Allakos crashes on restructuring plans

Baris Ozer Allakos ( NASDAQ: ALLK ) shares fell ~61% premarket Tuesday after the antibody therapeutics company announced plans to reduce its headcount by approximately 50% as it reevaluates the pipeline to extend the cash runway. As part of the restructuring initiative, the San Carlos, California based biotech will focus on its Siglec 6 targeting IgG1 monoclonal antibody AK006 and certain other preclinical programs.

However, Allakos ( ALLK ) will terminate its activities on its lead candidate, lirentelimab, a monoclonal antibody targeting Siglec 8. “As a result, the Company will reduce its workforce by approximately 50%,” the company said, adding that it expects to incur most of the restructuring expenses in H1 2024.

AK006 is currently in Phase 1 trials for healthy volunteers, with data expected this year. In Q2 2024, the company plans to begin a Phase 1 trial for intravenous AK006 in patients with chronic spontaneous urticaria. Citing unaudited data, Allakos ( ALLK ) said its cash, cash equivalents, and investments reached $171M as of the end of last year and projected the figure to reach $81M – $86M by the end of 2024.

The restructuring initiative is expected to extend its cash runway into mid 2026. More on Allakos Seeking Alpha’s Quant Rating on Allakos Historical earnings data for Allakos Financial information for Allakos.