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Allakos Inc. (ALLK)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 showed materially lower operating spend and net loss as Allakos advanced AK006 and reiterated cash runway into mid-2026; net loss was $26.7M and EPS was -$0.30, improving versus Q1’s net loss of $71.1M and EPS of -$0.81 .
  • Cash, cash equivalents, and investments ended at $123.1M, down $16.2M in the quarter; year-end 2024 cash guidance remains $81–$86M and runway extends into mid-2026 (maintained) .
  • R&D decreased to $19.4M (from $34.8M in Q1 and $27.3M YoY) as lirentelimab exit lowered contract R&D and compensation costs; G&A fell to $9.2M YoY .
  • Execution milestones: positive Phase 1 IV healthy volunteer results (high Siglec‑6 receptor occupancy, favorable safety), SC cohort completion, and CSU Phase 1 initiation; Phase 1 SC HV results slated for Q3 2024 and randomized CSU data by year-end 2024 .
  • Stock reaction catalyst: upcoming AK006 data (SC HV in Q3; randomized CSU at year end) and continued validation of mast cell inhibition may shape sentiment near term .

What Went Well and What Went Wrong

What Went Well

  • “Allakos ended the second quarter of 2024 with $123.1 million in cash, cash equivalents and investments” and maintained guidance for year-end cash and runway into mid-2026, underscoring disciplined cash management .
  • AK006 development advanced: reported safety/PK/PD in IV healthy volunteers with high mast cell Siglec‑6 receptor occupancy and favorable safety profile; SC HV cohort dosing completed; CSU Phase 1 initiated .
  • Operating discipline: R&D fell to $19.4M (down $7.9M YoY), driven by lower contract R&D post‑lirentelimab, reduced compensation, and other R&D savings; G&A down $1.3M YoY .

What Went Wrong

  • No reported product revenue; the model remains pre‑commercial and dependent on clinical milestones and financing windows .
  • Q2 cash decreased by $16.2M; while guided, continued burn highlights execution risk in progressing AK006 through clinical stages .
  • Lirentelimab program exit continues to drive ~$30M of 2024 closeout/severance/other costs (with $13M incurred in H1; $1M in Q2), reducing near‑term cash flexibility despite restructuring benefits .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Net Loss ($USD Millions)$62.6 $71.1 $26.7
Diluted EPS ($USD)-$0.71 -$0.81 -$0.30
Research & Development ($USD Millions)$53.8 $34.8 $19.4
General & Administrative ($USD Millions)$11.2 $10.9 $9.2
Total Operating Expenses ($USD Millions)$65.0 $73.1 $28.6
Interest Income ($USD Millions)$2.4 $2.0 $2.0
Net Decrease in Cash & Investments ($USD Millions)$23.1 $31.5 $16.2
Cash, Cash Equivalents & Investments End of Period ($USD Millions)$170.8 $139.3 $123.1
Weighted Avg Shares (Millions)87.6 88.0 88.6

Notes:

  • Company did not report revenues or operating margins; model remains pre‑revenue .
  • Q1 2024 included a $27.3M non‑cash impairment tied to market cap decline and lirentelimab halt .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Year‑end 2024 Cash, Cash Equivalents & Investments ($USD Millions)FY 2024$81–$86 $81–$86 Maintained
Cash RunwayMulti‑yearExtends into mid‑2026 Extends into mid‑2026 Maintained
2024 Lirentelimab Closeout/Severance/Other Costs ($USD Millions)FY 2024~$30; majority H1 ~$30; $13M paid in H1 ($1M in Q2) Maintained (progress update)
2024 Adjusted Net Cash Used in Operating Activities (non‑GAAP) ($USD Millions)FY 2024$55–$60 (excl. ~$30M closeout) Not updated; outlook unchanged Maintained

Earnings Call Themes & Trends

There was no earnings call transcript located for Q2 2024 in our document catalog; themes below reflect press releases and 8‑K materials .

TopicPrevious Mentions (Q4 2023 and Q1 2024)Current Period (Q2 2024)Trend
R&D execution – AK006Q4: SAD complete, MAD ongoing; SC cohort initiated . Q1: SAD/MAD IV completed dosing; SC HV completed; CSU Phase 1 initiated .Reported IV HV safety/PK/PD; high Siglec‑6 receptor occupancy; SC HV cohort completed; CSU Phase 1 ongoing .Positive execution momentum
Restructuring & cash runwayRestructuring focused on AK006; runway into mid‑2026 . Q1 reiterated cash outlook .Guidance unchanged; runway into mid‑2026; YE cash $81–$86M .Stable/maintained
Scientific validationAAAAI preclinical data and publication highlighting mast cell inhibition .EAACI preclinical data on mast cell inhibition with AK006 .Continued validation
Program transitionsLirentelimab halted in Jan 2024; closeout costs guided for 2024 .Closeout payments tracked ($13M H1; $1M Q2) .Wind‑down progressing
Regulatory/legalNo approvals; early‑stage development .Early‑stage; CSU Phase 1 ongoing .Unchanged (clinical stage)

Management Commentary

  • “Allakos ended the second quarter of 2024 with $123.1 million in cash, cash equivalents and investments.”
  • “The Company reiterates that the restructuring activities will extend the cash runway into mid‑2026 and continues to expect to end 2024 with total cash, cash equivalents and investments in the range of $81 to $86 million.”
  • “Reported safety, pharmacokinetics (PK), and pharmacodynamic (PD) results from the Phase 1 trial of IV AK006 in healthy volunteers.”
  • “Skin biopsies from subjects treated with AK006 show high receptor occupancy… AK006 was well‑tolerated with a favorable safety profile.”

Q&A Highlights

  • No Q2 2024 earnings call transcript was available; no Q&A themes identified from transcripts .

Estimates Context

  • S&P Global Wall Street consensus estimates for ALLK were unavailable via our connector at the time of this review; as a result, comparisons versus consensus are not provided.
  • Allakos remains pre‑revenue and EPS remains negative; near‑term estimate updates will likely focus on quarterly burn and timing of AK006 data readouts .

Key Takeaways for Investors

  • Material QoQ improvement in net loss and EPS (-$0.30 vs -$0.81) driven by lower R&D/G&A following lirentelimab exit and restructuring; supports the maintained runway outlook into mid‑2026 .
  • Cash ended at $123.1M; YE 2024 guidance of $81–$86M maintained; watch quarterly cash decline rates versus timelines for AK006 data to assess financing needs .
  • AK006’s IV Phase 1 HV data (high receptor occupancy, favorable safety) and SC cohort completion de‑risk the biology; upcoming SC HV data (Q3) and randomized CSU Phase 1 data (year‑end) are key catalysts .
  • Operating discipline evident: R&D fell to $19.4M and G&A to $9.2M; continued savings vs. 2023 improve burn trajectory but headline cash outflows persist .
  • Lirentelimab closeout costs (~$30M in 2024; $13M H1; $1M Q2) remain a transitory drag; expect tailing impact post‑2024 .
  • Trading setup: near‑term sentiment likely tracks AK006 clinical readouts and validation events; lack of revenue and early‑stage risk keep shares sensitive to data outcomes .
  • Medium‑term thesis: if AK006 maintains safety and demonstrates CSU efficacy, Allakos could transition to later‑stage development with optionality; otherwise, cash runway and strategic alternatives become focal .

Appendix: Source Documents Reviewed

  • Q2 2024 8‑K (Item 2.02) with press release and financial statements .
  • Q1 2024 8‑K (Item 2.02) press release and financial statements .
  • Q4 2023 8‑K (Item 2.02) press release and financial statements .
  • Relevant Q2 2024 press releases: AK006 IV Phase 1 HV data (June 25, 2024) and CSU first patient dosed (May 28, 2024) .