ALASA (Airborne Launch Assist Space Access) program was innovative concept of injecting small satellites into orbit with cost under $1 million with launch vehicle similar to antisatellite missile carried by F15E fighter. Unfortunately "is" suddenly became "was".
DARPA announced on their website about suspending ALASA program. According to official statement:
"As of November 2015, DARPA had conducted four subscale static tests of the propulsion system on test stands. These tests were anomalous and pointed to the need for additional tests as part of refining the engine design and assessing the viability of the mix for use as a safe monopropellant.
DARPA believes that understanding how to use NA7 monopropellant safely could open up groundbreaking capabilities across diverse space- and non-space-related fields. To accelerate progress towards this goal, DARPA in November 2015 ceased development of the ALASA launch vehicle technology demonstrator and is focusing on monopropellant safety testing and certification."
This fragment is referring to innovative monopropellant consisting acetylene and nitrous oxide; it basically means that rocket could be designed without need of separate tanks. Boeing design was officially accepted in 2014 (You can read whole ALASA history here) and it seems that is not meeting DARPA demands after one year of further development. Monopropellant is going to be developed in future. Main reason of decision of developing ALASA was innovative fueling system and now it seems that it will bury whole project. Fact that whole concept of vehicle was generally correct will not probably change it.
DARPA is considering commercial sector as source of new, less expensive and more flexible launch system:
"Moreover, recognizing that the commercial sector has made significant strides in low-cost, flexible access to space in the past few years, DARPA is reassessing the emerging capabilities of commercial small-satellite launch providers. The Agency will consider opportunities to partner with providers seeking appropriate payloads for rapid, affordable access to space."
It is naturally that military is cooperating commercial industry. It is strange because such solutions were ready in nineties for example Pegasus rocket (described here), but military was not interested in adopting it to their purposes. We are only possessing hope that DARPA is not counting on ULA free-of-charge (appropriate post here) Cubesat program...
It is sad that ambition project, which could be really new quality in launching small satellites, was put into shelf without particular good reason. Problems with propulsion with such innovative fuel should not surprise. Hopefully further development of monopropellant and possible giving access to the results of researches to other companies will eventually result in more interesting (for DARPA) concepts of affordable launch system.