On November 7, 2022 Allakos Inc. (the "Company") (Nasdaq: ALLK), a biotechnology company developing lirentelimab (AK002) and AK006 for the treatment of allergic and inflammatory diseases, reported a business update and reported financial results for the third quarter ended September 30, 2022 (Press release, Allakos, NOV 7, 2022, View Source [SID1234623220]).
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Recent Allakos Events
Allakos’s lirentelimab clinical development is focused on atopic dermatitis and chronic spontaneous urticaria.
Initiated a Phase 2b randomized, double-blind, placebo-controlled study of subcutaneous lirentelimab in patients with chronic spontaneous urticaria (CSU) in the third quarter of 2022. The Phase 2b CSU clinical trial follows positive results from an open-label Phase 2a clinical trial with intravenous lirentelimab in patients with chronic urticaria, including cohorts of patients with omalizumab naïve CSU and omalizumab refractory CSU.
Reported topline data from Phase 3 EoDyssey study of lirentelimab in patients with eosinophilic duodenitis (EoD) in the third quarter of 2022. Allakos is currently not planning to conduct additional studies in eosinophilic gastrointestinal diseases, but may do so in the future.
Closed an underwritten common stock offering in September 2022. Aggregate proceeds received from the offering were approximately $140.5 million, net of underwriting commissions and related expenses. Investors who purchased shares in the offering include Logos Capital, BVF Partners L.P., Deep Track Capital, New Enterprise Associates (NEA), Vivo Capital, Frazier Life Sciences, Braidwell LP, Commodore Capital, RTW Investments, L.P., TCGX, Surveyor Capital (a Citadel Company), and Alta Partners.
Upcoming Allakos Milestones
Complete IND-enabling studies of AK006 during 2022 and initiate the first-in-human study in the first half of 2023.
Report topline data from the Phase 2 study of subcutaneous lirentelimab in patients with atopic dermatitis in the second half of 2023.
Report topline data from the Phase 2b study of subcutaneous lirentelimab in patients with chronic spontaneous urticaria in the second half of 2023.
Third Quarter 2022 Financial Results
Research and development expenses were $18.4 million in the third quarter of 2022 compared to $43.6 million in the third quarter of 2021. Third quarter of 2022 research and development expenses included a $12.2 million benefit from selling or receiving refunds from the disposal of previously expensed raw materials. Excluding the $12.2 million benefit, research and development expenses decreased from the prior year third quarter due to a decrease in contract research and development and clinical costs primarily relating to lirentelimab, partially offset by an increase in equipment and overhead costs.
General and administrative expenses were $13.0 million in the third quarter of 2022 compared to $19.1 million in the third quarter of 2021. Third quarter of 2022 general and administrative expenses decreased by $6.1 million compared to the same period in 2021 due to decreases in personnel-related costs, equipment and overhead related costs and other general and administrative expenses.
Including the $12.2 million benefit received from raw material disposals, Allakos reported a net loss of $30.8 million in the third quarter of 2022 compared to $62.7 million in the third quarter of 2021. Additionally, the third quarter of 2022 included non-cash expenses for stock-based compensation of $10.7 million, compared to $12.5 million in the same period in 2021, and depreciation of $1.5 million, compared to $0.4 million in the same period in 2021. Net loss per basic and diluted share was $0.53 for the third quarter of 2022 compared to $1.16 in the third quarter of 2021. Weighted-average shares outstanding used to calculate basic and diluted loss per share was 58.2 million and 54.1 million for the third quarter of 2022 and 2021 respectively. As part of the September 21, 2022 common stock offering, 29.9 million shares were sold resulting in 85.2 million shares outstanding as of September 30, 2022.
Allakos ended the third quarter of 2022 with $325.3 million in cash, cash equivalents and investments.