Allakos (ALLK) AI Stock Analysis

• Market Cap: $22.84M
• Dividend Yield: N/A
• Average Volume (3M): 2.26M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.74
• Revenue Growth: N/A
• EPS Growth: -5.32%
• Country: US
• Employees: 131
• Sector: Healthcare
• Sector Strength: 78
• Industry: Biotechnology
• EPS (TTM): -2.03
• Shares Outstanding: 89,343,636
• 10 Day Avg. Volume: 739,747
• 30 Day Avg. Volume: 2,261,036
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• Price to Cash Flow (P/CF): -0.20
• 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: $0.33
• Price Target Upside: 32.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Allakos faces notable challenges, with weak financial performance and technical indicators, compounded by recent restructuring due to the discontinuation of a key program. While the company maintains a cautious balance sheet, the lack of profitability and negative market sentiment weigh heavily on its stock potential.

Positive Factors

Mechanism of Action

The unique mechanism of AK006 targeting Siglec-6 is anticipated to provide a differentiated safety profile, which is important for otherwise healthy CSU patients.

Safety Profile

Allakos is expected to report data from approximately 20 patients on AK006, highlighting a benign safety profile as a key differentiator.

Negative Factors

Clinical Trial Failure

AK006 Phase 1 trial fails to show efficacy in CSU.

Workforce Reduction

The Allakos workforce is being reduced by approximately 75%.

Allakos Business Overview & Revenue Model

Company Description

Allakos Inc. (ALLK) is a clinical-stage biotechnology company focused on the development of therapeutic antibodies targeting allergic, inflammatory, and proliferative diseases. The company is based in the United States and operates in the healthcare sector, primarily within the biopharmaceutical industry. Allakos’ core product includes AK002, a monoclonal antibody designed to treat various eosinophil and mast cell-related diseases, such as eosinophilic gastritis and eosinophilic esophagitis.

How the Company Makes Money

As a clinical-stage biotechnology company, Allakos does not yet have any commercialized products and, therefore, does not generate revenue from product sales. The company's primary source of funding comes from investments, including public and private offerings, partnerships, and collaborations aimed at supporting its research and development activities. Allakos focuses on advancing its product candidates through clinical trials, with the goal of obtaining regulatory approvals for commercialization in the future, which would then allow it to generate revenue through product sales, licensing agreements, and potentially partnerships with larger pharmaceutical companies.

Allakos Financial Statement Overview

Summary

Allakos is in a transitional phase with initial revenue generation but continues to face significant profitability challenges. The company's balance sheet displays prudent leverage management, yet declining equity and negative returns highlight ongoing operational losses. Cash flow constraints emphasize the need for strategic improvements to achieve sustainable growth and profitability in this highly competitive biotechnology sector.

Income Statement

Allakos has recently reported revenue, marking a significant change from previous years with no revenue. However, the company is still experiencing substantial losses, as evidenced by the negative EBIT and net income. Gross profit margin is positive, but net profit margin remains negative due to high operating expenses. There is potential for revenue growth, but profitability remains a challenge.

Balance Sheet

The company maintains a manageable debt-to-equity ratio, indicating a cautious approach to leverage. The equity ratio has decreased, reflecting a reduction in stockholders' equity. Despite a declining asset base, cash reserves remain significant, offering some stability in operations. Return on equity is negative due to losses, underscoring the need for improved profitability.

Cash Flow

Allakos has a negative free cash flow, reflecting cash outflows exceeding inflows. Operating cash flow is also negative, indicating cash consumption in core operations. The operating cash flow to net income ratio is less meaningful due to negative figures. The company has managed to reduce its cash burn compared to prior years, yet sustainable cash flow generation remains a challenge.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
10.76M	0.00	0.00	0.00	0.00	0.00
	Gross Profit
7.26M	-6.14M	-9.97M	-4.88M	-2.34M	-1.51M
	EBIT
-159.09M	-196.06M	-322.43M	-271.48M	-157.06M	-91.42M
	EBITDA
-155.60M	-189.91M	-315.36M	-269.17M	-155.51M	-91.42M
	Net Income Common Stockholders
-178.75M	-185.70M	-317.48M	-267.17M	-147.62M	-77.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
170.79M	170.79M	279.79M	424.24M	659.00M	495.90M
	Total Assets
243.61M	243.61M	386.42M	534.82M	719.62M	516.89M
	Total Debt
41.47M	41.47M	49.11M	49.10M	42.77M	8.52M
	Net Debt
-24.98M	-24.98M	-38.11M	-103.72M	-164.40M	-29.84M
	Total Liabilities
74.79M	74.79M	75.99M	89.35M	65.22M	21.17M
	Stockholders Equity
168.82M	168.82M	310.43M	445.48M	654.39M	495.72M
Cash Flow		Free Cash Flow
-105.47M	-117.07M	-288.30M	-241.07M	-114.55M	-63.78M
	Operating Cash Flow
-105.40M	-116.48M	-279.97M	-207.85M	-113.92M	-63.01M
	Investing Cash Flow
45.15M	93.17M	71.68M	143.24M	3.90M	-311.97M
	Financing Cash Flow
873.00K	2.53M	141.88M	10.26M	278.84M	381.16M

Allakos Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 0.25 is below the 20-day moving average (MA) of 0.28, below the 50-day MA of 0.59, and below the 200-day MA of 0.85, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 32.06 is Neutral, neither overbought nor oversold. The STOCH value of 20.50 is Neutral, 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	62 Neutral	$1.52B	―	-9.85%	―	56.60%	-403.56%
ANAB	51 Neutral	$537.90M	―	-182.71%	―	432.03%	14.41%
Sector *	49 Neutral	$6.90B	-0.08	-53.01%	2.43%	24.84%	-3.06%
CRSP	48 Neutral	$3.72B	―	-19.20%	―	-89.95%	-123.71%
ADAP	44 Neutral	$115.17M	―	-53.54%	―	145.37%	57.01%
ALLK	41 Neutral	$22.84M	―	-121.68%	―	―	-5.32%

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.

Allakos Inc. Alters Lease Agreement for Cost Savings

Allakos Inc. has entered into a Lease Termination Agreement with its landlord, significantly altering its lease terms for its San Carlos headquarters. The lease, originally set to expire in 2031, will now end between January and March 2025, costing the company approximately $2.5 million in termination-related expenses. This move is aimed at reducing future rent expenses while aligning with operational needs, as the current lease incurred annual costs of about $11 million.