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On Friday, TD Cowen maintained a Hold rating on shares of Allakos Inc . (NASDAQ: NASDAQ:ALLK) following the release of new clinical trial data. The company shared results from a subcutaneous (s.c.) healthy volunteer cohort of the Phase I trial for AK006, an anti-siglec6 antibody under investigation.
The data indicated that the subcutaneous formulation of AK006 was well tolerated by participants and that its receptor occupancy profile was comparable to the intravenous (IV) formulation. This similarity suggests the potential for an infrequent dosing schedule, which could be beneficial for patient compliance and convenience.
Allakos has also updated the timeline for proof of concept (POC) data for the intravenous AK006 in chronic spontaneous urticaria (CSU) patients. The new expectation is to have these results early in the first quarter of the upcoming year, a shift from the previous year-end expectation.
The delay in the POC data release and the new trial results have led to the reaffirmation of the Hold rating on Allakos shares. The forthcoming data in early Q1 is anticipated to provide further insights into AK006's efficacy and safety profile, which are critical for evaluating the drug's potential in treating CSU.
The Hold rating reflects a wait-and-see approach pending the release of additional data that could influence the understanding and valuation of Allakos' investigational treatment.
In other recent news, Allakos Inc. has reported positive results from its Phase 1 study of AK006, a drug developed for treating mast cell-driven diseases. The study showed that the drug has about 77% bioavailability and an estimated half-life of 12-22 days, with a 720 mg dose achieving 98% receptor occupancy at day 113. Analyst firms Piper Sandler, TD Cowen, and JMP Securities have maintained their Overweight, Hold, and Market Outperform ratings respectively for Allakos, following these promising results.
The company has also announced a potential delisting risk from the Nasdaq Global Select Market due to non-compliance with the minimum bid price requirement, but has been granted a 180-day period to regain compliance. In terms of finances, Allakos reported a net loss of $71 million in the first quarter of 2024, primarily due to a non-cash impairment charge, but maintains $139 million in cash reserves, projected to sustain operations until mid-2026.
InvestingPro Insights
Recent InvestingPro data provides additional context to Allakos Inc.'s (NASDAQ: ALLK) current financial situation, which may be relevant to investors considering the company's clinical trial developments. As of the last twelve months ending Q2 2024, Allakos reported an adjusted operating income of -$187.55 million, reflecting the significant ongoing investment in research and development typical of biotech firms in the clinical trial phase.
InvestingPro Tips highlight that Allakos is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the company's focus on advancing its pipeline, including AK006. The tip noting that "analysts do not anticipate the company will be profitable this year" underscores the importance of the upcoming proof of concept data for AK006 in chronic spontaneous urticaria patients.
It's worth noting that despite these financial challenges, Allakos "holds more cash than debt on its balance sheet," which could provide some financial flexibility as it progresses its clinical trials. For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insights into Allakos's financial health and market position.
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