ALLK

Allakos Inc

Healthcare


Presented:05/29/2020
Price:$65.00
Cap:$3.17B
Current Price:$0.63
Cap:$0.06B

Presented

Date05/29/2020
Price$65.00
Market Cap$3.17B
Ent Value$1.69B
P/E RatioN/A
Book Value$9.80
Div Yield0%
Shares O/S48.77M
Ave Daily Vol366,725
Short Int40.48%

Current

Price$0.63
Market Cap$0.06B
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.

Publicly traded companies mentioned herein: Allakos Inc (ALLK), astraZeneca plc (AZN), Regeneron Pharmaceuticals Inc (REGN), Sanofi SA (SNY)

Highlights

The presenter is short Allakos (ALLK), a clinical-stage biotech company with published phase 2 trial results for antolimab (AK002), an investigational antibody that targets Siglec-8 (an inhibitory receptor found on mast cells and eosinophils). AK002 is being studied for the treatment of eosinophilic gastrointestinal diseases (EGIDs), namely eosinophilic gastritis (EG), eosinophilic gastroenteritis (EGE), and eosinophilic esophagitis (EoE) - i.e., inflammation of the stomach, small intestine, and/or esophagus, respectively. While the top-line phase 2 ENIGMA trial results were technically positive/statistically significant, and ALLK has initiated subsequent studies for EG/EGE and EoE, the presenter is skeptical of the whole program - from trial design and execution to the quality of the data. He likes the risk/reward for the short position with the stock trading in the mid-$60s and recently added to the position. The combination of feedback from key opinion leaders (KOLs) and patients on AK002, potential fraud risk, competition, and a plethora of other red flags give him confidence that the short position can be held for an extended period, allowing for enough time to see the weight of all the issues outlined to drive the stock price materially lower.

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