Summary of Allakos (ALLK) Conference Call - January 16, 2024 Company Overview - **Company**: Allakos Inc. (Ticker: ALLK) - **Focus**: Development of treatments for chronic spontaneous urticaria (CSU) and atopic dermatitis (AD) using lirintelemab and the new AK006 program Key Points from the Conference Call Clinical Study Results 1. **Atopic Dermatitis Study**: - Phase II study of lirintelemab in moderate to severe atopic dermatitis showed a modest numerical superiority over placebo, but the results were not statistically significant [7][8][12] - 131 subjects were randomized to receive either 300 mg of lirintelemab or placebo every two weeks [6] - Primary endpoint: Proportion of subjects achieving a 75% reduction in EASI score at week 14 [6] - Secondary endpoints included changes in EASI and IGA scores, with no significant differences observed [7][8] 2. **Chronic Spontaneous Urticaria Study**: - Phase II study of lirintelemab in CSU also showed no significant differences in primary efficacy endpoints [13][14] - 127 patients were randomized to receive either 300 mg of lirintelemab or placebo [12] - Primary endpoint: Change in UAS7 score at week 12 [12] - Low placebo response rate was noted, consistent with other CSU studies [13] Financial Update 3. **Restructuring and Cash Management**: - Company announced a restructuring to reduce operating expenses, extending cash runway into mid-2026 [17][20] - Approximately $170 million in cash and investments at the end of 2023 [19] - Anticipated cash burn of $30 million in 2024 due to restructuring, with ongoing operations expected to cost $55 million to $60 million [20] - Plans to avoid raising additional capital until after reporting AK006 top-line data [21] AK006 Program Insights 4. **Comparison with Lirintelemab**: - AK006 targets a different receptor and is considered more potent than lirintelemab [22][23] - AK006 has a longer residence time on the cell surface and induces antibody-dependent cellular phagocytosis (ADCP), which lirintelemab does not [24][28] - Preclinical data suggests AK006 is significantly more effective in inhibiting mast cells compared to lirintelemab [29][30] 5. **Upcoming Milestones**: - Data from healthy volunteers expected in Q2 2024, with top-line data for CSU anticipated by year-end 2024 [20][41] - Phase I studies for AK006 are ongoing, with plans for a Phase II study in CSU to begin in early Q2 2024 [39][41] Market Context and Competitive Landscape 6. **Market Positioning**: - Company remains optimistic about AK006's potential in the CSU market despite competition from other treatments [92] - The evolving treatment landscape includes competitors like Regeneron, but Allakos believes it can offer a cleaner safety profile [92] Additional Considerations 7. **Safety Profile**: - Safety profile of lirintelemab was consistent with previous studies, with injection-related reactions being the most common adverse event [16] - Ongoing studies will further evaluate the safety and efficacy of AK006 in various indications [36][39] 8. **Investor Sentiment**: - Investors expressed concerns regarding the disappointing results from lirintelemab studies, seeking clarity on the potential of AK006 [60][61] - Company emphasized the importance of upcoming data to build confidence in AK006's efficacy [66][68] Conclusion - Allakos is navigating a challenging landscape with its current products while focusing on the promising AK006 program. The restructuring efforts aim to extend financial viability and support ongoing clinical trials, with significant data expected in the near future.