2006. Dr. Jaffe is not entitled to any additional compensation or benefits in connection with the performance of his consulting services. The Jaffe Consulting Agreement terminated on December 31, 2007.

F-36

ALLOS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

9. Related Party Transactions (Continued)

Michael E. Hart

        Pursuant to the Separation Agreement with Mr. Hart (as discussed in Note 5) and as a result of Mr. Hart's resignation as a director, on May 10, 2006, we entered into a consulting agreement with Mr. Hart in order to allow us to retain the benefit of Mr. Hart's historical knowledge regarding the Company's operations and corporate development strategies (the "Hart Consulting Agreement"). Pursuant to the Hart Consulting Agreement, Mr. Hart has agreed to provide an average of at least 10 hours of consulting services per month as and when requested from time to time by the Company. Mr. Hart is not entitled to any compensation or benefits in connection with the performance of his consulting services, except for those payments and benefits being provided to him under the Separation Agreement. The Hart Consulting Agreement terminated on December 31, 2007.

10. Quarterly Information (Unaudited)

        The results of operations on a quarterly basis for the years ended December 31, 2007 and 2006 were as follows:

			March 31, 2007			June 30, 2007			Sept. 30, 2007			Dec. 31, 2007			March 31, 2006			June 30, 2006			Sept. 30, 2006			Dec. 31, 2006
Operating expenses:
	Research and development		$	3,289,428		$	4,360,787		$	4,394,726		$	5,399,379		$	3,439,830		$	3,320,667		$	4,210,051		$	3,352,053
	Clinical manufacturing			1,147,304			1,384,804			1,506,255			1,509,048			561,573			390,866			485,855			845,613
	Marketing, general and administrative			4,747,596			5,514,923			4,240,704			5,168,791			2,925,798			3,738,720			3,895,094			4,316,661
	Restructuring and separation costs			—			—			—			—			645,666			—			—			—
		Total operating expenses		9,184,328			11,260,514			10,141,685			12,077,218			7,572,867			7,450,253			8,591,000			8,514,327
Loss from operations				(9,184,328	)		(11,260,514	)		(10,141,685	)		(12,077,218	)		(7,572,867	)		(7,450,253	)		(8,591,000	)		(8,514,327	)
Interest and other income, net				773,464			909,140			843,542			768,000			503,952			487,900			479,685			444,440
Net loss			$	(8,410,864	)	$	(10,351,374	)	$	(9,298,143	)	$	(11,309,218	)	$	(7,068,915	)	$	(6,962,353	)	$	(8,111,315	)	$	(8,069,887	)
Net loss per share: basic and diluted			$	(0.14	)	$	(0.16	)	$	(0.14	)	$	(0.17	)	$	(0.13	)	$	(0.13	)	$	(0.15	)	$	(0.14	)
Weighted average shares: basic and diluted				62,151,400			65,645,678			66,042,023			66,855,484			55,079,180			55,102,627			55,196,369			55,813,346

F-37

EXHIBIT INDEX

		Incorporated by Reference
					Filed Herewith
Exhibit No.	Description	Form	Filing Date	Number
3.01	Amended and Restated Certificate of Incorporation.	10-Q	8/7/2006	3.01
3.02	Certificate of Designation of Series A Junior Participating Preferred Stock.	10-Q	8/7/2006	3.02
3.03	Certificate of Amendment to Restated Certificate of Incorporation.	10-Q	8/7/2006	3.03
3.04	Amended and Restated Bylaws of Allos Therapeutics, Inc.	8-K	6/25/2007	3.04
4.01	Form of Common Stock Certificate.	S-1/A	3/17/2000	4.01
4.02	Reference is made to Exhibits 3.01, 3.02, 3.03 and 3.04.
4.03	Rights Agreement dated May 6, 2003 between Allos and Mellon Investor Services LLC.	8-K	5/9/2003	99.2
4.04	Form of Rights Certificate.	8-K	5/9/2003	99.3
4.05	Amendment to Rights Agreement dated March 4, 2005 between Allos and Mellon Investor Services LLC.	8-K	3/4/2005	4.06
4.06	Amendment to Rights Agreement dated January 29, 2007 between Allos and Mellon Investor Services LLC.	8-K	1/30/2007	4.1
10.01†	Form of Amended and Restated Indemnity Agreement between Allos and each of its directors and officers.	8-K	6/25/2007	10.01
10.02†	1995 Stock Option Plan, as amended.	S-1	1/26/2000	10.11
10.3†	2000 Stock Incentive Compensation Plan, as amended.	8-K	12/22/2005	10.1
10.3.1†	Form of Incentive Stock Option Letter Agreement under 2000 Stock Incentive Compensation Plan.	8-K	2/11/2005	99.1
10.3.2†	Form of Nonqualified Stock Option Letter Agreement under 2000 Stock Incentive Compensation Plan.	8-K	2/11/2005	99.2
10.3.3†	Form of Nonqualified Stock Option Letter Agreement for Non-Employee Directors under 2000 Stock Incentive Compensation Plan.	8-K	2/24/2006	10.1
10.4†	2001 Employee Stock Purchase Plan and form of Offering.	10-K	3/7/2001	10.26
10.4.1†	2001 Employee Stock Purchase Plan Offering (Series Beginning July 1, 2007).	8-K	6/25/2007	10.12.1
10.5*	Office Lease dated April 4, 2001 between Allos and Catellus Development Corporation.	10-Q	8/14/2001	10.27
10.5.1*	Amended and Restated Second Amendment to Lease dated December 9, 2002 between Allos and Catellus Development Corporation.	10-K	3/28/2003	10.27.1
10.5.2*	Third Amendment to Lease dated November 28, 2003 between Allos and Catellus Development Corporation.	10-K	3/5/2004	10.27.2
10.6†	2002 Broad Based Equity Incentive Plan.	S-8	1/16/2002	99.1

10.6.1†	Form of Stock Option Grant Notice under 2002 Broad Based Equity Incentive Plan.	10-K	3/16/2005	10.14.1
10.6.2†	Form of Stock Option Agreement under 2002 Broad Based Equity Incentive Plan.	10-K	3/16/2005	10.14.2
10.7	Securities Purchase Agreement dated March 2, 2005 between Allos and the Investors listed on the signature pages thereto.	8-K/A	3/10/2005	10.41
10.8	Registration Rights Agreement dated March 4, 2005 between Allos and the Investors listed on Schedule I thereto.	8-K/A	3/10/2005	10.42
10.9	Letter Agreement dated March 4, 2005 among Allos, Warburg Pincus Private Equity VIII, L.P., Warburg Pincus & Co. and Warburg Pincus LLC.	8-K	3/4/2005	10.43
10.10†	Separation Agreement dated March 1, 2006 between Allos and Michael E. Hart.	8-K	3/6/2006	10.1
10.10.1†	First Amendment to Separation Agreement dated March 9, 2006 between Allos and Michael E. Hart.	8-K	3/14/2006	10.3
10.10.2†	Second Amendment to Separation Agreement dated May 10, 2006 between Allos and Michael E. Hart.	8-K	5/16/2006	10.1
10.11†	Nonqualified Stock Option Letter Agreement dated March 3, 2006 between Allos and Michael E. Hart.	8-K	3/6/2006	10.2
10.12†	Summary of Compensation Arrangements for Non-Employee Directors.	10-Q	8/7/2007	10.32
10.13†	Restricted Stock Award Agreement dated March 9, 2006 between Allos and Paul L. Berns.	8-K	3/14/2006	10.2
10.14†	Consultant Agreement effective May 10, 2006 between Allos and Michael E. Hart.	8-K	5/16/2006	10.2
10.15†	Consultant Agreement effective May 10, 2006 between Allos and Marvin E. Jaffe, M.D.	8-K	5/16/2006	10.3
10.16†	2006 Inducement Award Plan, including forms of Stock Option Grant Notice with Stock Option Agreement and Restricted Stock Grant Notice with Restricted Stock Grant Agreement.	8-K	6/6/2006	10.1
10.17	Letter agreement dated January 28, 2007 among Allos, Baker Bros. Investments, L.P., Baker Bros. Investments II, L.P., Baker/Tisch Investments, L.P., Baker Biotech Fund I, L.P., 14159, L.P. and Baker Brothers Life Sciences, L.P.	8-K	1/30/2007	10.1
10.18*	License Agreement for 10-Propargyl-10-Deazaaminopterin "PDX" dated December 23, 2002 and amended May 9, 2006 between Allos and SRI International, Sloan-Kettering Institute for Cancer Research and Southern Research Institute.	10-Q	8/7/2007	10.45

10.18.1+	Second Amendment to License Agreement for 10-Propargyl-10-Deazaaminopterin "PDX" dated November 6, 2007 between Allos and SRI International, Sloan-Kettering Institute for Cancer Research and Southern Research Institute.	X
10.19†	Corporate Bonus Plan, as amended and restated effective December 11, 2007.	X
10.20†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Paul L. Berns.	X
10.21†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Pablo J. Cagnoni, M.D.	X
10.22†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and James V. Caruso.	X
10.23†	Amended and Restated Employment Agreement, effective December 13, 2007, between Allos and Marc H. Graboyes.	X
10.24†	Letter agreement, effective January 22, 2008, between Allos and Bruce K. Bennett.	X
23.01	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.	X
24.01	Power of Attorney (included on signature page hereto).	X
31.01	Rule 13a-14(a)/15d-14(a) Certification.	X
31.02	Rule 13a-14(a)/15d-14(a) Certification.	X
32.01#	Section 1350 Certification.	X

†

Indicates management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.

*

Indicates confidential treatment has been granted with respect to specific portions of this exhibit. Omitted portions have been filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

+

Indicates confidential treatment has been requested with respect to portions of this exhibit. Omitted portions have been filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

#

The certifications attached as Exhibit 32.01 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Allos Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.

EX-10.18.1

Exhibit 10.18.1

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

SECOND AMENDMENT TO
LICENSE AGREEMENT

This SECOND AMENDMENT TO LICENSE AGREEMENT (this “Second Amendment”), dated as of November 6 2007, is entered into between SRI INTERNATIONAL, a California not-for-profit corporation (“SRI”), SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH, a New York not-for-profit corporation (“SKI”), SOUTHERN RESEARCH INSTITUTE, an Alabama not-for-profit corporation (“SoRI” and, together with SRI and SKI, the “Licensor”), and ALLOS THERAPEUTICS, INC., a Delaware corporation (“Allos”). Allos and Licensor are each sometimes individually referred to herein as a “Party” and collectively as the “Parties.”

WITNESSETH

WHEREAS, the Parties entered into that certain License Agreement dated as of December 23, 2002 (the “Original Agreement”), pursuant to which Allos obtained from Licensor an exclusive license to certain patent rights and know-how relating to a proprietary compound known as PDX in exchange for certain rights and consideration provided to Licensor;

WHEREAS, the Parties entered into a First Amendment to the Original Agreement dated as of May 9, 2006 (the “First Amendment”) (the Original Agreement and First Amendment are sometimes collectively referred to herein as the “License Agreement”);

WHEREAS, the Parties now desire to further amend the License Agreement to modify the terms and conditions relating to certain payments payable to Licensor thereunder;

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT

1.All capitalized terms used but not defined herein shall have the meanings assigned to them in the License Agreement.

2.Section 3.3 of the License Agreement is hereby deleted in its entirety and replaced with the following:

3.3Milestone Payments.  Allos shall pay Licensor the following one-time milestone payments within [ * ] of the date of achieving each milestone:

1

Milestone	Amount
[ * ]	[ * ]

Licensor acknowledges and agrees that, as of the date of this Second Amendment, Allos has fully paid [ * ].

For purposes of this Section 3.3, a [ * ] shall mean [ * ].

Each milestone payment set forth in this Section 3.3 shall be payable by Allos only once; provided, however, in the event that [ * ].

3.Licensor hereby represents and warrants to Allos that: (a) it has taken all necessary corporate action to authorize the execution and delivery of this Second Amendment; and (b) this Second Amendment has been duly executed and delivered on behalf of Licensor, and constitutes a legal, valid, binding obligation, enforceable against Licensor in accordance with its terms.

4.This Second Amendment shall be made part of the Agreement and be governed by all its terms.

5.This Second Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

6.This Second Amendment shall be effective upon its execution by each of SRI, SKI, SoRl and Allos.

2

IN WITNESS WHEREOF, the parties have caused this Second Amendment to be executed by their duly authorized representatives as of the date first set forth above.

SRI INTERNATIONAL				ALLOS THERAPEUTICS, INC.
By:	/s/ John McIntire			By:	/s/ Marc H. Graboyes
Name:			John McIntire	Name:			Marc H. Graboyes
Title:		Deputy General Counsel		Title:		Vice President, General Counsel
SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH				SOUTHERN RESEARCH INSTITUTE
By:	/s/ Gustave Bernhardt			By:	/s/ David W. Mason
Name:			Gustave J. Bernhardt	Name:			David W. Mason
Title:		Director, Research Resources Management		Title:		Director CIP

3

EX-10.19

EXHIBIT 10.19

ALLOS THERAPEUTICS, INC.

CORPORATE BONUS PLAN

Adopted: April 25, 2007

Amended and Restated: December 11, 2007

Effective: January 1, 2007

PLAN OBJECTIVES

The objectives of the Corporate Bonus Plan (the “Plan”) are to:

·provide certain employees of Allos Therapeutics, Inc. (the “Company”) with incentives to achieve the highest level of individual and team performance and to meet or exceed specified objectives, which contribute to the overall success of the Company;

·motivate participants to achieve both corporate and individual objectives; and

·enable the Company to attract and retain high-quality employees.

ADMINISTRATION

The Plan will be administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) and the Chief Executive Officer; provided that any action permitted to be taken by the Committee may be taken by the Board, in its discretion.  The Compensation Committee may correct any defect or omission or reconcile any inconsistency in the Plan in the manner and to the extent the Compensation Committee deems necessary or desirable.  Any decision of the Compensation Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.  The Compensation Committee generally sets a one-year performance period under the Plan to run from January 1 through December 31 (the “Performance Period”).  The Compensation Committee is responsible for approving any incentive compensation for executive officers, as that term is defined in Section 16 of the Securities Exchange Act of 1934, as amended (the “Executive Officers”), and for recommending to the Company’s Board of Directors (the “Board”) the incentive compensation for the Chief Executive Officer.  The Chief Executive Officer is responsible for any incentive compensation for employees who are not Executive Officers (the “Non-Executive Officer Employees”).

ELIGIBILITY

All Company employees holding a position with the Company that is covered by the Plan as determined by the Compensation Committee from time to time in its discretion are eligible to participate in the Plan for each Performance Period; provided, however, that in order to receive an award for a Performance Period, if awards are available, eligible employees (“Participants”) must: (i) be employed by the Company both on the last day of the applicable Performance Period (which will generally be December 31 of each year) and at the time awards are paid out under the Plan; (ii) have completed at least six months of full-time, active service with the Company during the applicable Performance Period (which shall include all family and medical leaves of absence) or have been deemed by the Compensation Committee to be eligible to participate fully

1

in the Plan; (iii) receive at least a “Meets Expectations” rating on the employee’s performance review for the applicable Performance Period; and (iv) not be subject to a written performance improvement plan at the time awards are paid out under the Plan.

Participants with at least six, but less than 12, months of active service during a Performance Period may be eligible for a prorated bonus for such Performance Period, depending on their length of service for that period.  A Participant who changes job grades during a Performance Period may be eligible for a bonus based on the length of time in each grade and the respective bonus targets that would apply for such grades during such Performance Period.

Unless the terms of an applicable severance plan or employment agreement provide otherwise, a Participant who terminates employment (or gives notice of his or her intent to terminate) for reasons other than death or disability prior to a payout date of an award under the Plan will not be eligible for a bonus award.  If an employee dies prior to a payout date of an award under this Plan, then the award that the employee otherwise would have been eligible to receive under the Plan, if any, may be paid to his/her estate at the discretion of the Company.

TARGET BONUS AWARDS

Target bonus awards will be determined and communicated to eligible employees annually.  For Non-Executive Officer Employees, the target bonus awards for such Participants will be determined by the Chief Executive Officer.  For Executive Officers (other than the Chief Executive Officer), the target bonus awards for such Participants will be determined by the Compensation Committee, in consultation with the Chief Executive Officer.  For the Chief Executive Officer, the target bonus award for such Participant will be determined by the Compensation Committee and the Board.  Target bonus awards may be modified from time to time.

AWARD DETERMINATION

Actual bonus payouts can range from 0 to 1.5 times the target bonus awards, based on corporate and individual performance.

Following are the weightings of the corporate and individual performance components used for Participants in determining the actual bonus award amounts:

Title	Weighting of Corporate Performance Against Corporate Objectives		Weighting of Individual Performance Against Individual Objectives
President and CEO	100	%	0	%
Executive or Senior Vice President	60	%	40	%
Vice President	60	%	40	%
Below Vice President	50	%	50	%

2

At the beginning of each Performance Period under the Plan, the criteria for assessing the Company’s corporate performance will be (i) developed by the Chief Executive Officer of the Company in consultation with management, (ii) reviewed and approved by the Compensation Committee, and (iii) approved by the Board.

At the beginning of each Performance Period under the Plan, the criteria for assessing an individual’s performance will be developed by the Company in consultation with the Participant (the “Individual Bonus Criteria”).  For Non-Executive Officer Employees, the Individual Bonus Criteria for such Participants must be approved by the Chief Executive Officer.  For Executive Officers with an individual performance component, the Individual Bonus Criteria for such Participants must be approved by the Compensation Committee, in consultation with the Chief Executive Officer.

After the end of each Performance Period, the Compensation Committee will assess the extent to which corporate goals and objectives have been met, identify any unplanned achievements or adverse events that have occurred and recommend to the Board for approval an overall percentage of weighted goals achieved with respect to the corporate component of the Plan.  This percentage of corporate goal achievement, together with the percentage of achievement for the individual component, will be used to calculate bonus payouts, if any, for each eligible Participant in the Plan.

After the end of each Performance Period, individual performance will be evaluated based on achievement of weighted goals and objectives as reflected in the employee’s written performance objectives for the Performance Period.  For Non-Executive Officer Employees, the Chief Executive Officer will assess the extent to which Individual Bonus Criteria have been met, identify any unplanned achievements or adverse events that have occurred and approve an overall percentage of weighted goals achieved with respect to the individual component of the Plan.  For Executive Officers with an individual performance component, the Compensation Committee will assess, in consultation with the Chief Executive Officer, the extent to which Individual Bonus Criteria have been met, identify any unplanned achievements or adverse events that have occurred and approve an overall percentage of weighted goals achieved with respect to the individual component of the Plan.

The Company generally must achieve at least 75% of the Company’s weighted corporate objectives (the “Bonus Trigger”) for the relevant Performance Period in order for any bonus award payouts to occur; provided, however, that the Compensation Committee, in its discretion, may determine to grant an award under the Plan even though certain corporate objectives or Individual Bonus Criteria are not met.  The Compensation Committee and the Board shall have the authority, in their discretion, to determine whether the Bonus Trigger has been achieved for a particular Performance Period.

Awards under the Plan are subject to applicable withholdings.  Participants who have elected to participate in the Company’s 401(k) Plan will have the applicable funds withheld from their bonus payment.

3

PAYMENT OF AWARDS

Payment of an award under the Plan to a Participant shall be made as soon as practicable after determination of the amount of the award, and will generally occur within 75 days after the end of the calendar year during which the applicable Performance Period ends and, except as otherwise required by law or this Plan, will be paid during the calendar year immediately following the end of the Performance Period.

OTHER PROVISIONS

The Company reserves the right to interpret, modify, suspend or terminate this Plan at any time.

No Participant will have the right to alienate, assign, encumber, hypothecate or pledge his or her interest in any award under the Plan, voluntarily or involuntarily, and any attempt to so dispose of any such interest will be void.

Participants who engage in an activity that violates applicable local, state or federal laws, or who violate Company policies, may be subject to having their awards reduced or eliminated in the sole discretion of the Compensation Committee, except in the case of the Chief Executive Officer where the Board shall make the final determination after considering the Compensation Committee’s recommendation.

Neither this Plan nor any action taken hereunder shall be construed as giving any employee or Participant the right to be retained in the employ of the Company.  Employees of the Company are employed “at will” unless they have an agreement signed by the Chief Executive Officer or a member of the Board providing for other than at-will employment.

The Company shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to Participants under the Plan.  The Plan shall constitute an “unfunded” plan of the Company.

In the event of any conflict between a Participant’s employment agreement with the Company and this Plan, the terms of the Participant’s employment agreement will control.

The provisions contained in this Plan set forth the entire understanding of the Company with respect to the Plan and supercede any and all prior communications between the Company and any employee with respect to the Plan.  This Plan supersedes and replaces the Company’s previous Annual Incentive Plan.

CODE SECTION 409A COMPLIANCE

Payments to Participants pursuant to this Plan are not intended to constitute deferrals of compensation within the meaning of Section 409A of the Code.  Further, although payments hereunder are not intended to constitute “separation pay” within the meaning of the Treasury Regulations under Section 409A of the Code, in the event that the Company determines that a payment to a Participant hereunder (or a payment based upon the provisions of this Plan) does constitute “separation pay” within the meaning of such Treasury Regulations, (i) such payment shall be subject to the applicable provisions of any employment or separation agreement (if any)

4

between such Participant and the Company dealing with the timing and characterization of such Participant’s separation pay for purposes of Section 409A of the Code; and (ii) if such Participant is not subject to an employment or separation agreement containing provisions dealing with the timing and characterization of such Participant’s separation pay for purposes of Section 409A of the Code, then to the extent any such payment (A) is required to be paid during the period from the date of termination of Participant’s employment through March 15 of the calendar year following such termination, such payment is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (B) is payable following said March 15, such payment is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, and (C) is in excess of the amounts specified in clauses (A) and (B) of this paragraph, such payment shall (unless otherwise exempt under Treasury Regulations) be considered a separate payment subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments be delayed until 6 months after such Participant’s separation from service if such Participant is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service.  In the event that a 6-month delay of such payment is required pursuant to the preceding sentence (as determined by the Company), on the first regularly scheduled pay date following the conclusion of the delay period the Participant shall receive such payment (subject to applicable tax withholdings and deductions).

5

ATTACHMENT I

CALCULATION WORKSHEET

EXAMPLE 1:

A Senior Director, assuming: (i) 50% Corporate + 50% Individual weighting; (ii) $160,000 base salary; (iii) a target bonus award set at 25% of base salary ($40,000) at the beginning of the Performance Period; (iv) a 75% corporate threshold for any bonus payout; and (v) an individual achievement score of 110% (exceeded goals).

A bonus award under the Plan will be based partially on corporate performance against goals and a Participant’s individual performance against goals.  Each of these measures will account for 50% of the total bonus goal, and will be measured over the same period.  The achievement of corporate goals also determines the payout for individual goals, and thus, the corporate weighted score must be at least 75% for any bonuses to be paid.

Example of Corporate Goals, Weighting and Calculation of Corporate Score (as % achievement):

Goal	Corporate Bonus Criteria	Weighting		Score	Total
1	Goal 1	30	%	100	30	%
2	Goal 2	25	%	80	20	%
3	Goal 3	20	%	95	19	%
4	Goal 4	10	%	120	12	%
5	Goal 5	5	%	75	3.75	%
6	Goal 6	5	%	100	5	%
7	Goal 7	5	%	115	5.75	%
Total		100	%		95.5	%

Corporate Total = 95.5% (so it clears the 75% threshold to trigger bonus payouts)

Example of Calculation of Bonus Payouts:

	Base Salary		Target %		Weighting		Score		Bonus Amount
Corporate	$	160,000	25	%	50	%	95.5	%	$	19,100
Individual	$	160,000	25	%	50	%	110	%	$	22,000
Total					100	%			$	41,100

160,000 x .25 x .5 x .955 = $19,100.00

160,000 x .25 x .5 x 1.10 = $22,000.00

6

EXAMPLE 2:

Vice President, assuming: (i) 60% Corporate + 40% Individual weighting; (ii) $260,000 base salary; (iii) a target bonus award set at 25% of base salary ($65,000) at the beginning of the Performance Period; (iv) a 75% corporate threshold for any bonus payout; and (v) multiple corporate and individual achievement scenarios.

A.            If Corporate Perf = 100% and Individual Perf = 100%:

Annual Target Incentive Opportunity:	$260,000 x 25% = $65,000
Corporate Weighting	60%
Annual Tgt Based on 100% Corp Perf	$65,000 x 60% x 100% = $39,000
Individual Weighting	40%
Annual Tgt Based on 100% Ind Perf	$65,000 x 40% x 100% = $26,000
Total Bonus Award = $39,000 + $26,000 = $65,000

B.            If Corporate Perf = 95% and Individual Perf = 110% (exceeds):

Annual Target Incentive:	$260,000 x 25% = $65,000
Corporate Weighting	60%
Annual Tgt Based on 95% Corp Perf	$65,000 x 60% x 95% = $37,500
Individual Weighting	40%
Annual Tgt Based on 110% Ind Perf	$65,000 x 40% x 110% = $28,600
Total Bonus Award = $37,500 + $28,600 = $66,100

C.            If Corporate Perf =110% (exceeds) and Individual Perf = 90%:

Annual Target Incentive:	$260,000 x 25% = $65,000
Corporate Weighting	60%
Annual Tgt Based on 110% Corp Perf	$65,000 x 60% x 110% = $42,900
Individual Weighting	40%
Annual Tgt Based on 90% Ind Perf	$65,000 x 40% x 90% = $23,400
Total Bonus Award = $42,900 + $23,400 = $66,300

7

D.If Corporate Perf = 60% and Individual Perf = 110% (exceeds): Corporate threshold cancels out all payouts

Annual Target Incentive:	$260,000 x 25% = $65,000
Corporate Weighted Score 60% is < 75% threshold
Total Bonus Award = $0

8

EX-10.20

EXHIBIT 10.20

ALLOS THERAPEUTICS, INC.

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of December 13, 2007, by and among Allos Therapeutics, Inc., a Delaware corporation (the “Company”), and Paul L. Berns (“Employee”).

W I T N E S S E T H:

WHEREAS, the Company wishes to continue to employ Employee and to assure itself of the continued services of Employee on the terms set forth herein;

WHEREAS, Employee wishes to be so employed under the terms set forth herein;

WHEREAS, Employee and the Company entered into the original Employment Agreement dated March 9, 2006 (the “Original Agreement”);

WHEREAS, Employee and the Company are parties to the Amended and Restated Employment Agreement dated December 12, 2006 (the “First Amended Agreement”), pursuant to which the Company and Employee amended and restated the Original Agreement to reflect their final agreement with respect to reimbursement of commuting and temporary living expenses;

WHEREAS, the Company and Employee now desire to amend and restate the First Amended Agreement to, among other things, reflect certain changes such that the Employee will not be subject to adverse tax consequences under Section 409A of the Code (as defined below); and

WHEREAS, the Company and Employee intend that this Agreement shall supersede and replace the First Amended Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company and Employee hereby agree as follows:

Section 1.               Definitions.

(a)           “Accrued Obligations” shall mean (i) any Base Salary and Annual Bonus earned but unpaid prior to the date of a termination of Employee’s employment with the Company pursuant to Section 8 below, (ii) all accrued but unused personal time, (iii) any unreimbursed business expenses pursuant to Section 7 below and (iv) other employee benefits to which Employee is entitled upon termination of employment in accordance with the terms of the plans and programs of the Company.

(b)           “Affiliate” shall mean, as to any Person, any other Person that controls, is controlled by, or is under common control with, such Person.

(c)           “Annual Bonus” shall have the meaning set forth in Section 4(b) below.

(d)           “Base Salary” shall mean the salary, and any increase thereof, provided for in Section 4(a) below.

(e)           “Board” shall mean the Board of Directors of the Company.

(f)            “Cause” shall mean the occurrence of one or more of the following: (i) Employee’s conviction of a felony involving moral turpitude or dishonesty; (ii) Employee’s knowing and active participation in a fraud or significant act of dishonesty against the Company; (iii) Employee’s intentional and material damage to the Company’s property or (iv) Employee’s material breach of this Agreement, the Company’s written policies, or the Proprietary Information Agreement that is demonstrably willful and deliberate on Employee’s part is committed in bad faith or without reasonable belief that such breach is in the best interest of the Company, and is not remedied by Employee within thirty (30) days of written notice of such breach from the Board, which written notice, to be effective, must be provided to Employee within sixty (60) days after the date on which the Company first becomes aware of the occurrence of such event.  Notwithstanding anything herein to the contrary, Employee’s physical or mental Disability or death shall not constitute Cause.

(g)           “Change in Control” means

(i)              a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the assets of the Company (other than the transfer of the Company’s assets to a majority-owned subsidiary corporation);

(ii)             a merger or consolidation in which the Company is not the surviving corporation (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction);

(iii)            a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the Company);

(iv)            the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 50% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Common Stock”) or (2) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the

2

exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company), (B) any acquisition by the Company, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation if the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction; provided further that, for purposes of clause (B), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 50% or more of the Outstanding Common Stock or 50% or more of the Outstanding Voting Securities by reason of an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Common Stock or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control; or

(v)             individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided, that any individual who becomes a director of the Company subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed to have been a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened solicitation by a Person other than the Company for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board.

(h)           “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(i)            “Commencement Date” shall mean 5:00 p.m. Mountain Standard Time on  March 9, 2006.

(j)            “Company” except as otherwise expressly set forth herein, shall have the meaning set forth in the preamble hereto.

(k)           “Competitive Activities” shall mean the research, development, marketing or sale of drug and nondrug products which are competitive with (i) those products being marketed by the Company at the time of Employee’s termination of employment with the Company or (ii) those products that Employee was aware were under development by the Company and consuming material resources of the Company.

3

(l)            “Confidential Information” shall mean confidential or proprietary trade secrets, client lists, client identities and information, information regarding service providers, investment methodologies, marketing data or plans, sales plans, management organization information, operating policies or manuals, business plans or operations or techniques, financial records or data, or other financial, commercial, business or technical information (i) relating to the Company or any of its subsidiaries, or (ii) that the Company or any of its subsidiaries may receive belonging to suppliers, customers or others who do business with the Company, but shall exclude any information that is in the public domain or hereafter enters the public domain, in each case without the breach by Employee of Section 10(a) below.

(m)          “Disability” shall mean any physical or mental disability or infirmity that prevents the performance of Employee’s duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period and which entitles Employee to benefits under the long-term disability plan maintained by the Company for its senior executives.  Any question as to the existence, extent or potentiality of Employee’s Disability upon which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and approved by Employee (which approval shall not be unreasonably withheld).  The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

(n)           “Employee” shall have the meaning set forth in the preamble hereto.

(o)           “Good Reason” shall mean any one of the following events which occurs without Employee’s written consent on or after the commencement of Employee’s employment:  (i) a reduction of Employee’s then existing Base Salary or Target Bonus by more than ten percent (10%), unless the Employee accepts such reduction or such reduction is done in conjunction with similar reductions for similarly situated employees of the Company (it being understood that, solely for purposes of this paragraph 1(o), such a reduction in the Target Bonus not accepted by Employee is considered a material breach of this Agreement); (ii) any request by the Company (or any surviving or acquiring corporation) that the Employee relocate to a new principal base of operations that would increase Employee’s one-way commute distance by more than thirty-five (35) miles from his then-principal residence, unless Employee accepts such relocation opportunity; (iii) a material diminution in Employee’s authority, duties or responsibilities with the Company, or any removal or involuntary termination of Employee from the Company otherwise than as expressly permitted by this Agreement; (iv) the failure of the Company to obtain the assumption agreement from any successor as contemplated in Section 17(a) (it being understood that, solely for purposes of this paragraph 1(o), the Company’s failure to obtain such assumption agreement shall be considered a material breach of this Agreement); (v) for purposes of Section 8(g) only, if, following a Change in Control, Employee’s benefits and responsibilities are materially reduced, or Employee’s Base Salary or Target Bonus are reduced by more than 10%, in each case, by comparison to the benefits, responsibilities, Base Salary or Target Bonus in effect immediately prior to such reduction (it being understood that, solely for purposes of this paragraph 1(o), the aforementioned reductions in the Target Bonus or benefits are considered a material breach of this Agreement); or (vi) a material breach of this Agreement by the Company.

4

(p)           “Interfering Activities” shall mean (i) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Person employed by the Company or any subsidiary thereof to terminate such Person’s employment with the Company or such subsidiary; (ii) hiring any Person who was employed by the Company or any subsidiary thereof within the six (6) month period prior to the date of such hiring; or (iii) encouraging, soliciting or inducing, or in any manner attempting to encourage, solicit or induce any client, account, customer, licensee or other business relation of the Company or any subsidiary thereof to cease doing business with or reduce the amount of business conducted with (including by providing similar services or products to any such Person) the Company or such subsidiary, or in any way interfere with the relationship between any such client, account, customer, licensee or business relation and the Company or such subsidiary.

(q)           “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust (charitable or non-charitable), unincorporated organization or other form of business entity.

(r)            “Plan” shall mean the Company’s 2000 Stock Incentive Compensation Plan.

(s)           “Proprietary Information Agreement” shall mean the Company’s standard form of Employee Confidentiality and Inventions Assignment Agreement.

(t)            “Restricted Area” means, during Employee’s employment hereunder, any State of the United States of America or any other jurisdiction in which the Company or its subsidiaries engage (or have committed plans to engage) in business or, following termination of Employee’s employment, any jurisdiction in which the Company or its subsidiaries were engaged in business at the time of such termination or in which they have committed at the time of such termination to be actively engaged within four years of such termination.

(u)           “Restricted Period” shall mean the period commencing on the Commencement Date and ending on the twelve (12) month anniversary of Employee’s termination of employment hereunder for any reason.

(v)           “Target Bonus” shall have the meaning set forth in Section 4(b) below.

Section 2.               Acceptance and Term of Employment.

The Company agrees to employ Employee and Employee agrees to serve the Company on the terms and conditions set forth herein.  It is understood and agreed by the Company and Employee that this Agreement does not contain any promise or representation concerning the duration of Employee’s employment with the Company.  Employee specifically acknowledges that his employment with the Company is “at-will” and may be terminated by Employee or the Company at any time pursuant to Section 8 below.

Section 3.               Position, Duties and Responsibilities; Place of Performance.

(a)           Employee shall be employed and serve as the President and Chief Executive Officer of the Company (together with such other position or positions consistent with

5

Employee’s title as the Board shall specify from time to time) and shall have such duties typically associated with such title.  Subject to the foregoing, Employee also agrees to serve as an officer and/or director of the Company or any parent or subsidiary of the Company, as specified by the Board, in each case without additional compensation.  Employee shall report directly and exclusively to the Board.  In addition, the Company shall promptly appoint Employee to the Board and thereafter nominate Employee as a nominee for election to the Board and solicit proxies for his election for so long as he continues to serve as President and Chief Executive Officer.

(b)           Subject to the terms and conditions set forth in this Agreement, Employee shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during his employment with the Company pursuant to this Agreement, including, without limitation, any activity that (x) conflicts with the interests of the Company or its subsidiaries, (y) interferes with the proper and efficient performance of his duties for the Company, or (z) interferes with the exercise of his judgment in the Company’s best interests.  Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) serving, with the prior written consent of the Board, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) subject to the terms and conditions set forth in Section 10 hereof, managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by Employee so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

Section 4.               Compensation.  Employee shall be entitled to the following compensation:

(a)           Base Salary.  Employee shall be paid an annualized Base Salary, payable in accordance with the regular payroll practices of the Company, of not less than $477,000.  Such Base Salary shall be reviewed annually, and shall be subject to such annual increases, if any, as shall be determined by the Board.

(b)           Annual Bonus.  Employee will be eligible to participate in the Company’s Corporate Bonus Plan, pursuant to which Employee will be eligible for an annual bonus award to be determined in accordance with the terms of the plan (the “Annual Bonus”).  The target Annual Bonus for each fiscal year shall be not less than 50% of Base Salary (the “Target Bonus”).  For 2007, Employee’s Target Bonus shall equal 50% of Employee’s actual base salary earned in 2007, weighted 100% to the achievement of the Company’s corporate objectives.  A copy of the Corporate Bonus Plan has been provided to Employee.

(c)           Relocation.  Subject to the submission of properly documented receipts and the terms of Company’s relocation program, to the extent not previously reimbursed prior to the date hereof, the Company shall reimburse Employee for:  (i) customary closing costs incurred by Employee in connection with the sale of his residence in Wisconsin (including brokerage commissions) and his purchase of a new residence in Colorado, in each case including reasonable attorneys’ fees, (ii) customary and reasonable costs of moving Employee and his

6

family, including their personal effects, to their new residence in Colorado, and (iii) customary and reasonable commuting and temporary living expenses for Employee and his family during the period beginning on the Commencement Date and ending on June 30, 2007.  Also, to the extent that any payments or reimbursements described in clauses (i), (ii) or (iii) of this Section 4(c) cause Employee to incur additional taxes (“Additional Taxes”), upon substantiation of the amount of such Additional Taxes, the Company shall pay Employee an additional “gross-up” payment in an amount such that, after reduction by all taxes imposed on such gross-up payment, Employee retains an amount equal to the Additional Taxes.

Section 5.               Employee Benefits.

During Employee’s employment with the Company, Employee shall be entitled to participate in health, insurance, retirement and other perquisites and benefits generally provided to other senior executives of the Company that are made available from time to time.  Employee shall also be entitled to the same number of holidays and sick days as are generally allowed to senior executives of the Company and to the maximum amount of vacation allowed to executive officers of the Company, in accordance with Company policies in effect from time to time.  Employee shall also be eligible to receive disability insurance at the expense of the Company.

Section 6.               “Key-Man” Insurance.

At any time during Employee’s employment with the Company, the Company shall have the right to insure the life of Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may determine.  All premiums payable thereon shall be the obligation of the Company.  Employee shall have no interest in any such policy, but agrees to reasonably cooperate with the Company in taking out such insurance by submitting to reasonable physical examinations, supplying all information reasonably required by the insurance company, and executing all necessary documents, provided that no financial obligation or liability is imposed on Employee by any such documents.

Section 7.               Reimbursement of Business Expenses.

Employee is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under this Agreement and the Company shall promptly reimburse him for all such reasonable business expenses incurred in connection with carrying out the business of the Company, subject to documentation in accordance with the Company’s policy, as in effect from time to time.

Section 8.               Termination of Employment.

(a)           General.  Employee’s employment with the Company shall terminate upon the earliest to occur of (i) Employee’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, or (iv) a termination by Employee with or without Good Reason.  Upon any termination of Employee’s employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Employee, Employee shall resign from any and all directorships, committee memberships or any other positions Employee holds with the Company or any of its subsidiaries or Affiliates.

7

(b)           Termination due to Death or Disability.  Employee’s employment shall terminate automatically upon his death.  The Company may terminate Employee’s employment immediately upon the occurrence of a Disability, such termination to be effective upon Employee’s receipt of written notice of such termination.  In the event Employee’s employment is terminated due to his death or Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to the Accrued Obligations, which shall be paid within thirty (30) days after the date of such termination.  Except as set forth in this Section 8(b), following Employee’s termination by reason of his death or Disability, Employee shall have no further rights to any compensation or any other benefits under this Agreement; provided, that Employee’s then outstanding stock options and restricted stock shall remain subject to the terms and conditions of the Plan and the applicable stock option agreement or restricted stock agreement.

(c)           Termination by the Company for Cause.  In the event the Company terminates Employee’s employment for Cause, he shall be entitled only to the Accrued Obligations, which shall be paid within thirty (30) days after the date of such termination.  Following such termination of Employee’s employment for Cause, except as set forth in this Section 8(c), Employee shall have no further rights to any compensation or any other benefits under this Agreement; provided, that Employee’s then outstanding stock options and restricted stock shall remain subject to the terms and conditions of the Plan and the applicable stock option agreement or restricted stock agreement.

(d)           Termination by the Company without Cause.  The Company may terminate Employee’s employment at any time without Cause, effective upon Employee’s receipt of written notice of such termination.  In the event Employee’s employment is terminated by the Company without Cause (other than due to death or Disability), Employee shall be entitled to:

(i)              the Accrued Obligations, which shall be paid within thirty (30) days after the date of Employee’s termination of employment;

(ii)             Employee’s Target Bonus for the year in which Employee’s employment terminates, prorated through the date on which Employee’s employment terminates;

(iii)            an amount equal to 1.5 times Employee’s annual Base Salary then in effect, which, subject to Section 16, shall be payable in monthly installments over the 18-month period following the date of Employee’s termination of employment;

(iv)            an amount equal to 1.5 times Employee’s Annual Bonus, including any portion of such bonus deferred, for the year preceding the year in which the termination of Employee’s employment occurs, which shall be payable in a lump sum within thirty (30) days after the date of Employee’s termination of employment (or such later time as shall be required under Section 16);

(v)             all then outstanding stock options and restricted stock shall be treated in accordance with the terms of the Plan and the applicable stock option agreement or restricted stock agreement;

8

(vi)            the Company shall pay the premiums for Employee and his dependents of Employee’s group health insurance COBRA continuation coverage for twelve months following the date of Employee’s termination of employment, or, if earlier, until the date on which Employee becomes eligible to receive comparable benefits from another employer; and

(vii)           for a period of twelve months commencing on the date of termination of Employee’s employment, Employee shall receive outplacement assistance services from an outplacement agency selected by Employee and the Company shall pay all costs of such services; provided that such costs shall not exceed $15,000 in the aggregate.

Notwithstanding the foregoing, the payments and benefits described in subsections (ii) through (vii) above shall immediately cease, and the Company shall have no further obligations to Employee with respect thereto, in the event that Employee breaches any provision of Section 10 or the Proprietary Information Agreement.

Following such termination of Employee’s employment by the Company without Cause, except as set forth in this Section 8(d), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

(e)           Termination by Employee with Good Reason.  Employee may terminate his employment with Good Reason by providing the Company thirty (30) days’ written notice setting forth with reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to the Company within sixty (60) days after the date on which Employee first becomes aware of the occurrence of such event.  During such thirty (30) day notice period, the Company shall have a cure right (if curable), and if not cured within such period, Employee’s termination will be effective upon the date immediately following the expiration of the thirty (30) day notice period, and Employee shall be entitled to the same payments and benefits as provided in Section 8(d) above for a termination without Cause, it being agreed that Employee’s right to any such payments and benefits shall be subject to the same terms and conditions as described in Section 8(d) above.  Following such termination of Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

(f)            Termination by Employee without Good Reason.  Employee may terminate his employment without Good Reason by providing the Company thirty (30) days’ written notice of such termination.  In the event of a termination of employment by Employee under this Section 8(f), Employee shall be entitled only to the Accrued Obligations; provided, that Employee’s then outstanding stock options and restricted stock shall remain subject to the terms and conditions of the Plan and the applicable stock option agreement or restricted stock agreement.  In the event of termination of Employee’s employment under this Section 8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination and still have it treated as a termination without Good Reason.  Following such termination of Employee’s employment by Employee without Good Reason, except as set forth

9

in this Section 8(f), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

(g)           Change in Control.  Notwithstanding anything herein to the contrary, if the Company terminates Employee’s employment without Cause or Employee resigns for Good Reason within one (1) month prior to or two (2) years following a Change in Control, in lieu of any payments that Employee would have been entitled to receive pursuant to Section 8(d) or Section 8(e) herein, Employee shall be entitled to receive:

(i)            the Accrued Obligations, which shall be paid within thirty (30) days after the date of Employee’s termination of employment;

(ii)             Employee’s Target Bonus for the year in which Employee’s employment terminates, prorated through the date on which Employee’s employment terminates;

(iii)            a lump-sum cash payment in an amount equal to (A) two (2) times Employee’s highest annual Base Salary in effect during the 12-month period prior to the date of termination, plus (B) two (2) times Employee’s highest annualized (for any fiscal year consisting of less than 12 full months or with respect to which Employee has been employed by the Company for less than 12 full months) Annual Bonus, paid or payable, including by reason of any deferral, to Employee in respect of the five fiscal years of the Company (or such portion thereof during which Employee performed services for the Company if Employee shall have been employed by the Company for less than such five fiscal year period) immediately preceding the fiscal year in which the Change in Control occurs;

(iv)          immediate vesting of all outstanding stock options and restricted stock, and the extension of the option exercise period for twenty-four (24) months;

(v)           for a period of eighteen (18) months, commencing on the date of Employee’s termination of employment, the Company shall continue to keep in full force and effect all policies of medical, accident, disability and life insurance with respect to Employee and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the date of such termination and the Company shall pay all costs of the continuation of such insurance coverage; and

(vi)            for a period of twelve months commencing on the date of termination of Employee’s employment, Employee shall receive outplacement assistance services from an outplacement agency selected by Employee and the Company shall pay all costs of such services; provided that such costs shall not exceed $15,000 in the aggregate.

Following such termination of Employee’s employment by the Company without Cause or by Employee for Good Reason within one (1) month prior to or two years following a Change in Control, except as set forth in this Section 8(g), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

10

(h)           Release.  Notwithstanding any provision herein to the contrary, the Company may require that, prior to payment of any amount or provision of any benefit pursuant to subsections (d), (e) or (g) of this Section 8 (other than the Accrued Obligations), Employee shall have executed a general release in favor of the Company and its subsidiaries and related parties in the form attached hereto as Exhibit B, and any waiting periods contained in such release shall have expired.

Section 9.               Certain Additional Payments by the Company.

(a)           Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that Employee, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit (taking into account both income taxes and any Excise Tax) which is at least ten percent (10%) greater than the net after-tax proceeds to Employee resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) that is one dollar less than the smallest amount that would give rise to any Excise Tax, then no Gross-Up Payment shall be made to Employee and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b)           Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Employee within 15 business days of the receipt of notice from Employee that there has been a Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company and Employee shall jointly appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to Employee within five days of the receipt of the Accounting Firm’s determination, but in all events no later than the end of the calendar year after the year in which Employee incurs the related Excise Tax.  If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with a written opinion that

11

failure to report the Excise Tax on Employee’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm shall be binding upon the Company and Employee.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its remedies pursuant to Section 9(c) and Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Employee.

(c)           Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than 10 business days after Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which Employee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies Employee in writing prior to the expiration of such period that it desires to contest such claim, Employee shall:

(i)              give the Company any information reasonably requested by the Company relating to such claim,

(ii)             take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii)            cooperate with the Company in good faith in order effectively to contest such claim, and

(iv)            permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or

12

more appellate courts, as the Company shall determine; provided further, that if the Company directs Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Employee on an interest-free basis and shall indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d)           If, after the receipt by Employee of an amount advanced by the Company pursuant to Section 9(c), Employee becomes entitled to receive, and receives, any refund with respect to such claim, Employee shall (subject to the Company’s complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by Employee of an amount advanced by the Company pursuant to Section 9(c), a determination is made that Employee shall not be entitled to any refund with respect to such claim and the Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e)           If the Excise Tax is ultimately determined by the Internal Revenue Service or the Accounting Firm to be less than the amount taken into account in determining the Gross-Up Payment paid pursuant to Section 9(a), Employee shall repay to the Company, within thirty (30) days after the time that the amount of the reduction in Excise Tax is so determined, the portion of the Gross-Up Payment attributable to such reduction.

Section 10.             Restrictive Covenants.

Employee acknowledges and agrees that (A) the agreements and covenants contained in this Section 10 are (i) reasonable and valid in geographical and temporal scope and in all other respects, and (ii) essential to protect the value of the Company’s business and assets, and (B) by his employment with the Company, Employee will obtain knowledge, contacts, know-how, training and experience and there is a substantial probability that such knowledge, know-how, contacts, training and experience could be used to the substantial advantage of a competitor of the Company and to the Company’s substantial detriment.  For purposes of this Section 10, references to the Company shall be deemed to include its subsidiaries.

(a)           Confidential Information.  At any time during and after the end of Employee’s employment with the Company, without the prior written consent of the Board, except to the extent required by an order of a court having jurisdiction or under subpoena from an appropriate government agency, in which event, Employee shall, to the extent legally permitted, consult with the Board prior to responding to any such order or subpoena, and except

13

as he in good faith believes necessary or desirable in the performance of his duties hereunder, Employee shall not disclose to or use for the benefit of any third party any Confidential Information.

(b)           Non-Competition.  Employee covenants and agrees that during the Restricted Period, Employee shall not, directly or indirectly, individually or jointly, own any interest in, operate, join, control or participate as a partner, director, principal, officer, or agent of, enter into the employment of, act as a consultant to, or perform any services for any Person (other than the Company), that engages in any Competitive Activities within the Restricted Area.  Notwithstanding anything herein to the contrary, this Section 10(b) shall not prevent Employee from acquiring as an investment securities representing not more than three percent (3%) of the outstanding voting securities of any publicly-held corporation or from being a passive investor in any mutual fund, hedge fund, private equity fund or similar pooled account so long as Employee’s interest therein is less than three percent (3%) and he has no role in selecting or managing investments thereof.

(c)           Non-Interference.  During the Restricted Period, Employee shall not, directly or indirectly, for his own account or for the account of any other Person, engage in Interfering Activities.

(d)           Return of Documents.  In the event of the termination of Employee’s employment for any reason, Employee shall deliver to the Company all of (i) the property of the Company, and (ii) the documents and data of any nature and in whatever medium of the Company, and he shall not take with him any such property, documents or data or any reproduction thereof, or any documents containing or pertaining to any Confidential Information.

(e)           Proprietary Information Agreement.  Employee has signed and agrees to comply with the Proprietary Information Agreement.

(f)            Blue Pencil.  If any court of competent jurisdiction shall at any time deem the duration or the geographic scope of any of the provisions of this Section 10 unenforceable, the other provisions of this Section 10 shall nevertheless stand and the duration and/or geographic scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by law under the circumstances, and the parties hereto agree that such court shall reduce the time period and/or geographic scope to permissible duration or size.

(g)           Termination of Non-Competition Covenant.  Section 10(b) of this Agreement shall terminate upon a Change in Control.

Section 11.             Breach of Restrictive Covenants.

Without limiting the remedies available to the Company, Employee acknowledges that a breach of any of the covenants contained in Section 10 hereof may result in material irreparable injury to the Company or its subsidiaries for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company (or any subsidiary thereof, as applicable) shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction, without the necessity of proving irreparable harm or injury as a result of such breach

14

or threatened breach of Section 10 hereof, restraining Employee from engaging in activities prohibited by Section 10 hereof or such other relief as may be required specifically to enforce any of the covenants in Section 10 hereof.  Notwithstanding any other provision to the contrary, the Restricted Period shall be tolled during any period of violation of any of the covenants in Section 10(b) or 10(c) hereof and during any other period required for litigation during which the Company seeks to enforce such covenants against Employee or another Person with whom Employee is affiliated if it is ultimately determined that Employee was in breach of such covenants.

Section 12.             Representations and Warranties of Employee.

Employee represents and warrants to the Company that:

(a)           Employee’s employment will not conflict with or result in his breach of any agreement to which he is a party or otherwise may be bound;

(b)           Employee has not violated, and in connection with his employment with the Company will not violate, any non-solicitation, non-competition or other similar covenant or agreement of a prior employer by which he is or may be bound; and

(c)           In connection with Employee’s employment with the Company, he will not use any confidential or proprietary information that he may have obtained in connection with employment with any prior employer.

Section 13.             Taxes.

The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment and social insurance taxes, as shall be required by law.  Employee acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

Section 14.             Indemnification.

The Company covenants and agrees that, to the fullest extent permitted by Delaware law, or the Company’s Certificate of Incorporation or By-laws, it will indemnify and hold Employee harmless from any and all liability, loss, damage, cost and expense (including reasonable attorneys’ fees) which Employee may incur, suffer or be required to pay.

Section 15.             Mitigation; Set Off.

The Company’s obligation to pay Employee the amounts provided and to make the arrangements provided hereunder shall not be subject to set-off, counterclaim or recoupment of amounts owed by Employee to the Company or its Affiliates.  Employee shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment or otherwise and the amount of any payment provided for pursuant to this

15

Agreement shall not be reduced by any compensation earned as a result of Employee’s other employment or otherwise.

Section 16.             Code Section 409A Compliance.

To the extent any payments or benefits made as a result of the termination of Employee’s employment (a) are paid from the date of termination of Employee’s employment through March 15 of the calendar year following such termination, such severance benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (b) are paid following said March 15, such Severance Benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, (c) represent the reimbursement or payment of costs for outplacement services, such payments are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and to qualify for the exception from deferred compensation pursuant to Section 1.409A-1(b)(9)(v)(A); and (d) are in excess of the amounts specified in clauses (a), (b) and (c) of this paragraph, shall (unless otherwise exempt under Treasury Regulations) be considered separate payments subject to the distribution requirements of Section 409A(a)(2)(A) of the Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments or benefits be delayed until 6 months after Employee’s separation from service if Employee is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service. In the event that a six month delay of any such separation payments or benefits is required, on the first regularly scheduled pay date following the conclusion of the delay period Employee shall receive a lump sum payment or benefit in an amount equal to the separation payments and benefits that were so delayed, and any remaining separation payments or benefits shall be paid on the same basis and at the same time as otherwise specified pursuant to this Agreement (subject to applicable tax withholdings and deductions).

Section 17.             Successors and Assigns; No Third-Party Beneficiaries.

(a)           The Company. This Agreement shall inure to the benefit of and be enforceable by, and may be assigned by the Company to, any purchaser of all or substantially all of the Company’s business or assets or any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise).  The Company will require in a writing delivered to Employee any such purchaser, successor or assignee to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such purchase, succession or assignment had taken place.  The Company may make no other assignment of this Agreement or its obligations hereunder.

(b)           Employee.  Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise, without the prior written consent of the Company; provided, however, that if Employee shall die, all amounts then payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there be no such designee, to Employee’s estate.

16

(c)           No Third-Party Beneficiaries.  Except as otherwise set forth in Section 8(b) or Section 17(b) hereof, nothing expressed or referred to in this Agreement will be construed to give any Person other than the Company and Employee any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.

Section 18.             Waiver and Amendments.

Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Board.  No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

Section 19.             Severability.

If any covenants or other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction: (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

Section 20.             Governing Law, Personal Jurisdiction and Venue

THIS AGREEMENT AND ALL DISPUTES RELATING TO THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF COLORADO AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN COLORADO RESIDENTS ENTERED INTO AND PERFORMED ENTIRELY IN COLORADO.  THE COMPANY AND EMPLOYEE AGREE THAT THIS AGREEMENT CONSTITUTES THE MINIMUM CONTACTS TO ESTABLISH PERSONAL JURISDICTION IN COLORADO AND AGREE TO COLORADO COURT’S EXERCISE OF PERSONAL JURISDICTION.  THE COMPANY AND EMPLOYEE FURTHER AGREE THAT ANY DISPUTES RELATING TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS LOCATED IN THE STATE OF COLORADO.

Section 21.             Intentionally Omitted.

Section 22.             Costs of Enforcement.  If any contest or dispute shall arise under this Agreement, each party hereto shall bear its own legal fees and expenses, provided, however, that in the event the Employee prevails with respect to a substantial aspect  of such contest or dispute, the Company shall be required to reimburse the Employee for reasonable legal fees and expenses incurred by him in connection therewith.

Section 23.             Notices.

(a)           Every notice or other communication relating to this Agreement shall be

17

in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided, provided that, unless and until some other address be so designated, all notices or communications by Employee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to Employee may be given to Employee personally or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s records.

(b)           Any notice so addressed shall be deemed to be given:  (i) if delivered by hand, on the date of such delivery; (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing; and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.

Section 24.             Section Headings.

The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of this Agreement or of any term or provision hereof.

Section 25.             Entire Agreement.

This Agreement constitutes the entire understanding and agreement of the parties hereto regarding the employment of Employee.  This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement, including, without limitation, the First Amended Agreement.

Section 26.             Survival of Operative Sections.

Upon any termination of Employee’s employment, the provisions of Section 8 through Section 27 of this Agreement (together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to the provisions thereof.

Section 27.             Counterparts.

This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

*              *              *

[Signatures appear on the following page.]

18

IN WITNESS WHEREOF, the undersigned have executed this Second Amended and Restated Employment Agreement as of the date first above written.

ALLOS THERAPEUTICS, INC.
/s/ Marc H. Graboyes
By:	Marc H. Graboyes
Title:	Vice President, General Counsel
PAUL L. BERNS
/s/ Paul L. Berns

19

EX-10.21

EXHIBIT 10.21

ALLOS THERAPEUTICS, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

PABLO J. CAGNONI, MD

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective as of December 13, 2007, by and between ALLOS THERAPEUTICS, INC., (the “Company”), and PABLO J. CAGNONI, MD (“Executive”) (collectively, the “Parties”).

WHEREAS, the Company wishes to continue to employ Executive and to assure itself of the continued services of Executive on the terms set forth herein;

WHEREAS, Executive wishes to be so employed under the terms set forth herein;

WHEREAS, Executive and the Company are parties to the Employment Agreement (the “Original Agreement”) dated March 19, 2007;

WHEREAS, the Company and Executive desire to amend and restate the Original Agreement to, among other things, (i) reflect certain changes such that the Executive will not be subject to adverse tax consequences under Section 409A of the Code (as defined below) and (ii) implement certain changes recommended by the Company’s outside compensation consultant regarding Executive’s change in control severance benefits; and

WHEREAS, the Company and Executive intend that this Agreement shall supersede and replace the Original Agreement.

NOW, THEREFORE, in consideration of the promises, mutual covenants, the above recitals, and the agreements herein set forth, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree to the following terms and conditions of Executive’s employment:

1.             EMPLOYMENT.  The Company hereby agrees to employ Executive as Senior Vice President, Chief Medical Officer and Executive hereby accepts such employment upon the terms and conditions set forth herein as of the date first written above. Executive commenced employment with the Company on March 19, 2007 (“Start Date”).

2.             AT-WILL EMPLOYMENT.  It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive’s employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and/or with or without notice.  The nature, terms or conditions of Executive’s employment with the Company cannot be changed by any oral representation, custom, habit or practice, or any other writing.  In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future,

concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control.  This at-will status cannot be altered except in writing signed by Executive and the Chairman of the Board of Directors.

3.             DUTIES.  Executive shall render full-time services to the Company as the Senior Vice President, Chief Medical Officer of the Company (together with such other position or positions consistent with Executive’s title as the Board shall specify from time to time) and shall have such duties typically associated with such title.  Subject to the foregoing, Executive also agrees to serve as an officer and/or director of the Company or any parent or subsidiary of the Company, as specified by the Board, in each case without additional compensation.  Employee shall report directly and exclusively to the Chief Executive Officer of the Company.  Subject to the terms and conditions set forth in this Agreement, Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during his employment with the Company pursuant to this Agreement, including, without limitation, any activity that (a) conflicts with the interests of the Company or its subsidiaries, (b) interferes with the proper and efficient performance of his duties for the Company, or (c) interferes with the exercise of his judgment in the Company’s best interests.  Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) serving, with the prior written consent of the Board, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) subject to the terms and conditions set forth in the Confidentiality Agreement (as defined below), managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

4.             POLICIES AND PROCEDURES.  Executive agrees that he is subject to and will comply with the policies and procedures of the Company, as such policies and procedures may be modified, added to or eliminated from time to time at the sole discretion of the Company, except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement.  Executive further agrees and acknowledges that any written or oral policies and procedures of the Company do not constitute contracts between the Company and Executive.

5.             COMPENSATION.  For all services rendered and to be rendered hereunder, the Company agrees to pay to the Executive, and the Executive agrees to accept a base salary of $385,000 per annum (“Base Salary”). Any such salary shall be payable in equal biweekly installments and shall be subject to such deductions or withholdings as the Company is required to make pursuant to law, or by further agreement with the Executive.  Executive’s salary shall be subject to annual review and adjustment by the Compensation Committee of the Board of Directors.

6.             ANNUAL BONUS.  Executive will be eligible to participate in the Company’s Corporate Bonus Plan, pursuant to which Executive will be eligible for an annual bonus award to be determined in accordance with the terms of the plan (“Annual Bonus”).  For 2007, Executive’s target bonus award under the Corporate Bonus Plan shall equal 35% of Executive’s actual base salary earned in 2007, weighted 60% to the achievement of the Company’s corporate objectives and 40% to the achievement of individual objectives determined by the Compensation

2

Committee of the Company’s Board of Directors, in consultation with the Chief Executive Officer.  A copy of the Corporate Bonus Plan has been provided to Employee.

7.             SIGNING BONUS.  Within thirty (30) days following Executive’s Start Date, Executive was paid a bonus of $50,000 less applicable employment tax withholdings and deductions (“Signing Bonus”).  Provided that Executive remains employed by the Company and has satisfied certain milestones determined by the Compensation Committee of the Board of Directors within thirty (30) days of Executive’s Start Date, on January 11, 2008, Executive shall receive an additional Signing Bonus of $50,000 less applicable employment tax withholdings and deductions.

8.             Intentionally omitted.

9.             Intentionally omitted.

10.          OTHER BENEFITS.  While employed by the Company as provided herein:

(a)           Executive and Employee Benefits.  The Executive shall be entitled to all benefits to which other executive officers of the Company are entitled, on terms comparable thereto, including, without limitation, participation in the 401(k) plan, group insurance policies and plans, medical, health, vision, and disability insurance policies and plans, and the like, which may be maintained by the Company for the benefit of its executives. The Company reserves the right to alter and amend the benefits received by Executive from time to time at the Company’s discretion.

(b)           Out-of-Pocket Expense Reimbursement.  The Executive shall receive, against presentation of proper receipts and vouchers, reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company.

(c)           Personal Time Off.  The Executive shall be entitled to the same number of holidays and sick days as are generally allowed to executive officers of the Company and to the maximum amount of vacation allowed to executive officers of the Company, in accordance with Company policies in effect from time to time.

11.          PROPRIETARY AND OTHER OBLIGATIONS.  Executive has signed and agrees to comply with the Company’s standard form of Employee Confidentiality and Inventions Assignment Agreement (“Confidentiality Agreement”) as a condition of his continued employment by the Company.  Executive further agrees that all Company-related business procured by the Executive, and all Company-related business opportunities and plans made known to Executive while employed by the Company, are and shall remain the permanent and exclusive property of the Company.

12.          TERMINATION.  Executive and the Company each acknowledge that either party has the right to terminate Executive’s employment with the Company at any time for any reason whatsoever, with or without cause or advance notice pursuant to the following:

(a)           Termination by Death or Disability.  Subject to applicable state or federal law, in the event Executive shall die during the period of his employment hereunder or

3

become permanently disabled, as evidenced by notice to the Company and Executive’s inability to carry out his job responsibilities for a continuous period of more than three months, Executive’s employment and the Company’s obligation to make payments hereunder shall terminate on the date of his death, or the date upon which, in the sole determination of the Board of Directors, Executive has failed to carry out his job responsibilities for three months, except that the Company shall pay Executive’s estate any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(b)           Voluntary Resignation by Executive.  In the event Executive voluntarily terminates his employment with the Company (other than for Good Reason (as defined below)), the Company’s obligation to make payments hereunder shall cease upon such termination, except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(c)           Termination for Just Cause.  In the event the Executive is terminated by the Company for Just Cause (as defined below), the Company’s obligation to make payments hereunder shall cease upon the date of receipt by Executive of written notice of such termination (the “date of termination” for purposes of this Section 12(c)), except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(d)           Termination by the Company without Just Cause or Resignation for Good Reason (Other Than Change in Control).  The Company shall have the right to terminate Executive’s employment with the Company at any time without Just Cause.  In the event Executive is terminated by the Company without Just Cause or Executive resigns for Good Reason (other than in connection with a Change in Control (as defined below)), and upon the execution of a full general release by Executive (“Release”), in the form attached hereto as Exhibit A, releasing all claims known or unknown that Executive may have against the Company as of the date Executive signs such release, and upon the written acknowledgment of his continuing obligations under the Confidentiality Agreement, Executive shall be entitled to receive the following severance benefits: (i) continuation of Executive’s base salary, then in effect, for a period of twelve (12) months following the date of termination, paid on the same basis and at the same time as previously paid or as otherwise required under Section 15 of this Agreement; (ii) payment of any accrued but unused vacation and sick leave; and (iii) the Company shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of twelve (12) months following the date of termination; provided, however, that (a) the Company shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the termination without Just Cause or resignation for Good Reason and (b) the Company’s obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

4

(e)           Change in Control Severance Benefits.  In the event that the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control (a “Change in Control Termination”), and upon the execution of a Release, Executive shall be entitled to receive the following Change in Control severance benefits: (i) a lump-sum cash payment in an amount equal to (A) 1.5 times Executive’s annual base salary then in effect, plus (B) 1.5 times the greater of (1) Executive’s annualized target bonus award for the year in which Executive’s employment terminates or (2) the Annual Bonus amount paid to Executive in the immediately preceding year; (ii) payment of any accrued but unused vacation and sick leave; (iii) payment of Executive’s target bonus award for the year in which Executive’s employment terminates, prorated through the date of the Change in Control Termination; (iv) the Company (or any surviving or acquiring corporation) shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of eighteen (18) months following a Change in Control Termination; and (v) the Company (or any surviving or acquiring corporation) shall pay the costs of outplacement assistance services from an outplacement agency selected by Executive for a period of nine (9) months following a Change in Control Termination, up to maximum of $11,250 in aggregate; provided, however, that (a) the Company (or any surviving or acquiring corporation) shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the Change in Control Termination and (b) the Company’s (or any surviving or acquiring corporation’s) obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Executive agrees that the Company’s (or any surviving or acquiring corporation) payment of health insurance premiums will satisfy its obligations under COBRA for the period provided.

In addition, notwithstanding anything contained in Executive’s stock option or restricted stock grant agreements to the contrary, in the event the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control, and any surviving corporation or acquiring corporation assumes Executive’s stock options and/or restricted stock, as applicable, or substitutes similar stock options or stock awards for Executive’s stock options and/or restricted stock, as applicable, in accordance with the terms of the Company’s equity incentive plans, then (i) the vesting of all of Executive’s stock options and/or restricted stock (or substitute stock options or stock awards), as applicable, shall be accelerated in full and (ii) the term and the period during which Executive’s stock options may be exercised shall be extended to twelve (12) months after the date of Executive’s termination of employment; provided, that, in no event shall such options be exercisable after the expiration date of such options as set forth in the stock option grant notice and/or agreement evidencing such options.

(f)            Legal Costs.  Following a Change in Control, in the event Executive institutes and prevails in litigation regarding the validity or enforceability of, or liability under, any material provision of this Section 12 or any guarantee of performance thereof, the Executive shall be entitled to payment of his reasonable attorney’s fees and expenses by the Company.

5

13.          DEFINITIONS.

(a)           Just Cause.  As used in this Agreement, “Just Cause” shall mean the occurrence of one or more of the following: (i) Executive’s conviction of a felony or a crime involving moral turpitude or dishonesty; (ii) Executive’s participation in a fraud or act of dishonesty against the Company; (iii) Executive’s intentional and material damage to the Company’s property; (iv) material breach of Executive’s employment agreement, the Company’s written policies, or the Confidentiality Agreement that is not remedied by Executive within fourteen (14) days of written notice of such breach from the Board of Directors; or (v) conduct by Executive which demonstrates Executive’s gross unfitness to serve the Company as Senior Vice President, Chief Medical Officer, as determined in the sole discretion of the Board of Directors.  Executive’s physical or mental disability or death shall not constitute cause hereunder.

(b)           Good Reason.  As used in this Agreement, “Good Reason” shall mean any one of the following events which occurs without Executive’s consent on or after the commencement of Executive’s employment provided that Executive has first provided written notice to any member of the Board (or the surviving corporation, as applicable) of the occurrence of such event(s) within 90 days of the first such occurrence and the Company (or surviving corporation) has not cured such event(s) within 30 days after Executive’s written notice is received by such member of the Board (or by the surviving corporation):  (i) a reduction of Executive’s then existing annual salary base or annual bonus target by more than ten percent (10%), unless the Executive accepts such reduction or such reduction is done in conjunction with similar reductions for similarly situated employees of the Company (it being understood that, solely for purposes of this paragraph 13(b), such a reduction in the annual bonus target not accepted by Executive is considered a material breach of this Agreement); (ii) any request by the Company (or any surviving or acquiring corporation) that the Executive relocate to a new principal base of operations that would increase Executive’s one-way commute distance by more than thirty-five (35) miles from his then-principal base of operations, unless Executive accepts such relocation opportunity; or (iii) for purposes of Section 12(e) only, if, following a Change in Control, Executive’s benefits and responsibilities are materially reduced, or Executive’s base compensation or annual bonus target are reduced by more than 10%, in each case, by comparison to the benefits, responsibilities, base compensation or annual bonus target in effect immediately prior to such reduction (it being understood that, solely for purposes of this paragraph 13(b), the aforementioned reductions in the annual bonus target or benefits are considered a material breach of this Agreement).

(c)           Change in Control.  As used in this Agreement, a “Change in Control” is defined as: (a) a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the assets of the Company (other than the transfer of the Company’s assets to a majority-owned subsidiary corporation); (b) a merger or consolidation in which the Company is not the surviving corporation (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction); (c) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately

6

after such transaction, securities representing at least fifty percent (50%) of the voting power of the Company); or (d) any transaction or series of related transactions in which in excess of 50% of the Company’s voting power is transferred.

14.          TERMINATION OF COMPANY’S OBLIGATIONS.  Notwithstanding any provisions in this Agreement to the contrary, the Company’s obligations, and Executive’s rights pursuant to Sections 12(d) and 12(e) herein, regarding salary continuation and the payment of COBRA premiums, shall cease and be rendered a nullity immediately should Executive fail to comply with the provisions of the Confidentiality Agreement or if Executive directly or indirectly competes with the Company.

15.          CODE SECTION 409A COMPLIANCE.  To the extent any payments or benefits pursuant to Section 12 above (a) are paid from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, such severance benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (b) are paid following said March 15, such Severance Benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, (c) represent the reimbursement or payment of costs for outplacement services, such payments are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and to qualify for the exception from deferred compensation pursuant to Section 1.409A-1(b)(9)(v)(A); and (d) are in excess of the amounts specified in clauses (a), (b) and (c) of this paragraph, shall (unless otherwise exempt under Treasury Regulations) be considered separate payments subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments or benefits be delayed until 6 months after Executive’s separation from service if Executive is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service. In the event that a six month delay of any such separation payments or benefits is required, on the first regularly scheduled pay date following the conclusion of the delay period Executive shall receive a lump sum payment or benefit in an amount equal to the separation payments and benefits that were so delayed, and any remaining separation payments or benefits shall be paid on the same basis and at the same time as otherwise specified pursuant to this Agreement (subject to applicable tax withholdings and deductions).

16.          INDEMNIFICATION.  The Company and Executive have entered into and agree to comply with the Company’s standard form of indemnification agreement for executive officers.

17.          PARACHUTE TAXES

(a)           The following terms shall have the meanings set forth below for purposes of this Section 17.

(i)            “Accounting Firm” means a certified public accounting firm chosen by the Company.

7

(ii)           “After-Tax” means after taking into account all applicable Taxes and Excise Tax.

(iii)         “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(iv)          “Gross-Up Payment” means an amount such that, after payment by Executive of all Taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, (i) any income and FICA taxes (and any interest and penalties imposed with respect thereto) and (ii) Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in either the state and locality of Executive’s place of employment at the time of the Change in Control or in the state and locality of residence at the time or times of payment, as applicable, net of the maximum reduction in federal income taxes that could be obtained from the deduction of the state and local taxes.

(v)            “Parachute Value” of a Payment means the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(vi)          “Payment” means any payment, distribution or benefit in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise.

(vii)         “Safe Harbor Amount” means 2.99 times Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

(viii)        “Taxes” means all federal, state, local and foreign income, excise, social security and other taxes, other than the Excise Tax, and any associated interest and penalties.

(ix)          “Underpayment” has the meaning set forth in Section 17(c).

(b)           If any Payment is subject to the Excise Tax, then the Company shall pay Executive a Gross-Up Payment (regardless of whether Executive’s employment has terminated). Notwithstanding the foregoing, if the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then the Company shall not pay Executive a Gross-Up Payment, and the Payments due to Executive from the Company shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount.  The reduction of Payments, if applicable, shall be made by first reducing the acceleration of Executive’s stock option vesting (if any), and then by reducing the payments under Section 12(e)(v), (iv), (ii), (iii), (i), in that order, unless an alternative method of reduction is elected by Executive, subject to approval by the Company, and in any event shall be made in such a manner as to maximize the economic present

8

value of all Payments actually made to Executive, determined by the Accounting Firm as of the date of the Change in Control for purposes of Section 280G of the Code using the discount rate required by Section 280G(d)(4) of the Code.

(c)           All determinations required to be made under this Section 17, including whether and when Gross-Up Payments are required and the amount of such Gross-Up Payments, whether and in what manner any Payments are to be reduced pursuant to the second sentence of Section 17(b), and the assumptions to be utilized in arriving at such determinations, shall be made by the Accounting Firm, and shall be binding upon the Company and Executive, except to the extent the Internal Revenue Service or a court of competent jurisdiction makes an inconsistent final and binding determination. The Accounting Firm shall provide detailed supporting calculations both to the Company and Executive within 15 business days after receiving notice from Executive that there has been a Payment or such earlier time as may be requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment that becomes due pursuant to this Section 17 shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm’s determination, or, if later, at least 20 business days before Executive is obligated to pay the related Excise Tax. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (an “Underpayment”). In the event the Accounting Firm determines that there has been an Underpayment or Executive is required to make a payment of any Excise Tax as a result of a claim described in Section 17(d), then the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

(d)           Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than 10 business days after Executive is informed in writing of such claim. Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that the Company desires to contest such claim, Executive shall:

(i)            give the Company any information reasonably requested by the Company relating to such claim,

(ii)           take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii)         cooperate with the Company in good faith in order effectively to contest such claim, and

9

(iv)          permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold Executive harmless, on an After-Tax basis, for any Excise Tax or Taxes imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 17(d), the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either direct Executive to pay the Taxes claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an After-Tax basis, from any Excise Tax or Taxes imposed with respect to such advance or with respect to any imputed income in connection with such advance; and provided, further, that any extension of the relevant statute of limitations is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e)           If, at any time after receiving a Gross-Up Payment or an advance pursuant to Section 17(d), Executive receives any refund of the associated Excise Tax, Executive shall promptly pay to the Company the amount of such refund, together with any interest paid or credited thereon net of all Taxes applicable thereto. If, after Executive receives an advance pursuant to Section 17(d), a determination is made that Executive is not entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid, and the amount of any Gross-Up Payment owed to Executive shall be reduced (but not below zero) by the amount of such advance.

(f)            Notwithstanding any other provision of this Section 17, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of Executive, all or any portion of any Gross-Up Payment, and Executive hereby consents to such withholding.

18.          MISCELLANEOUS.

(a)           Taxes.  Except as specifically set forth herein, Executive agrees to be responsible for the payment of any taxes due on any and all compensation, stock option, restricted stock or other benefits provided by the Company pursuant to this Agreement.  Executive acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

10

(b)           Modification/Waiver.  This Agreement may not be amended, modified, superseded, canceled, renewed or expanded, or any terms or covenants hereof waived, except by a writing executed by each of the parties hereto or, in the case of a waiver, by the party waiving compliance.  Failure of any party at any time or times to require performance of any provision hereof shall in no manner affect his or its right at a later time to enforce the same.  No waiver by a party of a breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any agreement contained in the Agreement.

(c)           Costs of Enforcement.  If any contest or dispute shall arise under this Agreement, each party hereto shall bear its own legal fees and expenses.

(d)           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

(e)           Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

(f)            Notices.  All notices given hereunder shall be given by certified mail, addressed, or delivered by hand, to the other party at his or its address as set forth herein, or at any other address hereafter furnished by notice given in like manner.  Executive promptly shall notify Company of any change in Executive’s address.  Each notice shall be dated the date of its mailing or delivery and shall be deemed given, delivered or completed on such date.

(g)           Governing Law; Personal Jurisdiction and Venue.  This Agreement and all disputes relating to this Agreement shall be governed in all respects by the laws of the State of Colorado as such laws are applied to agreements between Colorado residents entered into and performed entirely in Colorado.  The Parties acknowledge that this Agreement constitutes the minimum contacts to establish personal jurisdiction in Colorado and agree to a Colorado court’s exercise of personal jurisdiction.  The Parties further agree that any disputes relating to this Agreement shall be brought in courts located in the State of Colorado.

(h)           Entire Agreement.  This Agreement, together with the other agreements and exhibits specifically referenced herein, set forth the entire agreement and understanding of the parties hereto with regard to the employment of the Executive by the Company and supersede any and all prior agreements, arrangements and understandings, written or oral, pertaining to the subject matter hereof, including the Original Agreement.  No representation, promise or inducement relating to the subject matter hereof has been made to a party that is not embodied in these Agreements, and no party shall be bound by or liable for any alleged representation, promise or inducement not so set forth herein.

11

(i)            Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

[Remainder of Page Intentionally Left Blank]

12

IN WITNESS WHEREOF, the parties have each duly executed this AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as of the day and year first above written.

ALLOS THERAPEUTICS, INC.
/s/ Paul L. Berns
By:		Paul L. Berns
Its:		President and Chief Executive Officer
Address:		11080 CirclePoint Road
		Westminster, CO 80020
EXECUTIVE:
/s/ Pablo J. Cagnoni
By:	Pablo J. Cagnoni, MD
Address:	1326 S. Columbine St.
	Denver, CO 80210

13

EXHIBIT A TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RELEASE AGREEMENT

I understand that my position with Allos Therapeutics, Inc. (the “Company”) terminated effective                       ,            (the “Separation Date”).  The Company has agreed that if I choose to sign this Release, the Company will pay me certain severance or consulting benefits pursuant to the terms of the Employment Agreement (the “Agreement”) between myself and the Company, and any agreements incorporated therein by reference.  I understand that I am not entitled to such benefits unless I sign this Release and it becomes fully effective.  I understand that, regardless of whether I sign this Release, the Company will pay me all of my accrued salary and vacation through the Separation Date, to which I am entitled by law.

In consideration for the severance benefits I am receiving under the Agreement, I hereby release the Company and its officers, directors, agents, attorneys, employees, shareholders, parents, subsidiaries, and affiliates from any and all claims, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature, whether they are now known or unknown, arising at any time prior to the date I sign this Release.  This general release includes, but is not limited to:  all federal and state statutory and common law claims, claims related to my employment or the termination of my employment or related to breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form of equity or compensation.  Notwithstanding the release in the preceding sentence, I am not releasing any right of indemnification I may have for any liabilities arising from my actions within the course and scope of my employment with the Company.

If I am forty (40) years of age or older as of the Separation Date, I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).  I also acknowledge that the consideration given for the waiver in the above paragraph is in addition to anything of value to which I was already entitled.  I have been advised by this writing, as required by the ADEA that:  (a) my waiver and release do not apply to any claims that may arise after my signing of this Release; (b) I should consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days within which to consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I have seven (7) days following the execution of this release to revoke the Release; and (e) this Release will not be effective until the eighth day after this Release has been signed both by me and by the Company (“Effective Date”).

Agreed:

ALLOS THERAPEUTICS INC.	PABLO J. CAGNONI
By:
Name:
Title:
Date:	Date:

EX-10.22

EXHIBIT 10.22

ALLOS THERAPEUTICS, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

JAMES V. CARUSO

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective as of December 13, 2007, by and between ALLOS THERAPEUTICS, INC., (the “Company”), and JAMES V. CARUSO (“Executive”) (collectively, the “Parties”).

WHEREAS, the Company wishes to continue to employ Executive and to assure itself of the continued services of Executive on the terms set forth herein;

WHEREAS, Executive wishes to be so employed under the terms set forth herein;

WHEREAS, Executive and the Company are parties to the Employment Agreement (the “Original Agreement”) dated June 5, 2006 (the “Effective Date”);

WHEREAS, the Company and Executive desire to amend and restate the Original Agreement to, among other things, (i) reflect certain changes such that the Executive will not be subject to adverse tax consequences under Section 409A of the Code (as defined below) and (ii) implement certain changes recommended by the Company’s outside compensation consultant regarding Executive’s change in control severance benefits; and

WHEREAS, the Company and Executive intend that this Agreement shall supersede and replace the Original Agreement.

NOW, THEREFORE, in consideration of the promises, mutual covenants, the above recitals, and the agreements herein set forth, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree to the following terms and conditions of Executive’s employment:

1.             EMPLOYMENT.  The Company hereby agrees to employ Executive as Executive Vice President, Chief Commercial Officer and Executive hereby accepts such employment upon the terms and conditions set forth herein as of the date first written above. Executive commenced employment with the Company on June 5, 2006 (“Start Date”).

2.             AT-WILL EMPLOYMENT.  It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive’s employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and/or with or without notice.  The nature, terms or conditions of Executive’s employment with the Company cannot be changed by any oral representation, custom, habit or practice, or any other writing.  In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future,

concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control.  This at-will status cannot be altered except in writing signed by Executive and the Chairman of the Board of Directors.

3.             DUTIES.  Executive shall render full-time services to the Company as the Executive Vice President, Chief Commercial Officer of the Company (together with such other position or positions consistent with Executive’s title as the Board shall specify from time to time) and shall have such duties typically associated with such title.  Subject to the foregoing, Executive also agrees to serve as an officer and/or director of the Company or any parent or subsidiary of the Company, as specified by the Board, in each case without additional compensation.  Employee shall report directly and exclusively to the Chief Executive Officer of the Company.  Subject to the terms and conditions set forth in this Agreement, Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during his employment with the Company pursuant to this Agreement, including, without limitation, any activity that (a) conflicts with the interests of the Company or its subsidiaries, (b) interferes with the proper and efficient performance of his duties for the Company, or (c) interferes with the exercise of his judgment in the Company’s best interests.  Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) serving, with the prior written consent of the Board, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) subject to the terms and conditions set forth in the Confidentiality Agreement (as defined below), managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

4.             POLICIES AND PROCEDURES.  Executive agrees that he is subject to and will comply with the policies and procedures of the Company, as such policies and procedures may be modified, added to or eliminated from time to time at the sole discretion of the Company, except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement.  Executive further agrees and acknowledges that any written or oral policies and procedures of the Company do not constitute contracts between the Company and Executive.

5.             COMPENSATION.  For all services rendered and to be rendered hereunder, the Company agrees to pay to the Executive, and the Executive agrees to accept a base salary of $379,600 per annum (“Base Salary”). Any such salary shall be payable in equal biweekly installments and shall be subject to such deductions or withholdings as the Company is required to make pursuant to law, or by further agreement with the Executive.  Executive’s salary shall be subject to annual review and adjustment by the Compensation Committee of the Board of Directors.

6.             ANNUAL BONUS.  Executive will be eligible to participate in the Company’s Corporate Bonus Plan, pursuant to which Executive will be eligible for an annual bonus award to be determined in accordance with the terms of the plan (“Annual Bonus”).  For 2007, Executive’s target bonus award under the Corporate Bonus Plan shall equal 35% of Executive’s actual base salary earned in 2007, weighted 60% to the achievement of the Company’s corporate objectives and 40% to the achievement of individual objectives determined by the Compensation

2

Committee of the Company’s Board of Directors, in consultation with the Chief Executive Officer.  A copy of the Corporate Bonus Plan has been provided to Executive.

7.             Intentionally omitted.

8.             Intentionally omitted.

9.             Intentionally omitted.

10.          OTHER BENEFITS.  While employed by the Company as provided herein:

(a)           Executive and Employee Benefits.  The Executive shall be entitled to all benefits to which other executive officers of the Company are entitled, on terms comparable thereto, including, without limitation, participation in the 401(k) plan, group insurance policies and plans, medical, health, vision, and disability insurance policies and plans, and the like, which may be maintained by the Company for the benefit of its executives. The Company reserves the right to alter and amend the benefits received by Executive from time to time at the Company’s discretion.

(b)           Out-of-Pocket Expense Reimbursement.  The Executive shall receive, against presentation of proper receipts and vouchers, reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company.

(c)           Personal Time Off.  The Executive shall be entitled to the same number of holidays and sick days as are generally allowed to executive officers of the Company and to the maximum amount of vacation allowed to executive officers of the Company, in accordance with Company policies in effect from time to time.

11.          PROPRIETARY AND OTHER OBLIGATIONS.  Executive has signed and agrees to comply with the Company’s standard form of Employee Confidentiality and Inventions Assignment Agreement (“Confidentiality Agreement”) as a condition of his continued employment by the Company.  Executive further agrees that all Company-related business procured by the Executive, and all Company-related business opportunities and plans made known to Executive while employed by the Company, are and shall remain the permanent and exclusive property of the Company.

12.          TERMINATION.  Executive and the Company each acknowledge that either party has the right to terminate Executive’s employment with the Company at any time for any reason whatsoever, with or without cause or advance notice pursuant to the following:

(a)           Termination by Death or Disability.  Subject to applicable state or federal law, in the event Executive shall die during the period of his employment hereunder or become permanently disabled, as evidenced by notice to the Company and Executive’s inability to carry out his job responsibilities for a continuous period of more than three months, Executive’s employment and the Company’s obligation to make payments hereunder shall terminate on the date of his death, or the date upon which, in the sole determination of the Board of Directors, Executive has failed to carry out his job responsibilities for three months, except that the Company shall pay Executive’s estate any salary earned but unpaid prior to termination,

3

all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(b)           Voluntary Resignation by Executive.  In the event Executive voluntarily terminates his employment with the Company (other than for Good Reason (as defined below)), the Company’s obligation to make payments hereunder shall cease upon such termination, except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(c)           Termination for Just Cause.  In the event the Executive is terminated by the Company for Just Cause (as defined below), the Company’s obligation to make payments hereunder shall cease upon the date of receipt by Executive of written notice of such termination (the “date of termination” for purposes of this Section 12(c)), except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(d)           Termination by the Company without Just Cause or Resignation for Good Reason (Other Than Change in Control).  The Company shall have the right to terminate Executive’s employment with the Company at any time without Just Cause.  In the event Executive is terminated by the Company without Just Cause or Executive resigns for Good Reason (other than in connection with a Change in Control (as defined below)), and upon the execution of a full general release by Executive (“Release”), in the form attached hereto as Exhibit A, releasing all claims known or unknown that Executive may have against the Company as of the date Executive signs such release, and upon the written acknowledgment of his continuing obligations under the Confidentiality Agreement, Executive shall be entitled to receive the following severance benefits: (i) continuation of Executive’s base salary, then in effect, for a period of twelve (12) months following the date of termination, paid on the same basis and at the same time as previously paid or as otherwise required under Section 15 of this Agreement; (ii) payment of any accrued but unused vacation and sick leave; and (iii) the Company shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of twelve (12) months following the date of termination; provided, however, that (a) the Company shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the termination without Just Cause or resignation for Good Reason and (b) the Company’s obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(e)           Change in Control Severance Benefits.  In the event that the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control (a “Change in Control Termination”), and upon the execution of a Release, Executive shall be entitled to receive the following Change in

4

Control severance benefits: (i) a lump-sum cash payment in an amount equal to (A) 1.5 times Executive’s annual base salary then in effect, plus (B) 1.5 times the greater of (1) Executive’s annualized target bonus award for the year in which Executive’s employment terminates or (2) the Annual Bonus amount paid to Executive in the immediately preceding year; (ii) payment of any accrued but unused vacation and sick leave; (iii) payment of Executive’s target bonus award for the year in which Executive’s employment terminates, prorated through the date of the Change in Control Termination; (iv) the Company (or any surviving or acquiring corporation) shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of eighteen (18) months following a Change in Control Termination; and (v) the Company (or any surviving or acquiring corporation) shall pay the costs of outplacement assistance services from an outplacement agency selected by Executive for a period of nine (9) months following a Change in Control Termination, up to maximum of $11,250 in aggregate; provided, however, that (a) the Company (or any surviving or acquiring corporation) shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the Change in Control Termination and (b) the Company’s (or any surviving or acquiring corporation’s) obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Executive agrees that the Company’s (or any surviving or acquiring corporation) payment of health insurance premiums will satisfy its obligations under COBRA for the period provided.

In addition, notwithstanding anything contained in Executive’s stock option or restricted stock grant agreements to the contrary, in the event the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control, and any surviving corporation or acquiring corporation assumes Executive’s stock options and/or restricted stock, as applicable, or substitutes similar stock options or stock awards for Executive’s stock options and/or restricted stock, as applicable, in accordance with the terms of the Company’s equity incentive plans, then (i) the vesting of all of Executive’s stock options and/or restricted stock (or substitute stock options or stock awards), as applicable, shall be accelerated in full and (ii) the term and the period during which Executive’s stock options may be exercised shall be extended to twelve (12) months after the date of Executive’s termination of employment; provided, that, in no event shall such options be exercisable after the expiration date of such options as set forth in the stock option grant notice and/or agreement evidencing such options.

(f)            Legal Costs.  Following a Change in Control, in the event Executive institutes and prevails in litigation regarding the validity or enforceability of, or liability under, any material provision of this Section 12 or any guarantee of performance thereof, the Executive shall be entitled to payment of his reasonable attorneys fees and expenses by the Company.

13.          DEFINITIONS.

(a)           Just Cause.  As used in this Agreement, “Just Cause” shall mean the occurrence of one or more of the following: (i) Executive’s conviction of a felony or a crime involving moral turpitude or dishonesty; (ii) Executive’s participation in a fraud or act of dishonesty against the Company; (iii) Executive’s intentional and material damage to the Company’s property; (iv) material breach of Executive’s employment agreement, the Company’s

5

written policies, or the Confidentiality Agreement that is not remedied by Executive within fourteen (14) days of written notice of such breach from the Board of Directors; or (v) conduct by Executive which demonstrates Executive’s gross unfitness to serve the Company as Executive Vice President, Chief Commercial Officer, as determined in the sole discretion of the Board of Directors.  Executive’s physical or mental disability or death shall not constitute cause hereunder.

(b)           Good Reason.  As used in this Agreement, “Good Reason” shall mean any one of the following events which occurs without Executive’s consent on or after the commencement of Executive’s employment provided that Executive has first provided written notice to any member of the Board (or the surviving corporation, as applicable) of the occurrence of such event(s) within 90 days of the first such occurrence and the Company (or surviving corporation) has not cured such event(s) within 30 days after Executive’s written notice is received by such member of the Board (or by the surviving corporation):  (i) a reduction of Executive’s then existing annual salary base or annual bonus target by more than ten percent (10%), unless the Executive accepts such reduction or such reduction is done in conjunction with similar reductions for similarly situated employees of the Company (it being understood that, solely for purposes of this paragraph 13(b), such a reduction in the annual bonus target not accepted by Executive is considered a material breach of this Agreement); (ii) any request by the Company (or any surviving or acquiring corporation) that the Executive relocate to a new principal base of operations that would increase Executive’s one-way commute distance by more than thirty-five (35) miles from his then-principal base of operations, unless Executive accepts such relocation opportunity; or (iii) for purposes of Section 12(e) only, if, following a Change in Control, Executive’s benefits and responsibilities are materially reduced, or Executive’s base compensation or annual bonus target are reduced by more than 10%, in each case, by comparison to the benefits, responsibilities, base compensation or annual bonus target in effect immediately prior to such reduction (it being understood that, solely for purposes of this paragraph 13(b), the aforementioned reductions in the annual bonus target or benefits are considered a material breach of this Agreement).

(c)           Change in Control.  As used in this Agreement, a “Change in Control” is defined as: (a) a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the assets of the Company (other than the transfer of the Company’s assets to a majority-owned subsidiary corporation); (b) a merger or consolidation in which the Company is not the surviving corporation (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction); (c) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the Company); or (d) any transaction or series of related transactions in which in excess of 50% of the Company’s voting power is transferred.

14.          TERMINATION OF COMPANY’S OBLIGATIONS.  Notwithstanding any provisions in this Agreement to the contrary, the Company’s obligations, and Executive’s rights pursuant to Sections 12(d) and 12(e) herein, regarding salary continuation and the payment of COBRA

6

premiums, shall cease and be rendered a nullity immediately should Executive fail to comply with the provisions of the Confidentiality Agreement or if Executive directly or indirectly competes with the Company.

15.          CODE SECTION 409A COMPLIANCE.To the extent any payments or benefits pursuant to Section 12 above (a) are paid from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, such severance benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (b) are paid following said March 15, such Severance Benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, (c) represent the reimbursement or payment of costs for outplacement services, such payments are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and to qualify for the exception from deferred compensation pursuant to Section 1.409A-1(b)(9)(v)(A); and (d) are in excess of the amounts specified in clauses (a), (b) and (c) of this paragraph, shall (unless otherwise exempt under Treasury Regulations) be considered separate payments subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments or benefits be delayed until 6 months after Executive’s separation from service if Executive is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service. In the event that a six month delay of any such separation payments or benefits is required, on the first regularly scheduled pay date following the conclusion of the delay period Executive shall receive a lump sum payment or benefit in an amount equal to the separation payments and benefits that were so delayed, and any remaining separation payments or benefits shall be paid on the same basis and at the same time as otherwise specified pursuant to this Agreement (subject to applicable tax withholdings and deductions).

16.          INDEMNIFICATION.  The Company and Executive have entered into and agree to comply with the Company’s standard form of indemnification agreement for executive officers.

17.          PARACHUTE TAXES

(a)           The following terms shall have the meanings set forth below for purposes of this Section 17.

(i)            “Accounting Firm” means a certified public accounting firm chosen by the Company.

(ii)           “After-Tax” means after taking into account all applicable Taxes and Excise Tax.

(iii)         “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

7

(iv)          “Gross-Up Payment” means an amount such that, after payment by Executive of all Taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, (i) any income and FICA taxes (and any interest and penalties imposed with respect thereto) and (ii) Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in either the state and locality of Executive’s place of employment at the time of the Change in Control or in the state and locality of residence at the time or times of payment, as applicable, net of the maximum reduction in federal income taxes that could be obtained from the deduction of the state and local taxes.

(v)            “Parachute Value” of a Payment means the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(vi)          “Payment” means any payment, distribution or benefit in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise.

(vii)         “Safe Harbor Amount” means 2.99 times Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

(viii)        “Taxes” means all federal, state, local and foreign income, excise, social security and other taxes, other than the Excise Tax, and any associated interest and penalties.

(ix)          “Underpayment” has the meaning set forth in Section 17(c).

(b)           If any Payment is subject to the Excise Tax, then the Company shall pay Executive a Gross-Up Payment (regardless of whether Executive’s employment has terminated). Notwithstanding the foregoing, if the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then the Company shall not pay Executive a Gross-Up Payment, and the Payments due to Executive from the Company shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount.  The reduction of Payments, if applicable, shall be made by first reducing the acceleration of Executive’s stock option vesting (if any), and then by reducing the payments under Section 12(e)(v), (iv), (ii), (iii), (i), in that order, unless an alternative method of reduction is elected by Executive, subject to approval by the Company, and in any event shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm as of the date of the Change in Control for purposes of Section 280G of the Code using the discount rate required by Section 280G(d)(4) of the Code.

(c)           All determinations required to be made under this Section 17, including whether and when Gross-Up Payments are required and the amount of such Gross-Up Payments,

8

whether and in what manner any Payments are to be reduced pursuant to the second sentence of Section 17(b), and the assumptions to be utilized in arriving at such determinations, shall be made by the Accounting Firm, and shall be binding upon the Company and Executive, except to the extent the Internal Revenue Service or a court of competent jurisdiction makes an inconsistent final and binding determination. The Accounting Firm shall provide detailed supporting calculations both to the Company and Executive within 15 business days after receiving notice from Executive that there has been a Payment or such earlier time as may be requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment that becomes due pursuant to this Section 17 shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm’s determination, or, if later, at least 20 business days before Executive is obligated to pay the related Excise Tax. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (an “Underpayment”). In the event the Accounting Firm determines that there has been an Underpayment or Executive is required to make a payment of any Excise Tax as a result of a claim described in Section 17(d), then the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

(d)           Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than 10 business days after Executive is informed in writing of such claim. Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that the Company desires to contest such claim, Executive shall:

(i)            give the Company any information reasonably requested by the Company relating to such claim,

(ii)           take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii)         cooperate with the Company in good faith in order effectively to contest such claim, and

(iv)          permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold Executive harmless, on an After-Tax basis, for any Excise Tax or Taxes imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 17(d), the Company shall control all

9

proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either direct Executive to pay the Taxes claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an After-Tax basis, from any Excise Tax or Taxes imposed with respect to such advance or with respect to any imputed income in connection with such advance; and provided, further, that any extension of the relevant statute of limitations is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e)           If, at any time after receiving a Gross-Up Payment or an advance pursuant to Section 17(d), Executive receives any refund of the associated Excise Tax, Executive shall promptly pay to the Company the amount of such refund, together with any interest paid or credited thereon net of all Taxes applicable thereto. If, after Executive receives an advance pursuant to Section 17(d), a determination is made that Executive is not entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid, and the amount of any Gross-Up Payment owed to Executive shall be reduced (but not below zero) by the amount of such advance.

(f)            Notwithstanding any other provision of this Section 17, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of Executive, all or any portion of any Gross-Up Payment, and Executive hereby consents to such withholding.

18.          MISCELLANEOUS.

(a)           Taxes.  Except as specifically set forth herein, Executive agrees to be responsible for the payment of any taxes due on any and all compensation, stock option, restricted stock or other benefits provided by the Company pursuant to this Agreement.  Executive acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

(b)           Intentionally omitted.

(c)           Modification/Waiver.  This Agreement may not be amended, modified, superseded, canceled, renewed or expanded, or any terms or covenants hereof waived, except by a writing executed by each of the parties hereto or, in the case of a waiver, by the party waiving

10

compliance.  Failure of any party at any time or times to require performance of any provision hereof shall in no manner affect his or its right at a later time to enforce the same.  No waiver by a party of a breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any agreement contained in the Agreement.

(d)           Costs of Enforcement.  If any contest or dispute shall arise under this Agreement, each party hereto shall bear its own legal fees and expenses.

(e)           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

(f)            Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

(g)           Notices.  All notices given hereunder shall be given by certified mail, addressed, or delivered by hand, to the other party at his or its address as set forth herein, or at any other address hereafter furnished by notice given in like manner.  Executive promptly shall notify Company of any change in Executive’s address.  Each notice shall be dated the date of its mailing or delivery and shall be deemed given, delivered or completed on such date.

(h)           Governing Law; Personal Jurisdiction and Venue.  This Agreement and all disputes relating to this Agreement shall be governed in all respects by the laws of the State of Colorado as such laws are applied to agreements between Colorado residents entered into and performed entirely in Colorado.  The Parties acknowledge that this Agreement constitutes the minimum contacts to establish personal jurisdiction in Colorado and agree to a Colorado court’s exercise of personal jurisdiction.  The Parties further agree that any disputes relating to this Agreement shall be brought in courts located in the State of Colorado.

(i)            Entire Agreement.  This Agreement, together with the other agreements and exhibits specifically referenced herein, set forth the entire agreement and understanding of the parties hereto with regard to the employment of the Executive by the Company and supersede any and all prior agreements, arrangements and understandings, written or oral, pertaining to the subject matter hereof, including the Original Agreement.  No representation, promise or inducement relating to the subject matter hereof has been made to a party that is not embodied in these Agreements, and no party shall be bound by or liable for any alleged representation, promise or inducement not so set forth herein.

(j)            Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall

11

constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

[Remainder of Page Intentionally Left Blank]

12

IN WITNESS WHEREOF, the parties have each duly executed this AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as of the day and year first above written.

ALLOS THERAPEUTICS, INC.
/s/ Paul L. Berns
By:	Paul L. Berns
Its:	President and Chief Executive Officer
Address:	11080 CirclePoint Road
	Westminster, CO 80020
EXECUTIVE:
/s/ James V. Caruso
By:	James V. Caruso
Address:	32 Coddington Ct.
	Belle Mead, NJ 08502

13

EXHIBIT A TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RELEASE AGREEMENT

I understand that my position with Allos Therapeutics, Inc. (the “Company”) terminated effective                       ,            (the “Separation Date”).  The Company has agreed that if I choose to sign this Release, the Company will pay me certain severance or consulting benefits pursuant to the terms of the Employment Agreement (the “Agreement”) between myself and the Company, and any agreements incorporated therein by reference.  I understand that I am not entitled to such benefits unless I sign this Release and it becomes fully effective.  I understand that, regardless of whether I sign this Release, the Company will pay me all of my accrued salary and vacation through the Separation Date, to which I am entitled by law.

In consideration for the severance benefits I am receiving under the Agreement, I hereby release the Company and its officers, directors, agents, attorneys, employees, shareholders, parents, subsidiaries, and affiliates from any and all claims, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature, whether they are now known or unknown, arising at any time prior to the date I sign this Release.  This general release includes, but is not limited to:  all federal and state statutory and common law claims, claims related to my employment or the termination of my employment or related to breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form of equity or compensation.  Notwithstanding the release in the preceding sentence, I am not releasing any right of indemnification I may have for any liabilities arising from my actions within the course and scope of my employment with the Company.

If I am forty (40) years of age or older as of the Separation Date, I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).  I also acknowledge that the consideration given for the waiver in the above paragraph is in addition to anything of value to which I was already entitled.  I have been advised by this writing, as required by the ADEA that:  (a) my waiver and release do not apply to any claims that may arise after my signing of this Release; (b) I should consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days within which to consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I have seven (7) days following the execution of this release to revoke the Release; and (e) this Release will not be effective until the eighth day after this Release has been signed both by me and by the Company (“Effective Date”).

Agreed:

ALLOS THERAPEUTICS INC.	JAMES V. CARUSO
By:
Name:
Title:
Date:	Date:

EX-10.23

EXHIBIT 10.23

ALLOS THERAPEUTICS, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

MARC H. GRABOYES

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective as of December 13, 2007, by and between ALLOS THERAPEUTICS, INC., (the “Company”), and MARC H. GRABOYES (“Executive”) (collectively, the “Parties”).

WHEREAS, the Company wishes to continue to employ Executive and to assure itself of the continued services of Executive on the terms set forth herein;

WHEREAS, Executive wishes to be so employed under the terms set forth herein;

WHEREAS, Executive and the Company are parties to the Employment Agreement (the “Original Agreement”) dated October 11, 2004;

WHEREAS, the Company and Executive desire to amend and restate the Original Agreement to, among other things, (i) reflect certain changes such that the Executive will not be subject to adverse tax consequences under Section 409A of the Code (as defined below) and (ii) implement certain changes recommended by the Company’s outside compensation consultant regarding Executive’s change in control severance benefits; and

WHEREAS, the Company and Executive intend that this Agreement shall supersede and replace the Original Agreement.

NOW, THEREFORE, in consideration of the promises, mutual covenants, the above recitals, and the agreements herein set forth, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree to the following terms and conditions of Executive’s employment:

1.             EMPLOYMENT.  The Company hereby agrees to employ Executive as Vice President, General Counsel and Executive hereby accepts such employment upon the terms and conditions set forth herein as of the date first written above.  Executive commenced employment with the Company on October 11, 2004.

2.             AT-WILL EMPLOYMENT.  It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive’s employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and/or with or without notice.  The nature, terms or conditions of Executive’s employment with the Company cannot be changed by any oral representation, custom, habit or practice, or any other writing.  In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is

1

guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future, concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control.  This at-will status cannot be altered except in writing signed by Executive and the Chairman of the Board of Directors.

3.             DUTIES.  Executive shall render full-time services to the Company as its Vice President, General Counsel.  At the outset of employment, Executive shall report to the Company’s Chief Executive Officer.  Executive shall devote his best efforts and his full business time, skill and attention to the performance of his duties on behalf of the Company.  Of course, the Company reserves the right to modify Executive’s job duties and responsibilities as necessary.

4.             POLICIES AND PROCEDURES.  Executive agrees that he is subject to and will comply with the policies and procedures of the Company, as such policies and procedures may be modified, added to or eliminated from time to time at the sole discretion of the Company, except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement.  Executive further agrees and acknowledges that any written or oral policies and procedures of the Company do not constitute contracts between the Company and Executive.

5.             COMPENSATION.  For all services rendered and to be rendered hereunder, the Company agrees to pay to the Executive, and the Executive agrees to accept a base salary of $255,467 per annum. Any such salary shall be payable in equal biweekly installments and shall be subject to such deductions or withholdings as the Company is required to make pursuant to law, or by further agreement with the Executive.  The Board of Directors may adjust the Executive’s compensation from time to time in its sole and complete discretion.

6.             BONUS.  Executive will be eligible to participate in the Company’s Corporate Bonus Plan, pursuant to which Executive will be eligible for an annual bonus award to be determined in accordance with the terms of the plan (“Annual Bonus”).  For 2007, Executive’s target bonus award under the Corporate Bonus Plan shall equal 25% of Executive’s actual base salary earned in 2007, weighted 60% to the achievement of the Company’s corporate objectives and 40% to the achievement of individual objectives determined by the Compensation Committee of the Company’s Board of Directors, in consultation with the Chief Executive Officer.  A copy of the Corporate Bonus Plan has been provided to Employee.

7.             Intentionally omitted.

8.             OTHER BENEFITS.  While employed by the Company as provided herein:

(a)           Executive and Employee Benefits.  The Executive shall be entitled to all benefits to which other executive officers of the Company are entitled, on terms comparable thereto, including, without limitation, participation in the 401(k) plan, group insurance policies and plans, medical, health, vision, and disability insurance policies and plans, and the like, which may be maintained by the Company for the benefit of its executives. The Company reserves the right to alter and amend the benefits received by Executive from time to time at the Company’s discretion.

2

(b)           Out-of-Pocket Expense Reimbursement.  The Executive shall receive, against presentation of proper receipts and vouchers, reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company.

(c)           Personal Time Off.  The Executive shall be entitled to personal time off and sick leave according to the Company’s benefits package.

9.             PROPRIETARY AND OTHER OBLIGATIONS.  Executive has signed and agrees to comply with the Company’s standard form of Employee Confidentiality and Inventions Assignment Agreement (“Confidentiality Agreement”) as a condition of his continued employment by the Company.

10.          TERMINATION.  Executive and the Company each acknowledge that either party has the right to terminate Executive’s employment with the Company at any time for any reason whatsoever, with or without cause or advance notice pursuant to the following:

(a)           Termination by Death or Disability.  Subject to applicable state or federal law, in the event Executive shall die during the period of his employment hereunder or become permanently disabled, as evidenced by notice to the Company and Executive’s inability to carry out his job responsibilities for a continuous period of more than three months, Executive’s employment and the Company’s obligation to make payments hereunder shall terminate on the date of his death, or the date upon which, in the sole determination of the Board of Directors, Executive has failed to carry out his job responsibilities for three months, except that the Company shall pay Executive’s estate any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(b)           Voluntary Resignation by Executive.  In the event Executive voluntarily terminates his employment with the Company (other than for Good Reason (as defined below)), the Company’s obligation to make payments hereunder shall cease upon such termination, except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(c)           Termination for Just Cause.  In the event the Executive is terminated by the Company for Just Cause (as defined below), the Company’s obligation to make payments hereunder shall cease upon the date of receipt by Executive of written notice of such termination (the “date of termination” for purposes of this paragraph 10(c)), except that the Company shall pay Executive any salary earned but unpaid prior to termination, all accrued but unused vacation and any business expenses that were incurred but not reimbursed as of the date of termination.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(d)           Termination by the Company without Just Cause Or Resignation for Good Reason (Other Than Change in Control).  The Company shall have the right to terminate Executive’s employment with the Company at any time without Just Cause.  In the

3

event Executive is terminated by the Company without Just Cause or Executive resigns for Good Reason (other than in connection with a Change in Control (as defined below)), and upon the execution of a full general release by Executive (“Release”, in the form attached hereto as Exhibit B), releasing all claims known or unknown that Executive may have against the Company as of the date Executive signs such release, and upon the written acknowledgment of his continuing obligations under the Confidentiality Agreement, Executive shall be entitled to receive the following severance benefits:  (i) continuation of Executive’s base salary, then in effect, for a period of six (6) months following the Termination Date, paid on the same basis and at the same time as previously paid; (ii) payment of any accrued but unused vacation and sick leave; and (iii) the Company shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of six (6) months following a termination without Just Cause or resignation for Good Reason; provided, however, that (a) the Company shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the termination without Just Cause or resignation for Good Reason and (b) the Company’s obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Vesting of any unvested stock options or restricted stock shall cease on the date of termination.

(e)           Change in Control Severance Benefits.  In the event that the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control (“Change in Control Termination”), and upon the execution of a Release, Executive shall be entitled to receive the following Change in Control severance benefits:  (i) a lump-sum cash payment in an amount equal to (A) Executive’s annual base salary then in effect, plus (B) the greater of (1) Executive’s annualized target bonus award for the year in which Executive’s employment terminates or (2) the Annual Bonus amount paid to Executive in the immediately preceding year; (ii) payment of any accrued but unused vacation and sick leave; (iii) payment of Executive’s target bonus award for the year in which Executive’s employment terminates, prorated through the date of the Change in Control Termination; (iv) the Company (or any surviving or acquiring corporation) shall pay the premiums of Executive’s group health insurance COBRA continuation coverage, including coverage for Executive’s eligible dependents, for a maximum period of twelve (12) months following a Change in Control Termination; and (v) the Company (or any surviving or acquiring corporation) shall pay the costs of outplacement assistance services from an outplacement agency selected by Executive for a period of six (6) months following a Change in Control Termination, up to maximum of $7,500 in aggregate; provided, however, that (a) the Company (or any surviving or acquiring corporation) shall pay premiums for Executive’s eligible dependents only for coverage for which those eligible dependents were enrolled immediately prior to the Change in Control Termination and (b) the Company’s (or any surviving or acquiring corporation’s) obligation to pay such premiums shall cease immediately upon Executive’s eligibility for comparable group health insurance provided by a new employer of Executive.  Executive agrees that the Company’s (or any surviving or acquiring corporation’s) payment of health insurance premiums will satisfy its obligations under COBRA for the period provided.  No insurance premium payments will be made following the effective date of Executive’s coverage by a health insurance plan of a subsequent employer.  For the balance of the period that Executive is entitled

4

to coverage under federal COBRA law, if any, Executive shall be entitled to maintain such coverage at Executive’s own expense.

In addition, notwithstanding anything contained in Executive’s stock option or restricted stock grant agreements to the contrary, in the event the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Just Cause or Executive resigns for Good Reason within one (1) month prior to or twelve (12) months following the effective date of a Change in Control, and any surviving corporation or acquiring corporation assumes Executive’s stock options and/or restricted stock, as applicable, or substitutes similar stock options or stock awards for Executive’s stock options and/or restricted stock, as applicable, in accordance with the terms of the Company’s equity incentive plans, then (i) the vesting of all of Executive’s stock options and/or restricted stock (or any substitute stock options or stock awards), as applicable, shall be accelerated in full and (ii) the term and the period during which Executive’s stock options may be exercised shall be extended to twelve (12) months after the date of Executive’s termination of employment; provided, that, in no event shall such options be exercisable after the expiration date of such options as set forth in the stock option grant notice and/or agreement evidencing such options.

(f)            Legal Costs.  In the event Executive institutes and prevails in litigation regarding the validity or enforceability of, or liability under, any material provision of this Section 10 or any guarantee of performance thereof, the Executive shall be entitled to payment of his reasonable attorneys fees and expenses by the Company.

11.          DEFINITIONS.

(a)           Just Cause.  As used in this Agreement, “Just Cause” shall mean the occurrence of one or more of the following: (i) Executive’s conviction of a felony or a crime involving moral turpitude or dishonesty; (ii) Executive’s participation in a fraud or act of dishonesty against the Company; (iii) Executive’s intentional and material damage to the Company’s property; (iv) material breach of Executive’s employment agreement, the Company’s written policies, or the Confidentiality Agreement that is not remedied by Executive within fourteen (14) days of written notice of such breach from the Board of Directors; or (v) conduct by Executive which demonstrates Executive’s gross unfitness to serve the Company as Vice President, General Counsel, as determined in the sole discretion of the Board of Directors.  Executive’s physical or mental disability or death shall not constitute cause hereunder.

(b)           Good Reason.  As used in this Agreement, “Good Reason” shall mean any one of the following events which occurs without Executive’s consent on or after the commencement of Executive’s employment provided that Executive has first provided written notice to any member of the Board (or the surviving corporation, as applicable) of the occurrence of such event(s) within 90 days of the first such occurrence and the Company (or surviving corporation) has not cured such event(s) within 30 days after Executive’s written notice is received by such member of the Board (or by the surviving corporation):  (i) a reduction of Executive’s then existing annual salary base or annual bonus target by more than ten percent (10%), unless the Executive accepts such reduction or such reduction is done in conjunction with similar reductions for similarly situated employees of the Company (it being understood that, solely for purposes of this paragraph 11(b), such a reduction in the annual bonus target not accepted by Executive is considered a material breach of this Agreement); (ii) any request by the

5

Company (or any surviving or acquiring corporation) that the Executive relocate to a new principal base of operations that would increase Executive’s one-way commute distance by more than thirty-five (35) miles from his then-principal base of operations, unless Executive accepts such relocation opportunity; or (iii) for purposes of Section 10(e) only, if, following a Change in Control, Executive’s benefits and responsibilities are materially reduced, or Executive’s base compensation or annual bonus target are reduced by more than 10%, in each case, by comparison to the benefits, responsibilities, base compensation or annual bonus target in effect immediately prior to such reduction (it being understood that, solely for purposes of this paragraph 11(b), the aforementioned reductions in the annual bonus target or benefits are considered a material breach of this Agreement).

(c)           Change in Control.  As used in this Agreement, a “Change in Control” is defined as: (a) a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the assets of the Company (other than the transfer of the Company’s assets to a majority-owned subsidiary corporation); (b) a merger or consolidation in which the Company is not the surviving corporation (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction); (c) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (unless the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing at least fifty percent (50%) of the voting power of the Company); or (d) any transaction or series of related transactions in which in excess of 50% of the Company’s voting power is transferred.

12.          TERMINATION OF COMPANY’S OBLIGATIONS.  Notwithstanding any provisions in this Agreement to the contrary, the Company’s obligations, and Executive’s rights pursuant to Sections 10(d) and 10(e) herein, regarding salary continuation and the payment of COBRA premiums, shall cease and be rendered a nullity immediately should Executive fail to comply with the provisions of the Confidentiality Agreement or if Executive directly or indirectly competes with the Company.

13.          CODE SECTION 409A COMPLIANCE.To the extent any payments or benefits pursuant to Section 12 above (a) are paid from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, such severance benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (b) are paid following said March 15, such Severance Benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, (c) represent the reimbursement or payment of costs for outplacement services, such payments are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and to qualify for the exception from deferred compensation pursuant to Section 1.409A-1(b)(9)(v)(A); and (d) are in excess of the amounts specified in clauses (a), (b) and (c) of this paragraph, shall (unless otherwise exempt

6

under Treasury Regulations) be considered separate payments subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments or benefits be delayed until 6 months after Executive’s separation from service if Executive is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service. In the event that a six month delay of any such separation payments or benefits is required, on the first regularly scheduled pay date following the conclusion of the delay period Executive shall receive a lump sum payment or benefit in an amount equal to the separation payments and benefits that were so delayed, and any remaining separation payments or benefits shall be paid on the same basis and at the same time as otherwise specified pursuant to this Agreement (subject to applicable tax withholdings and deductions).

14.          PARACHUTE TAXES.

(a)           The following terms shall have the meanings set forth below for purposes of this Section 14:

(i)            “Accounting Firm” means a certified public accounting firm chosen by the Company.

(ii)           “After-Tax” means after taking into account all applicable Taxes and Excise Tax.

(iii)         “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(iv)          “Payment” means any payment, distribution or benefit in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise.

(v)            “Safe Harbor Amount” means 2.99 times Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

(vi)          “Taxes” means all federal, state, local and foreign income, excise, social security and other taxes, other than the Excise Tax, and any associated interest and penalties.

(b)           If any Payment due Executive is subject to the Excise Tax, then such Payment shall be adjusted, if necessary, to equal the greater of (x) the Safe Harbor Amount or (y) the Payment, whichever results in such Executive’s receipt, After-Tax, of the greatest amount of the Payment. The reduction of Executive’s Payments pursuant to this Section 14, if applicable, shall be made by first reducing the acceleration of Executive’s stock option vesting (if any), and then by reducing the payments under Section 10(e)(v), (iv), (ii), (iii) and (i), in that order, unless an alternative method of reduction is elected by Executive, subject to approval by the Company, and in any event shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm as of the date of the Change in Control for purposes of Section 280G of the Code using the discount rate required by Section 280G(d)(4) of the Code.

7

(c)           All determinations required to be made under this Section 14, including whether and in what manner any Payments are to be reduced pursuant to the second sentence of Section 14(b), and the assumptions to be utilized in arriving at such determinations, shall be made by the Accounting Firm, and shall be binding upon the Company and Executive, except to the extent the Internal Revenue Service or a court of competent jurisdiction makes an inconsistent final and binding determination. The Accounting Firm shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days after receiving notice from Executive that there has been a Payment or such earlier time as may be requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company.

15.          MISCELLANEOUS.

(a)           Taxes.  Except as specifically set forth herein, Executive agrees to be responsible for the payment of any taxes due on any and all compensation, stock option, or benefits provided by the Company pursuant to this Agreement.

(b)           Modification/Waiver.  This Agreement may not be amended, modified, superseded, canceled, renewed or expanded, or any terms or covenants hereof waived, except by a writing executed by each of the parties hereto or, in the case of a waiver, by the party waiving compliance.  Failure of any party at any time or times to require performance of any provision hereof shall in no manner affect his or its right at a later time to enforce the same.  No waiver by a party of a breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any agreement contained in the Agreement.

(c)           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

(d)           Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

(e)           Notices.  All notices given hereunder shall be given by certified mail, addressed, or delivered by hand, to the other party at his or its address as set forth herein, or at any other address hereafter furnished by notice given in like manner.  Executive promptly shall notify Company of any change in Executive’s address.  Each notice shall be dated the date of its mailing or delivery and shall be deemed given, delivered or completed on such date.

(f)            Governing Law; Personal Jurisdiction and Venue.  This Agreement and all disputes relating to this Agreement shall be governed in all respects by the laws of the

8

State of Colorado as such laws are applied to agreements between Colorado residents entered into and performed entirely in Colorado.  The Parties acknowledge that this Agreement constitutes the minimum contacts to establish personal jurisdiction in Colorado and agree to a Colorado court’s exercise of personal jurisdiction.  The Parties further agree that any disputes relating to this Agreement shall be brought in courts located in the State of Colorado.

(g)           Entire Agreement.  This Agreement together with the Exhibits A and B attached hereto set forth the entire agreement and understanding of the parties hereto with regard to the employment of the Executive by the Company and supersede any and all prior agreements, arrangements and understandings, written or oral, pertaining to the subject matter hereof, including the Original Agreement.  No representation, promise or inducement relating to the subject matter hereof has been made to a party that is not embodied in these Agreements, and no party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

[Remainder of Page Intentionally Left Blank]

9

IN WITNESS WHEREOF, the parties have each duly executed this AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as of the day and year first above written.

ALLOS THERAPEUTICS, INC.
/s/ Paul L. Berns
By:	Paul L. Berns
Its:	President and Chief Executive Officer
Address:	11080 CirclePoint Road
	Westminster, CO 80020
EXECUTIVE:
/s/ Marc H. Graboyes
Marc H. Graboyes
Address:	535 Jack Pine Ct.
	Boulder, CO 80304

10

EXHIBIT A TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RELEASE AGREEMENT

I understand that my position with Allos Therapeutics, Inc. (the “Company”) terminated effective                       ,            (the “Separation Date”).  The Company has agreed that if I choose to sign this Release, the Company will pay me certain severance or consulting benefits pursuant to the terms of the Employment Agreement (the “Agreement”) between myself and the Company, and any agreements incorporated therein by reference.  I understand that I am not entitled to such benefits unless I sign this Release and it becomes fully effective.  I understand that, regardless of whether I sign this Release, the Company will pay me all of my accrued salary and vacation through the Separation Date, to which I am entitled by law.

In consideration for the severance benefits I am receiving under the Agreement, I hereby release the Company and its officers, directors, agents, attorneys, employees, shareholders, parents, subsidiaries, and affiliates from any and all claims, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature, whether they are now known or unknown, arising at any time prior to the date I sign this Release.  This general release includes, but is not limited to:  all federal and state statutory and common law claims, claims related to my employment or the termination of my employment or related to breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form of equity or compensation.  Notwithstanding the release in the preceding sentence, I am not releasing any right of indemnification I may have for any liabilities arising from my actions within the course and scope of my employment with the Company.

If I am forty (40) years of age or older as of the Separation Date, I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).  I also acknowledge that the consideration given for the waiver in the above paragraph is in addition to anything of value to which I was already entitled.  I have been advised by this writing, as required by the ADEA that:  (a) my waiver and release do not apply to any claims that may arise after my signing of this Release; (b) I should consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days within which to consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I have seven (7) days following the execution of this release to revoke the Release; and (e) this Release will not be effective until the eighth day after this Release has been signed both by me and by the Company (“Effective Date”).

Agreed:

ALLOS THERAPEUTICS INC.	MARC H. GRABOYES
By:
Name:
Title:
Date:	Date:

EX-10.24

EXHIBIT 10.24

January 21, 2008

Bruce Bennett

4785 Keswick Court

San Diego, CA  92130

Dear Bruce:

We are pleased to offer you the position of Vice President, Manufacturing within Allos Therapeutics, Inc. (“Allos” or the “Company”).  This offer is contingent upon our satisfactory completion of your reference and background checks, drug screening and verification of your eligibility to work within the United States, which can be confirmed with identification documents brought with you on your first day of work.  This position serves as a member of the senior management team, and reports directly to me as President and Chief Executive Officer; provided, however, that unless otherwise determined by the Company’s Board of Directors (the “Board”), you will not be deemed to be an officer of the Company under the Company’s corporate bylaws or otherwise.

You will receive a biweekly salary of $8,846.15, which is an annual equivalent salary of $230,000.  Your salary will be reviewed annually in connection with the Company’s employee performance review and appraisal process and will be subject to such annual increases, if any, as may be determined based upon a review of your individual performance and contributions to the Company during the calendar year.  You will also be eligible to participate in the Company’s Corporate Bonus Plan (the “Plan”), pursuant to which you will be eligible for an annual bonus award to be determined in accordance with the terms of the Plan. For 2008, it is anticipated that your target bonus award under the Plan will equal 25% of your actual base salary earned in 2008, weighted 60% to the achievement of the Company’s corporate objectives and 40% to the achievement of individual objectives determined by the Compensation Committee of the Board or the Company’s Chief Executive Officer.  A copy of the Corporate Bonus Plan will be provided to you.

In addition you will be granted options to purchase 100,000 shares of Allos common stock with a per share exercise price equal to the fair market value of a share of Allos common stock on the date of the grant.  We anticipate that the date of the grant will be no later than the tenth day of the month, or if not a business day, the next succeeding business day, following the month in which you commence employment with the Company.  Provided that you remain an employee of the Company on the applicable vesting date, 25% of the options will vest on the first anniversary of the date of grant and the remaining 75% of the options will vest in equal monthly installments over the next three years.  The options will be subject to the terms and conditions of the Company’s 2000 Stock Incentive Compensation Plan and standard form of stock option agreement, copies of which will be provided to you.

Along with cash compensation and stock options, you will be eligible for all Allos benefits upon commencement of employment.  While benefit programs may change from time to time, our current benefit plans include Life, Accidental Death and Dismemberment, Long Term Disability, Medical, Vision and Dental Insurance.  Allos offers a standard 401(k) retirement savings plan and a 125 tax-free reimbursement plan.  You will be eligible for the elective 401(k) plan upon commencement of employment.  Allos matches 50% of your 401(k) contributions up to a maximum annual match of $5,000.  Allos does not offer a pension or profit sharing plan.  Subject to Allos’ vacation policy, you will accrue vacation on a monthly basis at an annual rate of three weeks.

1

It is understood and agreed that you will commute between your residence and the Company’s facilities (wherever located) for work as and when directed by the Company’s Chief Executive Officer or as otherwise required to perform your duties, and your expenses incurred while traveling between your residence and the Company’s facilities will be reimbursed to you as business expenses until such date as the Company requests you to relocate your residence within a reasonable distance of the Company’s corporate headquarters (wherever located) (the “Relocation Request”).  It is anticipated that you will commute for the first six (6) to nine (9) months of employment.

Commencing upon the date of the Company’s Relocation Request, the Company will reimburse you up to a maximum of $125,000 for the following relocation costs: (a) customary closing costs incurred by you in connection with the sale of your current residence in California, including brokerage commissions and reasonable attorneys’ fees, (b) customary closing costs incurred by you in connection with the purchase of a new residence within a reasonable distance of the Company’s corporate headquarters (wherever located), (c) customary and reasonable costs of moving you and your family, including personal effects, to your new residence within a reasonable distance of the Company’s corporate headquarters (wherever located); and (d) customary and reasonable commuting and temporary living expenses for you and your family for up to six months (collectively, the “Reimbursement Amount”), subject in all cases to the submission of properly documented receipts.  To the extent that the Reimbursement Amount is taxable as income to you, upon substantiation of the amount of income tax imposed on the Reimbursement Amount, the Company will pay you an amount equal to such tax (the “First Iteration Tax Payment”), provided that the Company will not “gross-up” or otherwise pay your tax on the First Iteration Tax Amount.  Notwithstanding the foregoing, if you fail to relocate your residence within a reasonable distance of the Company’s corporate headquarters within six months after the date of the Company’s Relocation Request, then you will reimburse the Company for all amounts previously paid to you under this paragraph and the immediately preceding paragraph and you will no longer be eligible to receive any payments under this paragraph or the immediately preceding paragraph.  The Company makes no representations regarding the proper tax treatment of Employee’s business expenses and relocation costs that are reimbursed under this paragraph and the immediately preceding paragraph and you are responsible for obtaining independent advice from your own personal tax advisor.

Upon joining Allos you will receive an Allos employee handbook and be expected to sign the Company’s standard form of confidentiality and inventions assignment agreement, a copy which is enclosed for your review.  It is the Company’s policy that its employees maintain confidential any confidential information that they may have received or had access to while working for previous employers.  In addition, it is the Company’s policy that its employees not bring to Allos any documents or property belonging to their previous employers.  Also, please advise us immediately if you are subject to any agreements with any previous employers or third parties (such as confidentiality agreements, non-solicitation agreements, non-competition agreements, etc.) that may limit or in any way impact your ability to perform your job responsibilities at Allos.

This employment offer letter is not intended to create or constitute an employment agreement or contract between you and Allos.  It is also important for you to understand that Colorado is an “at will” employment state.  This means that you will have the right to terminate your employment relationship with Allos at any time for any reason.  Similarly, Allos will have the right to terminate its employment relationship with you at any time for any lawful reason.  This employment offer letter sets forth the entire agreement and understanding of the parties hereto with regard to your employment by the Company and supersedes any and all prior agreements, arrangements and understandings, written or oral, pertaining to the subject matter hereof.

2

Bruce, we are very excited about having you join our team!  Please acknowledge your acceptance of our offer by returning a signed copy of this letter.

Sincerely,

/s/ Paul L. Berns

Paul L. Berns

President and Chief Executive Officer

I accept this offer of employment with Allos Therapeutics and plan to begin work on January 22, 2008.

Signature:	Date:
/s/ Bruce Bennett	January 22, 2008

3

EX-23.01

EXHIBIT 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-60430, 333-38696, 333-76804, 333-92232, 333-131697 and 333-134654) and in the Registration Statements on Form S-3 (Nos. 333-87858, 333-111306 and 333-143198) of Allos Therapeutics, Inc. of our report dated February 25, 2008 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Denver, Colorado

February 25, 2008

EX-31.01

EXHIBIT 31.01

CERTIFICATION

I, Paul L. Berns, certify that:

1.I have reviewed this annual report on Form 10-K of Allos Therapeutics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2008

/s/ Paul L. Berns

Paul L. Berns

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.02

EXHIBIT 31.02

CERTIFICATION

I, David C. Clark, certify that:

1.I have reviewed this annual report on Form 10-K of Allos Therapeutics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2008

/s/ David C. Clark

David C. Clark

Vice President, Finance

(Principal Financial and Accounting Officer)

EX-32.01

EXHIBIT 32.01

CERTIFICATION

Pursuant to the requirements set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Paul L. Berns, the President and Chief Executive Officer of Allos Therapeutics, Inc., and David C. Clark, the Vice President, Finance of Allos Therapeutics, Inc. (the “Company”), each hereby certifies that, to the best of his knowledge:

1.The Company’s Annual Report on Form 10-K for the period ended December 31, 2007, to which this Certification is attached as Exhibit 32.01 (the “Annual Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 27, 2008

/s/ Paul L. Berns

Paul L. Berns

President and Chief Executive Officer

(Principal Executive Officer)

/s/ David C. Clark

David C. Clark

Vice President, Finance

(Principal Financial and Accounting Officer)

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its Staff upon request.  This certification “accompanies” the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.