Allakos, a Bay Area biotech firm, faced a critical setback as its clinical trial for AK006, intended to treat chronic spontaneous urticaria, yielded disappointing results. The drug failed to surpass placebo effects, prompting Allakos to discontinue its research. In response, the company is laying off 75% of its staff, leaving about 15 employees to manage winding down operations. CEO Robert Alexander indicated a shift towards exploring strategic alternatives, reflecting the difficult landscape for biotech firms following unprofitable trials. Allakos has suffered $1.2 billion in losses and lacks other drug candidates, marking a significant decline for the firm.
Allakos' future depended on a single trial for AK006, which failed to outperform a placebo, leading to a drastic 75% staff layoff.
CEO Robert Alexander expressed disappointment over the trial results and mentioned the company's intention to explore strategic alternatives or wind down.
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