Allakos Provides Business Update and Reports First Quarter 2022 Financial Results


Allakos Inc.

REDWOOD CITY, Calif., May 06, 2022 (GLOBE NEWSWIRE) — Allakos Inc. (the “Company”) (Nasdaq: ALLK), a biotechnology company developing lirentelimab (AK002) and AK006 for the treatment of allergic and inflammatory diseases, today provided a business update and announced financial results for the first quarter ended March 31, 2022.

Recent Events

  • Launch of a randomized, double-blind, placebo-controlled Phase 2 study of subcutaneous lirentelimab in patients with moderate to severe atopic dermatitis in the fourth quarter of 2021.

  • Organization of an investor day on February 15, 2022 to present the results and lessons learned from the ENIGMA 2 and KRYPTOS studies as well as the next steps in the development program for lirentelimab and AK006. Additionally, we announced a restructuring plan with expected charges associated with exiting certain contractual obligations and reducing our workforce.

Upcoming milestones

  • Hold a post-Phase 2 meeting with the FDA in the second quarter of 2022 to discuss KRYPTOS Phase 2/3 data and the development pathway for subcutaneous lrentelimab in patients with eosinophilic esophagitis (EoE ).

  • Initiate a randomized, double-blind, placebo-controlled Phase 2b study of subcutaneous lrentelimab in patients with chronic spontaneous urticaria in mid-2022.

  • To present key data from the EoDyssey Phase 3 study of lirentelimab in patients with eosinophilic duodenitis (EoD) in the third quarter of 2022.

  • Complete the IND-Enabling studies of AK006 in 2022 and initiate the first-in-human study in the first half of 2023.

First quarter 2022 financial results

Research and development expenses were $176.8 million in the first quarter of 2022, compared to $38.9 million in the first quarter of 2021. Research and development expenses in the first quarter of 2022 included $135.1 million settlement costs to exit from future manufacturing obligations and related to severance and employee retention agreements in connection with our reorganization plan. Research and development expenses for the first quarter of 2022 also include non-cash expenses for stock-based compensation of $4.4 million, compared to $5.1 million for the same period of 2021, and amortization $0.2 million, compared to $0.3 million for the same period of 2021. 2021.

General and administrative expenses were $18.8 million in the first quarter of 2022 compared to $16.7 million in the first quarter of 2021. General and administrative expenses for the first quarter of 2022 include $4.3 million dollars of costs related to severance and retention agreements as part of our reorganization plan. General and administrative expenses also include non-cash expenses for stock-based compensation of $7.0 million, compared to $7.3 million in the same period of 2021, and amortization of $1.9 million. dollars, compared to $0.1 million in the same period of 2021.

Allakos reported a net loss of $197.0 million in the first quarter of 2022, compared to $55.6 million in the same period of 2022. As reported on our Investor Day on February 15, 2022, we expect to incur approximately $150 million in settlement costs to exit future manufacturing. and other contractual obligations with suppliers, as well as employee severance and retention agreements. During the first quarter of 2022, we incurred $139.4 million in total of these expenses, as described above in the research development and general and administrative expense sections. We anticipate that approximately $5 million of the remaining estimated expenditures will be primarily classified as research and development expenses and will be incurred during the second and third quarters of 2022, with the remainder being incurred thereafter. Basic and diluted net loss per share was $3.60 for the first quarter of 2022, compared to $1.04 for the same period in 2021.

Allakos ended the first quarter of 2022 with $246.7 million in cash, cash equivalents and marketable securities.

About Allakos

Allakos is a clinical-stage biotechnology company developing therapeutics targeting immunomodulatory receptors present on immune effector cells implicated in allergic, inflammatory and proliferative diseases. Activation of these immunomodulatory receptors allows us to directly target cells involved in disease pathogenesis and, in the setting of allergy and inflammation, has the potential to lead to broad inhibition of inflammatory cells. The Company’s most advanced antibodies are lirentelimab (AK002) and AK006. Lirentelimab selectively targets both mast cells and eosinophils, two types of white blood cells that are widely distributed in the body and play a central role in the inflammatory response. Inappropriately activated mast cells and eosinophils have been identified as key factors in a number of serious diseases affecting the gastrointestinal tract, eyes, skin, lungs and other organs. We are developing lirentelimab for the treatment of eosinophilic esophagitis, eosinophilic gastritis, eosinophilic duodenitis, atopic dermatitis, chronic spontaneous urticaria and potentially other indications. Lirentelimab has received orphan disease status for EG, EoD and EoE from the United States Food and Drug Administration (the “FDA”). AK006 targets Siglec-6, an inhibitory receptor selectively expressed on mast cells. AK006 appears to provide more profound mast cell inhibition than lirentelimab and, in addition to its inhibitory activity, reduces mast cell count. We plan to begin human studies with AK006 in the first half of 2023. For more information, please visit the company’s website at www.allakos.com.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, Allakos’ progress and business plans, the expected timing of anticipated study results, and plans relating to its future clinical trials. These statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from current expectations and beliefs, including, but not limited to: the stages of clinical development of the Allakos medicines; Allakos’ ability to timely complete clinical trials for, and if approved, commercialize lirentelimab (AK002), its lead compound; Allakos’ ability to obtain required regulatory approvals for its product candidates; uncertainties related to the recruitment of patients in its clinical trials; Allakos’ ability to demonstrate sufficient safety and efficacy of its product candidates in its clinical trials; uncertainties related to the success of later-stage clinical trials, regardless of the results of preclinical testing and early-stage trials; market acceptance of Allakos’ product candidates; uncertainties related to projections of the size of patient populations suffering from the diseases targeted by Allakos; Allakos’ ability to advance additional product candidates beyond lirentelimab; Allakos’ ability to obtain additional capital to fund its operations; and other material risk factors set forth in Allakos’ most recent Annual Report on Form 10-K filed with the SEC on March 1, 2022 and in future reports to be filed with the SEC. These materials contain and identify important factors that could cause Allakos’ actual results to differ materially from those contained in Allakos’ forward-looking statements. All forward-looking statements contained in this press release speak only as of the date hereof, and Allakos specifically disclaims any obligation to update any forward-looking statement, except as required by law. These forward-looking statements should not be taken to represent the views of Allakos as of any date subsequent to the date of this press release.

Source: Allakos Inc.

Investor contacts:
Adam Tomasi, President and Chief Operating Officer
Alex Schwartz, Vice President of Strategic Finance and Investor Relations
[email protected]

Media Contact:
Denise Powell
[email protected]

ALLAKOS INC.
UNAUDITED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)

Three months completed

March, 31st,

2022

2021

Operating Expenses

Research and development

$

176,807

$

38,915

general and administrative

18,844

16,670

Total operating expenses

195,651

55,585

Operating loss

(195,651

)

(55,585

)

interest income

83

130

Other expenses, net

(1,455

)

(103

)

Net loss

(197,023

)

(55,558

)

Unrealized appreciation (depreciation) on tradable assets
securities

(316

)

80

Overall loss

$

(197,339

)

$

(55,478

)

Net loss per common share:

Basic and diluted

$

(3.60

)

$

(1.04

)

Weighted average number of municipalities
outstanding shares:

Basic and diluted

54,686

53,186

ALLAKOS INC.
CONDENSED UNAUDITED BALANCE SHEET
(in thousands)

March, 31st,

The 31st of December,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

36,294

$

152,822

Investments in marketable securities

210 407

271,416

Prepaid expenses and other current assets

11,466

27,343

Total current assets

258 167

451 581

Property and equipment, net

43,933

43,100

Operating lease right-of-use assets

31,294

31,707

Other long-term assets

12,389

8,436

Total assets

$

345,783

$

534 824

Liabilities and equity

Current liabilities:

Accounts payable

$

9,128

$

13,692

Accrued expenses and other current liabilities

28,424

26,557

Total current liabilities

37,552

40,249

Operating lease debt, net of the current portion

48,355

49,099

Total responsibilities

85,907

89,348

Equity:

Ordinary actions

54

54

Premium

1,070,138

1,058,399

Accumulated other comprehensive income

(469

)

(153

)

Accumulated deficit

(809 847

)

(612,824

)

Full shareholder equity

259,876

445 476

Total Liabilities and Equity

$

345,783

$

534 824

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