Allakos drops lead asset after midphase flops join litany of letdowns, halves headcount

Allakos drops lead asset after midphase flops join litany of letdowns, halves headcount

Allakos is giving up on lirentelimab after the serial flop racked up another pair of failures. The biotech responded by laying off half of its employees, continuing the early-year upheaval that has seen Aclaris and TransCode Therapeutics part ways with their CEOs.

California-based Allakos dropped lirentelimab after seeing data from a phase 2 trial in atopic dermatitis, a common form of eczema, and a phase 2b study in chronic spontaneous urticaria (CSU). Lirentelimab binds to Siglec-8 on mast cells and eosinophils, cells implicated in a range of diseases. Allakos identified the mechanism as a way to inhibit mast cells and deplete eosinophils, but failed to show the approach improves outcomes in three phase 3 trials—and just added two midphase studies to its list of flops.

In the atopic dermatitis trial, 23% of patients on lirentelimab had a 75% or greater improvement in eczema area and severity, compared to 18% of their counterparts on placebo, causing the study to miss its primary endpoint. Similarly, the reduction in weekly urticaria activity was no better on lirentelimab, 27%, than placebo, 26%, in the CSU study. The trials missed secondary endpoints too. Allakos’ stock fell 56% to $1.33 in premarket trading.

Facing a pair of comprehensive failures, Allakos has decided to stop development of lirentelimab and put its remaining $171 million into AK006 and preclinical programs. The cessation of work on lirentelimab led Allakos to outline plans to halve its headcount, an action that will extend the biotech’s runway into the middle of 2026 and position it to gather data on its new lead candidate.

AK006 targets Siglec-6, a receptor found on mast cells. While the candidate has a similar mechanism, and is targeting similar indications, to the failed lirentelimab, Allakos has early evidence that it triggers broader and deeper mast cell inhibition. Allakos is currently running a single and multiple ascending dose trial in healthy volunteers and pitting AK006 against placebo in a phase 1 CSU trial.

Allakos ended 2022 with 123 full-time employees, having reduced its headcount by 35% in the first quarter. While Robert Alexander, Ph.D., led Allakos through the early restructuring and remains in the top job, some of Alexander’s peers haven’t been so lucky when finding themselves in similar positions this week.

For example, Douglas Manion has “mutually agreed” with Aclaris to step down as CEO, effective immediately. Manion is hitting the exit six days after a phase 2b eczema trial left investors underwhelmed despite meeting its primary endpoint, and four weeks after laying off almost half of the biotech’s staff in the wake of a phase 2b flop in rheumatoid arthritis.

Neal Walker, Aclaris’ co-founder, is filling the CEO role on an interim basis. Walker will oversee a strategic review that will consider the best use of the biotech’s $182 million. Aclaris is looking for a partner for the eczema drug candidate.

TransCode Therapeutics is also under interim leadership, with co-founder and CEO Michael Dudley retiring as part of the company’s own restructuring. The biotech reduced its headcount from 19 to 11 last year.

Tom Fitzgerald, chief financial officer at TransCode, will lead the slimmed-down team as interim CEO, with Philippe Calais, Ph.D., providing support as executive chairman. Zdravka Medarova, Ph.D., is moving from chief technology to chief scientific officer and will “become increasingly active in partnership and collaboration discussions.”

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