The biotech Tuesday announced a restructuring plan as its humanized IgG1 antibody lirentelimab failed two Phase II studies in atopic dermatitis and chronic spontaneous urticaria.
Pictured: Illustration depicting large layoffs/iStock, Andrii Yalanskyi
In an effort to cut costs and extend its cash runway, Allakos on Tuesday announced a strategic restructuring initiative that will involve laying off approximately 50% of its employees and focusing its resources on a Phase I candidate.
The California-based biotech will also “halt lirentelimab-related activities across clinical, manufacturing, research and administrative functions,” according to Tuesday’s announcement. At the end of 2023, Allakos had $171 million in cash, cash equivalents and investments—and it expects the restructuring program to extend its runway into mid-2026.
On Tuesday, alongside the announcement of the strategic restructuring, Allakos reported that lirentelimab failed its Phase II studies in atopic dermatitis and chronic spontaneous urticaria.
Allakos’ shares crashed around 61% in premarket trading on Tuesday in response to the announcement, according to Seeking Alpha.
Lirentelimab is a humanized IgG1 monoclonal antibody designed to target and activate the Siglec-8 receptor, which is typically found on mature eosinophils and mast cells. When bound by lirentelimab, Siglec-8 exerts its inhibitory effect on several key signaling cascades inside these cells, in turn potentially addressing the underlying pathologies for certain inflammatory diseases, according to the biotech’s website.
However, over the years, this mechanism of action has returned mixed results for Allakos. In December 2021, the biotech posted readouts from two studies. In both cases, lirentelimab hit one of its co-primary endpoints but missed the other.
In the Phase III ENIGMA 2 study, the anti-Siglec-8 antibody induced statistical histological improvements but failed to significantly ease symptom burden in patients with eosinophilic gastritis and/or eosinophilic duodenitis. The Phase II/III KRYPTOS trial in eosinophilic esophagitis returned similarly confusing data, with lirentelimab acing its histologic endpoint but not its symptomatic targets.
With lirentelimab’s discontinuation, Allakos will now focus its effort and resources on Phase I candidate AK006, another investigational humanized IgG1 monoclonal antibody. AK006 targets Siglec-6, which functions similarly to Siglec-8 but is exclusively found on mast cells.
AK006 is currently in a Phase I study in healthy volunteers, for which the biotech aims to complete its single- and multiple-ascending dose cohorts in the first quarter of 2024.
Allakos is also eyeing a Phase I trial of intravenous AK006 in chronic spontaneous urticaria. The biotech is planning to launch the study in the second quarter of 2024 and report topline data by year-end, according to its Tuesday’s announcement.
The company’s reduction in workforce continues an industry layoff trend in 2023, in which more than 120 public biotechs terminated upwards of 10,000 jobs, according to an analysis by BioPharma Dive. But there is reason for the sector to be more upbeat this year. At last week’s 42nd annual J.P. Morgan Healthcare Conference, experts pointed to signs of life in biopharma on the investment side and expressed cautious optimism overall for 2024.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
