GlobeNewswire Inc | Aug 10, 2020 08:00AM EDT

August 10, 2020

REDWOOD CITY, Calif., Aug. 10, 2020 (GLOBE NEWSWIRE) -- Allakos Inc. (the Company) (Nasdaq: ALLK), a biotechnology company developing AK002 for the treatment of eosinophil and mast cell-related diseases, today reported financial results for the second quarter endedJune 30, 2020 and provided an update of its ongoing development activities.

Business Updates

-- Patient enrollment was initiated in a randomized, double-blind, placebo-controlled Phase 3 study of AK002 in patients with eosinophilic gastritis (EG) and/or eosinophilic duodenitis (EoD). Topline data are expected in the second half of 2021. -- Patient enrollment was initiated in a randomized, double-blind, placebo-controlled Phase 2/3 study of AK002 in patients with eosinophilic esophagitis (EoE). Topline data are expected in the second half of 2021. -- The Phase 1 safety, tolerability and pharmacokinetics study of the subcutaneous formulation of AK002 is fully enrolled. Results are expected in the second half of 2020. -- The non-interventional study examining the prevalence of EG, EoD, and mast cell gastrointestinal disease (MGID) in patients with chronic functional gastrointestinal disease is fully enrolled. Results are expected in the second half of 2020. -- Announced positive clinical safety and efficacy results from a six-month, open-label Phase 1 study of AK002 in patients with MGID in March 2020. -- Announced positive interim safety and efficacy results from the open-label, long-term extension component of the ENIGMA study with AK002 in patients with EG and/or EoD. The results were accepted for oral presentation and presented virtually at the Digestive Disease Week (DDW) Annual Meeting in May 2020. -- The nonproprietary (generic) name of AK002 was changed from antolimab to lirentelimab as a result of trademark issues identified outside of the United States. Lirentelimab has been adopted by the United States Adopted Names (USAN) Council and World Health Organization (WHO) International Nonproprietary Names (INN) Program.

Second Quarter 2020 Financial Results

Research and development expenses were $28.3 million in the second quarter of 2020 as compared to $14.1 million in the same period in 2019, an increase of $14.2 million.

General and administrative expenses were $12.1 million in the second quarter of 2020 as compared to $5.9 million in the same period in 2019, an increase of $6.2 million.

Allakos reported a net loss of $39.3 million in the second quarter of 2020 as compared to $19.1 million in the same period in 2019, an increase of $20.2 million. Net loss per basic and diluted share was $0.80 for the second quarter of 2020 compared to $0.44 in the same period in 2019.

Allakos ended the second quarter of 2020 with $454.9 million in cash, cash equivalents and marketable securities.

AboutAllakos

Allakos is a clinical-stage biotechnology company developing antibodies that target immunomodulatory receptors present on immune effector cells involved in allergic, inflammatory, and proliferative diseases. The Companys lead antibody, lirentelimab (AK002), is being evaluated in a Phase 3 study in eosinophilic gastritis (EG) and/or eosinophilic duodenitis (EoD) and a Phase 2/3 study in eosinophilic esophagitis (EoE). Lirentelimabtargets Siglec-8, an inhibitory receptor selectively expressed on human mast cells and eosinophils. Inappropriately activated eosinophils and mast cells have been identified as key drivers in a number of severe diseases affecting the gastrointestinal tract, eyes, skin, lungs and other organs. Lirentelimab has been tested in multiple clinical studies, in which lirentelimab eliminated blood and tissue eosinophils, inhibited mast cells and improved disease symptoms in patients with eosinophilic gastritis and/or eosinophilic duodenitis, eosinophilic esophagitis, mast cell gastrointestinal disease, severe allergic conjunctivitis, chronic urticaria and indolent systemic mastocytosis. For more information, please visit the Company's website at www.allakos.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, Allakos progress and business plans. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from current expectations and beliefs, including but not limited to: Allakos early stages of clinical drug development; Allakos ability to timely complete clinical trials for, and if approved, commercialize lirentelimab (AK002), its lead compound; Allakos ability to obtain required regulatory approvals for its product candidates; uncertainties related to the enrollment of patients in its clinical trials; Allakos ability to demonstrate sufficient safety and efficacy of its product candidates in its clinical trials; uncertainties related to the success of later-stage clinical trials, regardless of the outcomes of preclinical testing and early-stage trials; market acceptance of Allakos product candidates; uncertainties related to the projections of the size of patient populations suffering from the diseases Allakos is targeting; Allakos ability to advance additional product candidates beyond lirentelimab (AK002); Allakos ability to obtain additional capital to finance its operations; and other important risk factors set forth in Allakos most recent Annual Report on Form 10-K filed with the SEC on February 25, 2020, Quarterly Report on Form 10-Q filed with the SEC on August 10, 2020 and future reports to be filed with the SEC. These documents contain and identify important factors that could cause the actual results for Allakos to differ materially from those contained in Allakos forward-looking statements. Any forward-looking statements contained in this press release speak only as of the date hereof, and Allakos specifically disclaims any obligation to update any forward-looking statement, except as required by law. These forward-looking statements should not be relied upon as representing Allakos views as of any date subsequent to the date of this press release.

Source: Allakos Inc.

ALLAKOS INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share data)(unaudited)

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Operating expenses Research and $ 28,346 $ 14,111 $ 46,631 $ 29,209 developmentGeneral and 12,058 5,946 23,646 11,775 administrativeTotal operating 40,404 20,057 70,277 40,984 expensesLoss from operations (40,404 ) (20,057 ) (70,277 ) (40,984 )Interest income, net 1,284 971 3,273 2,001 Other income (expense), (172 ) 14 (112 ) (42 )netNet loss (39,292 ) (19,072 ) (67,116 ) (39,025 )Unrealized gain (loss)on (1,219 ) 84 650 129 marketablesecurities,net of taxComprehensive loss $ (40,511 ) $ (18,988 ) $ (66,466 ) $ (38,896 )Net loss per common share:Basic and diluted $ (0.80 ) $ (0.44 ) $ (1.38 ) $ (0.91 )Weighted-average numberof commonshares outstanding:Basic and diluted 48,816 43,115 48,753 42,868

ALLAKOS INC. CONDENSED BALANCE SHEETS (in thousands)

June 30, December 31, 2020 2019 (unaudited) Assets Current assets: Cash and cash equivalents $ 153,898 $ 38,367 Investments in marketable securities 301,048 457,534 Prepaid expenses and other current assets 3,336 3,969 Total current assets 458,282 499,870 Property and equipment, net 7,703 8,410 Operating lease right-of-use assets 5,633 5,775 Other long-term assets 2,839 2,839 Total assets $ 474,457 $ 516,894 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 9,617 $ 5,963 Accrued expenses and other current liabilities 9,962 7,098 Total current liabilities 19,579 13,061 Other long-term liabilities 7,875 8,112 Total liabilities 27,454 21,173 Stockholders' equity: Common stock 49 48 Additional paid-in capital 702,767 685,020 Accumulated other comprehensive gain 787 137 Accumulated deficit (256,600 ) (189,484 )Total stockholders? equity 447,003 495,721 Total liabilities and stockholders? equity $ 474,457 $ 516,894

Investor Contact:Adam Tomasi, President and COOir@allakos.com

Media Contact:Denise Powelldenise@redhousecomms.com