Allakos Provides Business Update and Reports First Quarter 2024 Financial Results
Allakos Inc. provided a business update and reported financial results for the first quarter of 2024. The company completed dosing in various trials for its AK006 drug, published preclinical research, and presented data at a major conference. Upcoming milestones include reporting trial results and financial outlook remains stable. Allakos ended the quarter with $139.3 million in cash, showing a net decrease of $31.5 million. The company reported increased R&D expenses due to manufacturing costs and a non-cash impairment charge, resulting in a net loss of $71.1 million.
Allakos completed dosing in multiple trials for AK006 and published preclinical research, demonstrating progress in drug development.
The company presented data at a prestigious conference, showcasing the drug's mechanism of action and potential benefits.
Allakos reaffirmed its financial outlook and estimated cash runway, providing stability and confidence to investors.
Allakos reported a net loss of $71.1 million in the first quarter of 2024, a significant increase from the previous year.
The company recognized a non-cash impairment charge due to market capitalization decline and halting of a development program, impacting financials.
Research and development expenses increased, primarily driven by manufacturing costs, leading to a higher net loss for the quarter.
Insights
Upon reviewing the reported financials, Allakos Inc. experienced a net decrease in cash, cash equivalents and investments of
The non-cash impairment charge of
The progress in the development of AK006 is important and indicates a commitment to addressing allergic, inflammatory and proliferative diseases. The transition from preclinical studies to early-stage human trials is a significant milestone for any biotech company. However, the clear impact of halting the lirentelimab program is evident, not only financially but also in potential gaps in the company's pipeline. As AK006 progresses, it may offer the company a strategic path forward, but this will depend on clinical trial results and may not mitigate the immediate impact of the discontinued program.
For retail investors, the key point of interest is the topline data from the AK006 trial being reported at the year-end, which will be telling of the company’s future prospects. The drug's ability to control mast cell function could represent a significant advance, but only if clinical results align with preclinical predictions.
The investor sentiment may be influenced by the multiple milestones Allakos anticipates in the coming quarters, including the reporting of safety, PK and PD results. These milestones are typical triggers for volatility in biotech stocks, as they offer insights into a drug candidate’s potential. Though, without positive findings, the benefits cannot be realized and the stakes for Allakos are high given the recent program cancellation.
It’s imperative for investors to balance the ongoing trial advancements with the restructuring costs and the impairment charge to get a true sense of the company’s trajectory. Long-term investors typically look for sustainable growth and pipeline diversification, areas where Allakos currently seems to be challenged.
SAN CARLOS, Calif., May 09, 2024 (GLOBE NEWSWIRE) -- Allakos Inc. (the “Company”) (Nasdaq: ALLK), a biotechnology company developing antibodies for the treatment of allergic, inflammatory and proliferative diseases, today provided a business update and reported financial results for the first quarter ended March 31, 2024.
Recent Allakos Events
- Completed dosing in the single ascending dose (SAD) cohorts and multiple ascending dose (MAD) cohorts of the randomized, double-blind, placebo-controlled Phase 1 trial of Intravenous (IV) AK006 in healthy volunteers.
- Completed dosing in the randomized, double-blind, placebo-controlled subcutaneous (SC) AK006 cohort in healthy volunteers.
- Initiated the randomized, double-blind, placebo-controlled Phase 1 trial of IV AK006 in patients with chronic spontaneous urticaria.
- Published preclinical research in Allergy showing that AK006 controls mast cell function through interaction with multiple activating receptors and key signaling pathways.
- Presented preclinical data at the American Academy of Allergy, Asthma & Immunology (AAAAI) Annual Meeting 2024 highlighting AK006’s mechanism of action and ability to reduce MRGPRX2-induced skin inflammation.
Upcoming Allakos Anticipated Milestones
- Report safety, pharmacokinetics (PK), and pharmacodynamic (PD) results from the Phase 1 trial of IV AK006 in healthy volunteers, including data to confirm Siglec-6 receptor occupancy in skin biopsy samples in Q2 2024.
- Report safety, PK, and PD results from the Phase 1 trial of SC AK006 in healthy volunteers, including data to confirm Siglec-6 receptor occupancy in skin biopsy samples in Q3 2024.
- Report topline data from the Phase 1 trial of IV AK006 in patients with CSU at year end 2024.
Cash Guidance
Allakos’ financial outlook, restructuring activities and estimated cash runway as reported by the Company in January 2024 remain unchanged. The Company reiterates that the restructuring activities will extend the cash runway into mid-2026 and continues to expect to end 2024 with total cash, cash equivalents and investments in the range of
First Quarter 2024 Financial Results
Allakos ended the first quarter of 2024 with
Research and development expenses were
General and administrative expenses were
In the first quarter of 2024, Allakos recognized a non-cash impairment charge following the significant sustained decline observed in the Company’s market capitalization and halting of the lirentelimab development program. The non-cash charge totaled
Allakos reported a net loss of
About Allakos
Allakos is a clinical stage biotechnology company developing therapeutics that target immunomodulatory receptors present on immune effector cells involved in allergy, inflammatory and proliferative diseases. Activating these immunomodulatory receptors allows for the direct targeting of cells involved in disease pathogenesis and, in the setting of allergy and inflammation, has the potential to result in broad inhibition of inflammatory cells. The Company’s most advanced product candidate is AK006. AK006 targets Siglec-6, an inhibitory receptor expressed on mast cells. Mast cells are widely distributed in the body and play a central role in the inflammatory response. Inappropriately activated mast cells have been identified as key drivers in a number of severe diseases affecting the gastrointestinal tract, eyes, skin, lungs and other organs. In preclinical studies, AK006 appears to provide deep mast cell inhibition and, in addition to its inhibitory activity, reduce mast cell numbers. For more information, please visit the Company’s website at www.allakos.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, Allakos’ expected timing of reporting data from its clinical trial of AK006; cash guidance and runway; and restructuring. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from current expectations and beliefs, including but not limited to: Allakos’ stages of clinical drug development; Allakos’ ability to timely initiate and complete clinical trials for AK006; Allakos’ ability to obtain required regulatory approvals for its clinical trials; uncertainties related to the enrollment of patients in its clinical trials; Allakos’ ability to demonstrate sufficient safety and efficacy of its product candidates in its clinical trials; uncertainties related to the success of clinical trials, regardless of the outcomes of preclinical testing or early-stage trials; Allakos’ ability to obtain regulatory approvals to market its product candidates; market acceptance of Allakos’ product candidates; uncertainties related to the projections of the size of patient populations suffering from the diseases Allakos is targeting; Allakos’ ability to advance additional product candidates beyond AK006; uncertainties related to Allakos’ ability to realize the contemplated benefits of its restructuring and related reduction in force; Allakos’ ability to accurately forecast financial results; Allakos’ ability to obtain additional capital to finance its operations, research and drug development; general economic and market conditions, both domestic and international; domestic and international regulatory obligations; and other risks. Information regarding the foregoing and additional risks may be found in the section entitled “Risk Factors” in documents that Allakos files from time to time to with the SEC. These documents contain and identify important factors that could cause the actual results for Allakos to differ materially from those contained in Allakos’ forward-looking statements. Any forward-looking statements contained in this press release speak only as of the date hereof, and Allakos specifically disclaims any obligation to update any forward-looking statement, except as required by law. These forward-looking statements should not be relied upon as representing Allakos’ views as of any date subsequent to the date of this press release.
Source: Allakos Inc.
Investor Contact:
Adam Tomasi, President
Alex Schwartz, VP Strategic Finance and Investor Relations
ir@allakos.com
Media Contact:
Denise Powell
denise@redhousecomms.com
| ALLAKOS INC. UNAUDITED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating expenses | ||||||||
| Research and development | $ | 34,824 | $ | 33,078 | ||||
| General and administrative | 10,898 | 11,968 | ||||||
| Impairment of long-lived assets | 27,347 | — | ||||||
| Total operating expenses | 73,069 | 45,046 | ||||||
| Loss from operations | (73,069 | ) | (45,046 | ) | ||||
| Interest income | 1,995 | 2,678 | ||||||
| Other expense, net | (72 | ) | (36 | ) | ||||
| Net loss | (71,146 | ) | (42,404 | ) | ||||
| Unrealized gain (loss) on investments | (30 | ) | 296 | |||||
| Comprehensive loss | $ | (71,176 | ) | $ | (42,108 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.81 | ) | $ | (0.49 | ) | ||
| Weighted-average number of common shares outstanding: | ||||||||
| Basic and diluted | 88,042 | 85,845 | ||||||
| ALLAKOS INC. UNAUDITED CONDENSED BALANCE SHEETS (in thousands) | ||||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 43,060 | $ | 66,440 | ||||
| Investments | 96,192 | 104,354 | ||||||
| Prepaid expenses and other current assets | 8,382 | 9,095 | ||||||
| Total current assets | 147,634 | 179,889 | ||||||
| Property and equipment, net | 17,364 | 33,369 | ||||||
| Operating lease right-of-use assets | 10,577 | 24,136 | ||||||
| Other long-term assets | 1,737 | 6,216 | ||||||
| Total assets | $ | 177,312 | $ | 243,610 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 15,748 | $ | 1,764 | ||||
| Accrued expenses and other current liabilities | 20,173 | 34,814 | ||||||
| Total current liabilities | 35,921 | 36,578 | ||||||
| Operating lease liabilities, net of current portion | 37,408 | 38,215 | ||||||
| Total liabilities | 73,329 | 74,793 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 89 | 88 | ||||||
| Additional paid-in capital | 1,293,497 | 1,287,156 | ||||||
| Accumulated other comprehensive gain (loss) | 20 | 50 | ||||||
| Accumulated deficit | (1,189,623 | ) | (1,118,477 | ) | ||||
| Total stockholders’ equity | 103,983 | 168,817 | ||||||
| Total liabilities and stockholders’ equity | $ | 177,312 | $ | 243,610 | ||||
FAQ
What trials did Allakos complete for its AK006 drug?
What upcoming milestones are expected from Allakos?
What was Allakos' net loss in the first quarter of 2024?
