What happened
Shares of Allakos (ALLK -2.86%) fell 17.3% in February, according to data from S&P Global Market Intelligence. The biotech stock lost ground as investors continued to move out of risky, speculative plays.
In December, Allakos published devastating trial data for its lirentelimab monoclonal antibody treatment for eosinophilic gastrointestinal diseases (EGIDs), and the company's share price has continued to lose ground after its initial, precipitous pullback. Facing a multitude of risk factors, investors have become much more risk averse, and there hasn't been any business-specific developments to suggest an improving outlook for the clinical-stage biotech.
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So what
Allakos' phase 3 Enigma 2 and phase 2/3 KRYPTOS trial data for lirentelimab showed that the monoclonal antibody offered no statistically significant improvements for EGID patients. Lirentelimab had been the core treatment in the company's product pipeline, and the discouraging clinical-trial results have thrown the business's outlook into question.
In addition to high levels of inflation and the prospect of significant interest-rate hikes this year, investors have also had to contend with risks posed by Russia's invasion of Ukraine. Without any significant business news to bolster bullish sentiment, it's not surprising that Allakos stock saw another steep sell-off last month.
Now what
Allakos stock has continued to lose ground in March amid selling pressures impacting the broader market. The biotech company's share price is down roughly 5.3% in the month so far.
Allakos published its fourth-quarter results on March 1, reporting no revenue and a net loss of $94.4 million in the period. The company's net loss was up significantly from the $50.1 million loss it posted in the prior-year period.
Research and development expenses came in at $72.9 million, up from $28.5 million in the prior-year quarter. The company ended the year with $424.2 million in cash, cash equivalents, and marketable securities but will likely need to continue spending in order to figure out a viable path forward for lirentelimab or develop other treatments.
Allakos now has a market capitalization of roughly $282 million.
