Allakos Halts AK006 Program, Initiates Major Restructuring After Phase 1 Failure

Allakos Inc., a clinical-stage biopharmaceutical company, has announced the discontinuation of its AK006 program and a significant restructuring following disappointing phase 1 trial results in chronic spontaneous urticaria (CSU). The decision marks a critical setback for the company and raises questions about the viability of Siglec-6 as a therapeutic target.

Phase 1 Trial Results and Program Termination

The phase 1 trial, which evaluated AK006 in 34 adults with moderate-to-severe CSU, failed to demonstrate efficacy superior to placebo. Patients receiving AK006 showed an 8.2-point improvement on a 42-point disease scale, while the placebo group improved by 12.4 points. The proportion of complete responses was identical in both arms at 9%.

Dr. Chin Lee, Chief Medical Officer of Allakos, noted that the placebo response was "in line with what we've seen for other CSU clinical trials." However, the lack of differentiation from placebo led to the company's decision to halt further development of AK006.

Corporate Restructuring and Strategic Alternatives

In response to the clinical setback, Allakos has announced a sweeping restructuring plan:

• 75% of employees will be laid off
• Clinical, manufacturing, research, and administrative functions related to AK006 will be discontinued
• Approximately 15 employees will be retained to explore strategic alternatives and manage compliance and wind-down activities

CEO Robert Alexander, Ph.D., commented on the failure's implications: "We don't know why the preclinical data didn't translate in humans, but clearly it did not. All we can say now is that we know that [Siglec-]6 is not active in CSU, whether it would be active in another disease setting we don't know."

Financial Impact and Future Outlook

The restructuring will have a significant impact on Allakos' financial position:

• Estimated restructuring costs: $34 million to $38 million
• Cash reserves expected to decrease from $81 million to $35-40 million by mid-year
• The company will explore "the usual things" in terms of strategic alternatives

Alexander added, "We'll do that for a period of time and if something comes up we'll pursue it. If not, we'll continue with the wind-down of the company."

This development follows a series of setbacks for Allakos, including the failure of its previous lead candidate, lirentelimab, in two phase 2 trials last year. The company's future now hangs in the balance as it explores strategic options in a challenging biotech market.