Allakos (ALLK) Q2 2024 earnings summary

Executive summary

• Focused on developing AK006, a mast cell-targeting antibody, with positive Phase 1 results in healthy volunteers and ongoing trials in chronic spontaneous urticaria (CSU); lirentelimab development halted in January 2024, leading to a 50% workforce reduction and a reorganization plan to align with new clinical priorities.

• Initiated Phase 1 trial of IV AK006 in CSU and completed dosing in SC AK006 cohort in healthy volunteers; reported safety, PK, and PD results from IV AK006 Phase 1 trial and presented preclinical data at EAACI Congress.

• No revenue generated; operations funded primarily through equity offerings; accumulated deficit reached $1,216.3 million as of June 30, 2024.

Financial highlights

• Net loss for Q2 2024 was $26.7 million, down from $35.1 million in Q2 2023; net loss for the six months ended June 30, 2024 was $97.8 million, up from $77.5 million in the prior year period.

• Research and development expenses decreased to $19.4 million in Q2 2024 from $27.3 million in Q2 2023, reflecting lower costs after halting lirentelimab.

• General and administrative expenses fell to $9.2 million in Q2 2024 from $10.5 million in Q2 2023.

• Cash, cash equivalents, and investments totaled $123.1 million as of June 30, 2024, a decrease of $16.2 million from the previous quarter.

• Recorded a $27.3 million noncash impairment charge on long-lived assets in the first half of 2024.

Outlook and guidance

• Current cash and investments expected to fund operations for at least the next 12 months, with runway into mid-2026; expects to end 2024 with $81–86 million in cash, cash equivalents, and investments.

• Data from the CSU cohort of the AK006 Phase 1 trial expected by year-end 2024; subcutaneous AK006 data expected in Q3 2024.

• Expenses anticipated to decrease in the second half of 2024 due to the reorganization and reduced lirentelimab activity; expects $30 million in closeout, severance, and other costs in 2024, with $13 million spent in H1 2024.