Allakos agrees to Concentra Biosciences acquisition

SAN CARLOS, Calif. - Allakos Inc. (NASDAQ:ALLK), a biotechnology firm focused on developing antibodies to treat allergic and inflammatory diseases, has announced a definitive merger agreement with Concentra Biosciences, LLC. Under the terms of the agreement, Concentra will acquire Allakos for $0.33 per share in cash, representing a 50% premium to the current stock price of $0.22. The offer comes as Allakos shares have declined 82.5% over the past year, trading near their 52-week low. According to InvestingPro analysis, the stock has been showing signs of oversold conditions.

The Board of Directors of Allakos has unanimously approved the transaction, deeming it in the best interests of Allakos shareholders. A tender offer is set to commence by April 15, 2025, to acquire all outstanding Allakos common stock, with the merger expected to finalize in May 2025. The offer price falls within the current analyst target range of $0.30 to $0.40 per share. InvestingPro data reveals that while the company maintains a strong current ratio of 4.81, it has been rapidly burning through its cash reserves.

Allakos shareholders holding approximately 8.07% of the common stock have committed to tendering their shares and supporting the merger through signed support agreements. The completion of the tender offer is contingent upon several conditions, including a majority of the outstanding shares being tendered, the availability of at least $35.5 million in cash at closing (net of costs and liabilities), and other customary closing conditions.

Wilson Sonsini Goodrich & Rosati and Gibson, Dunn & Crutcher LLP are serving as legal counsel to Allakos and Concentra, respectively.

The proposed merger is subject to risks and uncertainties, including the possibility that closing conditions may not be met and that competing offers could emerge. Allakos cautions investors not to place undue reliance on forward-looking statements related to the merger’s anticipated benefits and timing. For comprehensive analysis of Allakos’s financial health and 16 additional key ProTips, investors can access the detailed research report available on InvestingPro.

This news is based on a press release statement from Allakos Inc.

In other recent news, Allakos Inc. announced it will cease the development of its AK006 drug following disappointing results from a phase 1 clinical trial for chronic spontaneous urticaria (CSU). The trial showed that AK006 did not provide the expected therapeutic benefits, leading to a decision to discontinue its development and reduce the workforce by approximately 75%. The company is now exploring strategic alternatives and plans to focus on managing its resources carefully. Financially, Allakos ended the fourth quarter of 2024 with around $81 million in cash and expects restructuring costs between $34 million and $38 million, which will impact its cash reserves. Jefferies has reacted to these developments by lowering its price target for Allakos shares to $0.40, although it maintained a "Hold" rating. The firm cited the lack of clinical evidence supporting the drug’s efficacy as a factor in its reassessment. Additionally, Allakos faces potential Nasdaq delisting due to its stock trading below the required $1.00 minimum bid price for 30 consecutive days. The company has been granted a 180-day period to regain compliance with Nasdaq’s listing standards.

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