In a report released on March 14, Thomas Smith from Leerink Partners reiterated a Hold rating on Allakos (ALLK – Research Report), with a price target of $0.40.
Thomas Smith has given his Hold rating due to a combination of factors surrounding Allakos’s current financial and strategic position. The company is in the midst of restructuring and is exploring strategic alternatives after discontinuing the development of its lead asset, AK006, due to unsatisfactory Phase 1 trial results. This uncertainty in their pipeline and future clinical direction contributes to the cautious stance.
Additionally, Allakos reported ending the fourth quarter of 2024 with approximately $81 million in cash and equivalents, but significant expenditures are expected in the coming quarters due to restructuring efforts. The anticipated cash balance by mid-2025 is projected to be between $35 million and $40 million, which raises concerns about the company’s financial sustainability. Given these factors, Thomas Smith remains on the sidelines, awaiting further developments regarding the company’s strategic decisions.
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