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Here’s the Reason the Allakos Inc. (ALLK) Stock Dropped in the After Market

Allakos Inc. (ALLK) is a leading clinical-stage biopharmaceutical company primarily focusing on the treatment of allergic, inflammatory, and proliferative diseases via developing antibodies which target the immunomodulatory receptors. The main product candidate of the company is lirentelimab (AK002), a Phase 3 clinical study investigational drug used for the treatment of eosinophilic gastritis (EG) and eosinophilic duodenitis (EoD). Phase 2/3 clinical studies for chronic urticaria and Phase 2 clinical studies for asthma will also be underway by the next year.

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The price of ALLK stock during the regular trading of December 22, 2021, with a notable decline of 89.87% was $8.55. At last check in the aftermarket, the stock was further down by 11.70%.

Events and Happenings

On December 21, 2021, ALLK announced the unsatisfactory results from ENIGMA 2 which is a Phase 3 clinical study of AK002 in patients with EG and EoD. The company also reported disappointing results from KRYPTOS, Phase 2/3 clinical studies of AK002 in patients with eosinophilic esophagitis (EoE). Both trials did not achieve positive outcomes in the patients. The company’s management was disappointed at the unexpected outcomes.

On November 30, 2021, ALLK reported about the initiation of Phase 2 clinical trials on patients with atopic dermatitis for subcutaneous lirentelimab. ALLK also planned to start clinical trials in patients with chronic spontaneous urticaria and in asthma patients with or without an eosinophilic appearance.

Key Financials

On November 08, 2021, ALLK announced financial results for the third quarter ended September 30, 2021. Some of the key updates are as follows

Net Loss per Share

Basic and diluted net loss per share for the third quarter of 2021 was $62.7 million or $1.16 per share as opposed to $42.1 million or $0.86 per share for the same period of 2020. An increase of $20.6 million in net loss was reported over the year.

Total Current Assets

Total current assets of ALLK were $531 million for Q3 2021 as compared to the same period of 2020 when they were $424 million.

On October 25, 2021, ALLK reported about the receipt of the Presidential Poster Award from the American College of Gastroenterology. The title of the poster was ‘High Discovery Rate of Eosinophilic Gastritis and Duodenitis Among Patients with Chronic Unexplained Gastrointestinal Symptoms’.

Conclusion

The stock price nose dived following the company’s announcement of the unexpected negative outcomes from the clinical trials of the lead products of ALLK. The company needs to show significant positive results with regards to its clinical trials to attract possible investors and collaborations from the healthcare sector.

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