On Wednesday, Piper Sandler maintained its Overweight rating and $7.00 price target for Allakos Inc . (NASDAQ: NASDAQ:ALLK), following the release of encouraging Phase 1 clinical data for its drug candidate AK006.
The drug demonstrated strong safety and tolerability, as well as promising pharmacokinetics, with a 21-day half-life at the 720 mg intravenous dose. Moreover, high receptor occupancy was observed in human volunteer skin biopsies, suggesting the drug’s active engagement with its target.
The company reported that doses of 20 mg or greater achieved an average Siglec-6 receptor occupancy of over 90% at Day 29. Piper Sandler expressed a positive outlook, stating that these results position AK006 competitively and validate its activity, setting the stage for successful upcoming trials. The firm anticipates that this data will increase investor interest in Allakos, particularly in anticipation of further data releases.
Allakos is expected to release additional data from human volunteer subcutaneous trials in the third quarter of 2024, followed by intravenous chronic spontaneous urticaria (CSU) data by the end of 2024. Piper Sandler's commentary suggests that the latest findings bolster confidence in the potential of AK006 to effectively reach and influence skin tissue mast cells, which is a promising sign for its development.
The positive Phase 1 data for AK006 appears to be a significant milestone for Allakos, as it provides early evidence of the drug’s safety profile and mechanism of action. With the upcoming trial results, investors are likely to closely monitor the progress of AK006 as it moves through the clinical development pipeline.
Piper Sandler's reiterated Overweight rating and price target reflect an optimistic view of Allakos Inc.'s trajectory based on the recent clinical findings.
"In other recent news, Allakos Inc. reported a higher than expected net loss of $71 million in the first quarter of 2024, primarily due to a non-cash impairment charge. Despite this, Allakos maintains financial stability with $139 million in cash reserves, projected to sustain operations until mid-2026. The biotechnology firm is developing its primary candidate, AK006, designed to treat chronic spontaneous urticaria.
In addition, Allakos announced positive outcomes from a Phase 1 study of AK006, showing the drug was well-tolerated with no serious adverse events reported. Allakos has initiated a second Phase 1 trial with a cohort of patients with chronic spontaneous urticaria, with results expected by the end of 2024.
JMP Securities analysts have maintained a 'MARKET OUTPERFORM' rating for Allakos, citing the potential of AK006 to differentiate itself from competitors. These are recent developments within the company."
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