Allakos Buy Rating: Clinical Promise and Financial Stability Drive Positive Outlook

JMP Securities analyst Jonathan Wolleben reiterated a Buy rating on Allakos (ALLK – Research Report) today and set a price target of $3.00.

Jonathan Wolleben has given his Buy rating due to a combination of factors surrounding Allakos’s promising clinical developments and financial position. The upcoming clinical data for AK006 is highly anticipated and is expected to act as a major catalyst for the company’s stock performance. Wolleben specifically points out the potential for the drug’s safety profile to be a differentiating factor, as it enters Phase 1 trials with hopes of avoiding safety concerns that have affected other candidates in the chronic spontaneous urticaria (CSU) space. Furthermore, innovative approaches in the trials, such as measuring receptor occupancy and ex vivo mast cell activation, could provide early insights into AK006’s effectiveness.

Financially, Allakos appears to be on solid ground with sufficient cash reserves to sustain operations into mid-2026, which supports the company’s efforts to develop AK006 without immediate financial pressure. The company’s proactive financial management, coupled with what Wolleben perceives as strong potential for AK006, has informed his positive outlook. The expected data readouts throughout 2024, particularly the end-of-year results from the CSU patient cohort, are seen as pivotal moments that could significantly boost investor confidence and drive the stock’s value upward, warranting the Buy rating.

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Allakos (ALLK) Company Description:

Allakos, Inc. engages in the development of therapeutic antibodies. Its primary product is AK002, a monoclonal antibody used for the treatment of various eosinophil and mast cell related diseases such as eosinophilic gastritis, urticaria, severe allergic conjunctivitis, and indolent systemic mastocytosis. The company was founded by Christopher Bebbington, Nenad Tomasevic, Bruce S. Bochner, and Robert Schleimer in 2012 and is headquartered in Redwood, CA.