Allakos Announces Discontinuation of AK006 Program and 75% Layoffs Following Clinical Trial Failures

Clinical Trial Failures:
Allakos' lead drug, AK006, failed to meet its primary endpoints in clinical trials for chronic spontaneous urticaria and atopic dermatitis12.

Layoffs:
The company announced a 75% workforce reduction, retaining only about 15 employees to wind down trials, maintain regulatory compliance, and explore strategic alternatives25.

Financial Impact:
Allakos' stock price plummeted 59% after the announcement, and the company's market value dropped to approximately $22 million2.

Restructuring Costs:
The company estimates restructuring costs between $34 million and $38 million, expecting to hold $35 million to $40 million by mid-20255.

Future Plans:
Allakos will explore strategic alternatives, including licensing deals, mergers, sales, or research partnerships, but lacks other drug candidates in clinical trials and has never earned revenue25.

Sources:

1. https://www.clinicaltrialsarena.com/news/allakos-cuts-employee-count-by-half-after-two-phase-ii-failures/

2. https://www.sfgate.com/tech/article/allakos-lays-off-most-staff-20058900.php

5. https://www.tipranks.com/news/company-announcements/allakos-restructures-amid-ak006-discontinuation-and-layoffs