By Denny Jacob
In a major setback for Allakos, the biotechnology company's shares took a deep dive of 61% to $1.17 in premarket trading. This comes after the company announced that it will be halting all activities related to lirentelimab, spanning across clinical, manufacturing, research, and administrative functions.
Over the past 12 months, the stock has plummeted by approximately 62%, signaling a challenging period for the company.
As a consequence of this halt, Allakos will be downsizing its workforce by about half. The decision stems from the disappointing results of two trials involving lirentelimab treatment for patients with atopic dermatitis and chronic spontaneous urticaria. Both trials failed to meet their primary endpoints.
"Given that neither trial met its primary endpoint, we have decided to not pursue further clinical development of lirentelimab," commented Chief Medical Officer Craig Paterson.
Allakos now plans to undergo a restructuring process to cut costs and shift its focus towards AK006 clinical development and additional preclinical programs. Fortunately, the company's cash runway is expected to extend into mid-2026 as a result of these measures.