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Allakos Provides Business Update and Reports Fourth Quarter 2024 Financial Results

1. Allakos reported restructuring and discontinuation of AK006 development. 2. Q4 2024 cash ended at $80.8 million, down $11.9 million. 3. R&D expenses dropped significantly to $14.8 million from $53.8 million. 4. The company posted a net income of $0.4 million versus a loss last year. 5. Restructuring costs for AK006 are estimated between $34 million and $38 million.

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FAQ

Why Bearish?

The discontinuation of AK006 and restructuring presents concerns about growth and future projects, reminiscent of other biotech firms that have faced downturns after similar decisions.

How important is it?

The news significantly alters ALLK's operational strategy, impacting investor confidence and potential short-term stock performance.

Why Short Term?

Immediate restructuring costs and uncertainty in strategic alternatives will likely impact investor sentiment.

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IBRXINMIMUX
March 12, 2025 16:02 ET  | Source: Allakos Inc. SAN CARLOS, Calif., March 12, 2025 (GLOBE NEWSWIRE) -- Allakos Inc. (the “Company”) (Nasdaq: ALLK), a biotechnology company that has been developing antibodies for the treatment of allergic, inflammatory and proliferative diseases, today provided a business update and reported financial results for the fourth quarter ended December 31, 2024. Recent Allakos Events Reported topline data from the Phase 1 study of AK006 in patients with chronic spontaneous urticaria in January 2025.Announced in January 2025 that the Company was discontinuing further development of AK006, restructuring operations to reduce costs and exploring strategic alternatives. Cash Guidance Allakos ended the fourth quarter of 2024 with $80.8 million in cash, cash equivalents and investments. Allakos’ financial outlook, restructuring activities and estimated cash outlook as reported by the Company in January 2025 remain unchanged. The Company estimates that cash used in restructuring activities to close out AK006 development, including severance and contractual payments to vendors, will be approximately $34 million to $38 million. The Company also estimates that a significant majority of these restructuring costs will be paid over the first and second quarters of 2025. The Company estimates it will have cash, cash equivalents and investments in a range of approximately $35 million to $40 million at June 30, 2025. Fourth Quarter 2024 Financial Results Allakos ended the fourth quarter of 2024 with $80.8 million in cash, cash equivalents and investments resulting in a net decrease in cash, cash equivalents and investments of $11.9 million during the fourth quarter of 2024. Research and development expenses were $14.8 million in the fourth quarter of 2024 compared to $53.8 million in the fourth quarter of 2023, a decrease of $39.0 million. This quarter over quarter decrease is due to halting lirentelimab development and includes a $31.2 million decrease in contract research and manufacturing costs, $6.7 million of decreased compensation costs and a $1.1 million decrease in other research and development expenses. General and administrative expenses were $9.8 million for the fourth quarter of 2024 compared to $11.2 million for the fourth quarter of 2023, a decrease of $1.4 million. The quarter over quarter change included $2.9 million of decreased compensation costs offset by a $1.5 million increase primarily from professional and other general costs associated with the termination of our office lease. Allakos reported net income of $0.4 million in the fourth quarter of 2024 compared to a net loss of $62.6 million in the fourth quarter of 2023. The gain in the fourth quarter of 2024 was primarily attributed to the $23.9 million gain on lease amendment recognized as a result of the lease termination agreement entered into during the fourth quarter of 2024. About Allakos Allakos is a clinical stage biotechnology company that has been developing therapeutics that target immunomodulatory receptors present on immune effector cells involved in allergy, inflammatory and proliferative diseases. 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. Such forward-looking statements include, but are not limited to, Allakos’ expectations regarding its financial position and guidance, including estimated costs of restructuring activities to close out AK006 development, the timing of payment of such restructuring costs, and estimated ending second quarter 2025 cash, cash equivalents and investments; restructuring activities and plans; and exploration of strategic alternatives. Such statements are based on Allakos’ current views about its plans, intentions, expectations, strategies and prospects only as of the date of this release and are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from those set forth in or implied by such forward-looking statements, including but not limited to: uncertainties related to Allakos’ ability to realize the contemplated benefits of its restructuring activities and related reduction in force; Allakos’ ability to accurately forecast financial results, including restructuring and other costs and expenses; availability of suitable third parties with which to conduct contemplated strategic alternative transactions; whether Allakos will be able to pursue strategic alternative transactions, or whether any transaction, if pursued, will be completed on attractive terms; whether Allakos’ cash resources will be sufficient to fund its foreseeable and unforeseeable operating expenses and capital expenditure requirements; Allakos’ ability to maintain the listing of its common stock on Nasdaq; general economic and market conditions, both domestic and international; risks associated with volatility and uncertainty in the capital markets for biotechnology companies; and other risks. Information regarding the foregoing and additional risks may be found in the section entitled “Risk Factors” in documents that Allakos files from time to time to with the SEC. These documents contain and identify important factors that could cause the actual results for Allakos to differ materially from those contained in Allakos’ forward-looking statements. Any 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 relied upon as representing Allakos’ views as of any date subsequent to the date of this press release. Source: Allakos Inc. Investor Contact:Adam Tomasi, PresidentAlex Schwartz, VP Strategic Finance and Investor Relationsir@allakos.com Media Contact:media@allakos.com ALLAKOS INC. UNAUDITED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME AND LOSS (in thousands, except per share data)   Three Months Ended  Twelve Months Ended   December 31,  December 31,   2024  2023  2024  2023 Operating expenses            Research and development $14,819  $53,801  $79,939  $150,908 General and administrative  9,837   11,182   38,822   45,148 Impairment of long-lived assets  —   —   27,347   — Gain on lease amendment  (23,883)  —   (23,883)  — Total operating expenses  773   64,983   122,225   196,056 Loss from operations  (773)  (64,983)  (122,225)  (196,056)Interest income  1,104   2,382   6,450   10,347 Other expense, net  45   50   (43)  8 Net income (loss)  376   (62,551)  (115,818)  (185,701)Unrealized gain (loss) on investments  (198)  122   86   334 Comprehensive income (loss) $178  $(62,429) $(115,732) $(185,367)Net income (loss) per common share:            Basic and diluted $0.00  $(0.71) $(1.30) $(2.14)Weighted-average number of common shares outstanding:            Basic  89,445   87,567   88,791   86,798 Diluted  90,400   87,567   88,791   86,798  ALLAKOS INC. UNAUDITED CONDENSED BALANCE SHEETS (in thousands)   December 31,  December 31,   2024  2023 Assets      Current assets:      Cash and cash equivalents $17,753  $66,440 Investments  63,067   104,354 Prepaid expenses and other current assets  4,766   9,095 Total current assets  85,586   179,889 Property and equipment, net  10,827   33,369 Operating lease right-of-use assets  —   24,136 Other long-term assets  188   6,216 Total assets $96,601  $243,610 Liabilities and stockholders’ equity      Current liabilities:      Accounts payable $5,490  $1,764 Accrued expenses and other current liabilities  12,294   34,814 Total current liabilities  17,784   36,578 Operating lease liabilities, net of current portion  —   38,215 Total liabilities  17,784   74,793 Stockholders’ equity:      Common stock  90   88 Additional paid-in capital  1,312,886   1,287,156 Accumulated other comprehensive gain (loss)  136   50 Accumulated deficit  (1,234,295)  (1,118,477)Total stockholders’ equity  78,817   168,817 Total liabilities and stockholders’ equity $96,601  $243,610 

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