Following disappointing clinical trial results for AK006, Allakos will cut its workforce down to under 20 employees as it explores strategic alternatives.
A year after slashing about half of its workforce, Allakos announced it will cut 75% of its employees and discontinue further development of AK006 following disappointing Phase 1 results. The move will leave the San Carlos, California–based biotech with about 15 employees as it explores strategic alternatives and winds down the trial, according to the Jan. 27 announcement.
Although AK006 was well tolerated, preclinical inhibitory effects observed did not translate to clinical benefit in patients with chronic spontaneous urticaria (CSU), a skin condition that causes hives, according to a statement by Chin Lee, Allakos chief medical officer, in the press release. In the Phase 1 trial, patients taking AK006 did not show significant improvement in their symptoms as compared with the placebo group.
This is not the first time Allakos has ditched a CSU candidate. In January 2024, the company announced it would halt its humanized IgG1 antibody lirentelimab. The antibody had failed two Phase II studies in atopic dermatitis and CSU. At the time, Allakos noted it would cut about 50% of its employees and focus its efforts and resources on AK006 and additional preclinical programs.
Closing out AK006 development and the latest workforce reduction will cost the company about $34 million to $38 million, with most costs paid out during the first half of 2025, according to the biotech. Allakos expects to have cash, cash equivalents and investments of $35 million to $40 million on June 30.
The company has incurred net losses and negative cash flows from operations since inception, according to a Nov. 6 SEC filing. As of Sept. 30, Allakos had an accumulated deficit of $1.2 billion. It had about $81 million in cash, cash equivalents and investments at the end of the year, according to the Jan. 27 announcement.
