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Why Allakos Stock is Crashing Today


The Key Points

Allokos stated that lirentelimab failed two clinical trials to meet the co-primary endpoints.

The company hopes to identify a way forward for the drug to treat eosinophilic gastro diseases.

Allokos continues to study the drug for other indications.

What happened?

As of Wednesday morning's 10:17 ET, shares of Allakos (NASDAQ :ALLK) were 88% lower. This huge drop occurred after Allakos announced the results of its phase 3 Enigma 2 clinical study evaluating lirentelimab and its phase 2/3 Kryptos phase 2/3 clinical study evaluating lirentelimab.

Allakos stated that both clinical trials met their histologic coprimary endpoints. However, statistically significant improvements in patient-reported symptoms were not achieved by either study.

Scientists are often concerned by their expressions.

What are you waiting for?

Because the co-primary endpoint missedes were not even close, the biotech stock plummeted. This is especially concerning because Allokos has only one pipeline candidate for clinical development, lirentelimab.

Patients who were treated with a placebo in the Enigma 2 trial reported greater absolute changes in their six-symptom total symptoms score (TSS). This was in comparison to patients who received lirentelimab. The Kryptos trial, which involved patients who received a low dose of drug, showed a similar result. The high dose of lirentelimab showed greater improvements in symptoms than patients who received a placebo. However, it was not statistically significant.

The executives at Allakos didn't spin the results as being positive. Robert Alexander, CEO of Allakos, stated that "we are deeply disappointed that their studies failed to achieve their symptomatic endspoints." Craig Paterson, chief medical officer, called the results "surprising" and "disappointing."

What now?

Paterson said that Allokos plans to "at present" continue to analyze the data from the two studies to determine a path forward to lirentelimab's use in the treatment of eosinophilic gastro diseases. The company plans to develop a subcutaneous drug version that targets atopic dermatitis and chronic spontaneous urticaria.

This article is the author's opinion. He or she may not agree with the official recommendation of a Motley Fool premium advisory services. We're motley! We are all different!

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