Allakos (NASDAQ:ALLK) stock is taking a beating on Tuesday after the clinical-stage biopharmaceutical company revealed results from its latest study.
The bad news here comes from the company’s Phase 2 and Phase 2b clinical trials of lirentelimab. These trials were evaluating the drug as a treatment for atopic dermatitis (ATLAS) and chronic spontaneous urticaria (MAVERICK).
Unfortunately for investors in ALLK stock, neither of the clinical trials were a success. They both failed to meet their primary endpoints. This has Allakos no longer progressing clinical development of lirentelimab.
Craig Paterson, Chief Medical Officer of Allakos, said the following about the lackluster trial results:
“We are disappointed that these trials did not meet their primary endpoint, particularly given the need for new treatment options for patients with these severe diseases. Given that neither trial met its primary endpoint, we have decided to not pursue further clinical development of lirentelimab.”
What’s Next for ALLK Stock?
Considering these latest clinical trial results, Allakos has announced changes to focus on the clinical development of AK006. This has it restructuring the business and cutting 50% of its workforce. Doing so will give it enough cash runway to last until mid-2026.
While today’s news is a major blow to ALLK stock with a 56.6% drop as of Tuesday morning, there is hope for recovery. It’s possible that the development of AK006 could go well and help the company bounce back from the failure of lirentelimab.
Investors will be waiting for those results, as the company doesn’t expect its Phase 1 data to be ready until the end of 2024. That means traders interested in buying ALLK while it’s low will have to wait some time to see if a stake in the company will pay off.
Traders seeking out more of the latest stock market stories are in luck!
We’re offering all of the hottest stock market coverage investors need to know about on Tuesday! A few examples include what’s going on with shares of Uber (NYSE:UBER), Tesla (NASDAQ:TSLA) and Stellantis (NYSE:STLA) stock. You can find more on these matters at the following links!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
