[Beginning of Cramer's verbatim comments for this segment...]

Jim:        This is Cancer Research Week on Mad Money. Everyday, we're taking a look at the companies that are doing the most to battle this terrible disease, and represent what I think are the best investment or speculation opportunities. Pharma and biotech names with great prospects...

We started with two big pharma stocks, Pfizer (PFE) and Bristol-Myers Squibb Co. (BMY*)... the latter I own for my charitable trust, ActionAlertsPlus.com... And, as the week has gone by, we said we'd be more speculative... progressively more speculative... That brought us to Celgene Corporation (CELG) on Tuesday, and then Immunogen Inc. (IMGN) yesterday.

Today, we're taking a look at another speculative biotech stock that's engaged in the fight against cancer.

It's Allos Therapeutics, Inc. (ALTH)...

This is a stock I recommended back on February 27th. It was at $5.64. It then went as high as $8.68 in September. Now the stock is all the way back... it's round-tripped... at $5.89, about 4% higher than it was when I originally said it was a buy. Remember, on all these speculations, you've got to like, take some profits when they ramp. I still think maybe this one could be an opportunity... we've got to do some work on it.

Allos has come down, even though everything we expected to come to pass actually happened. The company's main drug, Folotyn, which treats refractory peripheral T-cell lymphoma, was approved by the FDA on September 24th. It's an orphan drug... the first and only treatment in the U.S. approved for patients with this particular type of cancer. Allos plans to launch Folotyn commercially in January, but it's doing a trade launch to physicians at the American Society of Hematology meeting. That's taking place from December 5th to December 8th. The meeting can be a big catalyst for Allos since it's expected to have multiple Folotyn drug presentations, and the company's developing the drug for multiple indications. Remember, that is the jackpot when it comes to cancer research. Included in that is CTCL, that's a rare form of non-Hodgkin's lymphoma, and lung cancer, with additional data coming out later this year and in the first half of 2010.

Now, Allos just reported an in-line quarter on Tuesday... But what matters with these speculatives biotechs is clinical data and drug approvals, not quarters... at least until Allos launches its first drug in January. And, as far as the one big drug goes, I think it makes Allos Therapeutics a very cheap stock. Folotyn sales could reach $300 million in the U.S. And, even if it only turns out to be $150 million opportunity, it should still be worth about $5 a share to the stock. That's less than $1 below where it's trading right now.

Why has Allos' drug done so poorly since its big drug was approved by the FDA?...

Alright... The company did a secondary (stock offering) on October 7th, issuing more stock at $7.10... that really banged the stock. It's been all downhill since then. Given now that the company has $84 million in cash at the end of the quarter, I don't think we have to worry about another one of these, and now we have a chance to buy Allos for nearly 25% less than where it was trading before Folotyn was approved. It seems interesting, right?...

As the company actually starts selling the drug, I think its stock should go higher. But since this is speculative, I want to do some more homework... I want to talk to Paul Berns. He's the CEO of Allos Therapeutics, Inc. (ALTH)...

Jim:    Mr. Berns, welcome to Mad Money...

Berns:    Oh hi Jim, thank you.

Jim:    Mr. Berns, I'm trying to gauge... always put myself in the head of our viewers, okay... The viewers hear that there's this American Society of Hematology conference coming up, and I think they're saying, well why could that impact a stock?... It's just some conference of doctors... Can you explain what goes on there, and what you might be presenting, so that people know it's not just some... you know, so that people know it's not just me saying it's an important meeting.

Berns:    Sure. Thank you, Jim. Well, the American Society of Hematology is the largest international medical conference for hematologist and oncologist in the world. And what you typically find... this is a peer-reviewed setting, by the way... and what that means is that you typically find many high-grade science and clinical development research that is reviewed at this setting, with the world's leading thought leaders as well as community-based physicians that treat patients in various hematologic cancers. And so this becomes a very important meeting for companies like our that have made strategic investments in developing their therapies to treat these various hematologic patient populations.

As you mentioned, we most recently received approval for Folotyn for the treatment of relapsed refractory periphery T-cell lymphoma, and it's the first drug in the world to be approved for that, and in the United States in particular. So this represents an important opportunity for companies to bring forward with the utility and thoughtfulness of key opinion leaders that do this research, and share this data, as you mentioned, with other physicians, and help them understand how to maximize the utility of these drugs.

Jim:    Well let's talk about the drug for a second. It could be available for commercial sales soon. But I don't see you having a big partner. Now I always find it reassuring to have a big pharmaceutical partner. You're willing to go it alone. Isn't that risky?

Berns:    You know, I don't think so. I think, independent of size, we've certainly seen... you can point to examples where companies have been very effective in commercializing their own assets, as predicated frankly on the breadth and depth of the organizational talent and skill base that you put together. We have a very experienced group of business leaders, both on the clinical development side, as well as the commercial side of this business. And we are very capable, as our past track records have demonstrated, of developing and commercializing this drug for ourselves in the United States and building shareholder value for our company.

Jim:    There are some people - the critics of your company - who tell me, Jim, don't feature ALTH. It is a one-product wonder. What do you say to those critics?

Berns:    I say that you need to take a look... In every of these opportunities are case-specific... Folotyn, for example, is a product within a pipeline of development opportunities. So said in another way, we have multiple cancer patient populations that we are investing in beyond just a peripheral T-cell lymphoma indication that we've just recently received. So Folotyn represents multiple indications and multiple cancer populations as one therapeutic asset.

Jim:    Now, are there people all over the country taking this drug in some right now in tests? Is that what goes on?

Berns:    So, yeah... so what's happening Jim... On the heels of the approval on September 24th... we were prepared, and moved very quickly, to actually distribute Folotyn as a brand through the commercial distribution systems in the United States to get Folotyn to practicing physicians that treat relapsed refractory peripheral T-cell lymphoma. That's the first indication. Beyond that, we have parallel development programs, as you mentioned, in other hematologic malignancies such as cutaneous T-cell lymphoma, B-cell, non-Hodgkin's lymphoma, and solid tumors, both lung cancer and bladder cancer, ongoing, given the prior historical activity that we've observed with Folotyn. So Folotyn truly is this pipeline within a compound.

Jim:    Now, I hear all these, and I know that they take time and they cost money. You raised money not that long ago. If you stretch things out, at what pace are you burning money, so we know if there has to be another deal, or we should just think that the deals are done, you have enough cash to get through all these test, and we could be in good shape financially?

Berns:    So I think, as you reported accurately, we had our 3rd quarter conference call with the investment on Tuesday, where we ended the 3rd quarter with $84 million in cash and liquid investments. We raised approximately $93 million in the first week of October, net of fees, which gives us a very strong cash position, on a Pro Forma basis, of approximately $177 million. We're in a very good position. We're also an interesting company, Jim, in that we are now selling Folotyn and building revenues, and we expect to build revenues quarter over quarter as we penetrate this PTCL market, as we just discussed. So we're not in a position to guide for future years at this point, but we feel we're in a strong cash position to see ourselves through a period of time, clearly.

Jim:    Mr. Berns, you have a good story. I'm surprised the stock's back at $5. I think it's a great opportunity. Thank you so much for coming on the show sir.

Berns:    Thank you, Jim.

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Jim's comments AFTER the interview:     Again, I talked to you when I was in Oklahoma... People said, give me some 5,6, $7 stock that could be huge. They don't talk about the downside as much, but let me just tell you... this is the kind of stock that could be huge. It's not an investment, it's a speculation, because it doesn't have a big salesforce, and big other products... but you know what?... I can't believe the stock's at $5. It's too cheap. I'd buy some.

[verbatim recap]

[end of segment]

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