Zinger Key Points
- Allakos Inc. to discontinue AK006 development for CSU after phase 1 trial showed no clinical benefit despite favorable safety results.
- Restructuring includes a 75% workforce reduction and estimated costs of $34M-$38M, with $35M-$40M cash projected by June 2025.
- Every week, our Whisper Index uncovers five overlooked stocks with big breakout potential. Get the latest picks today before they gain traction.
On Monday, Allakos Inc (NASDAQ: ALLK) revealed topline results from its phase 1 clinical trial of AK006 in chronic spontaneous urticaria (CSU), a skin disorder.
“While AK006 was well tolerated, we are disappointed that the preclinical inhibitory effects observed did not translate to clinical benefit in patients with CSU. As a result, the company has decided to discontinue further clinical development of AK006,” said Chin Lee, Chief Medical Officer of Allakos.
In the CSU cohort, 34 adult patients refractory to antihistamines with or without prior exposure to omalizumab were enrolled and randomized 2:1 to receive 720 mg of intravenous AK006 (n=23) or placebo (n=11) once every four weeks (Q4W).
AK006 was well-tolerated with a favorable safety profile. There were no serious adverse events (SAEs) in subjects on AK006.
The company plans to discontinue AK006-related activities across clinical, manufacturing, research, and administrative functions and reduce its workforce by approximately 75%.
The company plans to retain approximately 15 employees to explore strategic alternatives, maintain compliance with regulatory and financial reporting requirements, and wind down the phase 1 clinical trial.
In October, Allakos released results from the Phase 1 study of subcutaneous AK006 in healthy volunteers. Subcutaneously administered AK006 showed approximately 77% bioavailability and prolonged receptor occupancy on mast cells and was well-tolerated with a favorable safety profile.
Allakos ended the fourth quarter of 2024 with approximately $81 million in cash, cash equivalents, and investments. The company estimates that cash used in restructuring activities to close out AK006 development, including severance and contractual payments to vendors, will be approximately $34 million to $38 million.
The company also estimates that most of these restructuring costs will be paid over the first and second quarters of 2025.
Allakos estimates that as of June 30, 2025, it will have cash, cash equivalents, and investments of approximately $35 million to $40 million.
Price Action: ALLK stock is down 78.5% at $0.26 at last check Monday.
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