Allakos (ALLK) AI Stock Analysis

• Market Cap: $21.17M
• Dividend Yield: N/A
• Average Volume (3M): 930.81K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.82
• Revenue Growth: N/A
• EPS Growth: 38.65%
• Country: US
• Employees: 131
• Sector: Healthcare
• Sector Strength: 70
• Industry: Biotechnology
• EPS (TTM): -1.31
• Shares Outstanding: 90,203,250
• 10 Day Avg. Volume: 710,489
• 30 Day Avg. Volume: 930,813
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• Price to Cash Flow (P/CF): -0.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $0.35
• Price Target Upside: 52.17% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Allakos faces significant financial challenges with no revenue and cash burn, compounded by recent negative corporate events such as the discontinuation of the AK006 program. Technical indicators show bearish momentum, and valuation metrics reflect ongoing unprofitability, leading to a low overall score.

Positive Factors

Cash Reserves

The company ended the quarter with a substantial amount of cash and equivalents.

Financial Performance

ALLK reported a net income for the quarter, reflecting a stable financial position despite challenges.

Negative Factors

Clinical Trial Outcome

AK006 failed to demonstrate therapeutic activity vs. placebo, and that further development of AK006 is being discontinued.

Restructuring Costs

There are significant wind down costs related to shutting down the AK006 program, severance payments, and contractual payments to vendors.

Workforce Reduction

The Allakos workforce is being reduced by approximately 75%.

Allakos Business Overview & Revenue Model

Company Description

Allakos Inc., a clinical stage biopharmaceutical company, develops therapeutics that target immunomodulatory receptors present on immune effector cells in allergy, inflammatory, and proliferative diseases. The company's lead monoclonal antibody is lirentelimab (AK002), which is in a Phase III study for the treatment of eosinophilic gastritis and/or eosinophilic duodenitis; a Phase II/III study for eosinophilic esophagitis; and a Phase II clinical study to atopic dermatitis and chronic spontaneous urticaria. It is also developing lirentelimab (AK002) for the treatment of mast cell gastrointestinal disease, chronic urticaria, severe allergic conjunctivitis, and indolent systemic mastocytosis; and AK006 to treat allergic and inflammatory diseases. The company was incorporated in 2012 and is headquartered in Redwood City, California.

How the Company Makes Money

As a biotechnology company, Allakos primarily makes money through the development and commercialization of its therapeutic products. Revenue generation is generally achieved through a combination of product sales, licensing agreements, and collaboration partnerships with other pharmaceutical or biotech companies. Allakos may also receive milestone payments and royalties based on the successful development and commercialization of its drug candidates. However, as of the latest available data, Allakos has not yet commercialized any products, and its revenues are mainly dependent on funding from investors and potential partnerships.

Allakos Financial Statement Overview

Summary

Allakos is experiencing typical challenges of a biotech firm in development, with no revenue, sustained losses, and cash burn. While it maintains a conservative debt profile, declining cash reserves suggest potential liquidity issues.

Income Statement

Allakos has had consistently no revenue over the years, which is expected in the biotechnology sector where the focus is often on R&D before product commercialization. The company has been experiencing significant losses, indicated by negative EBIT and net income. This reflects high operational costs without offsetting income, leading to weak profitability metrics.

Balance Sheet

The company maintains a conservative debt profile with zero debt in the latest period and historically low debt levels. However, declining cash reserves and shrinking equity base are concerning. The high equity ratio indicates reliance on equity financing, common in biotech, but depleting cash suggests potential liquidity challenges.

Cash Flow

Allakos shows negative operating and free cash flows, indicating cash burn which is typical for pre-revenue biotech firms engaged in R&D. The decreasing trend in free cash flow is worrying, though offset by previous financing activities. The cash flow to net income ratios are not meaningful due to negative net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	0.00	0.00	0.00
	Gross Profit
0.00	-6.14M	-9.97M	-4.88M	-2.34M
	EBIT
-122.22M	-196.06M	-322.43M	-271.48M	-157.06M
	EBITDA
-122.22M	-189.91M	-315.36M	-269.17M	-155.51M
	Net Income Common Stockholders
-115.82M	-185.70M	-317.48M	-267.17M	-147.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
80.82M	170.79M	279.79M	424.24M	659.00M
	Total Assets
96.60M	243.61M	386.42M	534.82M	719.62M
	Total Debt
4.16M	41.47M	49.11M	49.10M	42.77M
	Net Debt
-13.60M	-24.98M	-38.11M	-103.72M	-164.40M
	Total Liabilities
17.78M	74.79M	75.99M	89.35M	65.22M
	Stockholders Equity
78.82M	168.82M	310.43M	445.48M	654.39M
Cash Flow		Free Cash Flow
-93.74M	-117.07M	-288.30M	-241.07M	-114.55M
	Operating Cash Flow
-93.62M	-116.48M	-279.97M	-207.85M	-113.92M
	Investing Cash Flow
44.76M	93.17M	71.68M	143.24M	3.90M
	Financing Cash Flow
177.00K	2.53M	141.88M	10.26M	278.84M

Allakos Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLK, the sentiment is Negative. The current price of 0.23 is below the 20-day moving average (MA) of 0.25, below the 50-day MA of 0.36, and below the 200-day MA of 0.78, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 30.42 is Neutral, neither overbought nor oversold. The STOCH value of 12.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALLK.

Allakos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KNSA	66 Neutral	$1.68B	―	-9.85%	―	56.60%	-403.56%
ANAB	57 Neutral	$581.14M	―	-182.71%	―	432.03%	14.41%
Sector *	49 Neutral	$6.85B	0.81	-52.75%	2.49%	20.08%	1.28%
ADAP	46 Neutral	$52.72M	―	-273.36%	―	194.23%	45.50%
CRSP	46 Neutral	$3.26B	―	-19.20%	―	-89.95%	-123.71%
ALLK	27 Underperform	$21.17M	―	-93.54%	―	―	38.65%

Allakos Corporate Events

Allakos Restructures Amid AK006 Program Discontinuation

On January 27, 2025, Allakos announced its decision to discontinue development of AK006 after phase 1 clinical trials showed no therapeutic activity in patients with chronic spontaneous urticaria. As part of a corporate restructuring, the company plans to discontinue all AK006-related activities and reduce its workforce by approximately 75%, incurring estimated costs of $34 million to $38 million. This significant restructuring reflects a shift in the company’s strategy, which also involves exploring strategic alternatives and maintaining financial flexibility.

Allakos Restructures Amid AK006 Discontinuation and Layoffs

On January 27, 2025, Allakos Inc. announced the discontinuation of its AK006-related activities, including clinical trials and manufacturing, resulting in a 75% workforce reduction. This decision is part of a restructuring plan to close out the development of AK006, a drug tested in a Phase 1 study for Chronic Spontaneous Urticaria, which showed limited efficacy. The company aims to retain approximately 15 employees to explore strategic alternatives and maintain regulatory compliance. As of the end of 2024, Allakos reported $81 million in cash and estimates restructuring costs between $34 million and $38 million, expecting to hold $35 million to $40 million by mid-2025.