Allakos Inc. [ALLK] Filings

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Emerging growth company

10-Q 1 allk-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission File Number: 001-38582

Allakos Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	45-4798831
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
825 Industrial Road, Suite 500 San Carlos, California	94070
(Address of principal executive offices)	(Zip Code)

(650) 597-5002

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001	ALLK	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 7, 2023, the registrant had 87,476,338 shares of common stock outstanding.

ALLAKOS INC.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Balance Sheets	2
	Statements of Operations and Comprehensive Loss	3
	Statements of Stockholders’ Equity	4
	Statements of Cash Flows	5
	Notes to Unaudited Interim Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II.	OTHER INFORMATION	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

allakos inc.

balance sheets

(in thousands, except per share data)


	September 30,			December 31,
	2023			2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	70,519		$	87,217
Investments		123,389			192,569
Prepaid expenses and other current assets		24,371			29,057
Total current assets		218,279			308,843
Property and equipment, net		34,965			39,144
Operating lease right-of-use assets		24,167			30,225
Other long-term assets		6,084			8,208
Total assets	$	283,495		$	386,420
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	915		$	4,832
Accrued expenses and other current liabilities		22,535			25,206
Total current liabilities		23,450			30,038
Operating lease liabilities, net of current portion		39,002			45,949
Total liabilities		62,452			75,987
Contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value per share; 20,000 shares authorized as of September 30, 2023 and December 31, 2022; no shares issued and outstanding as of September 30, 2023 and December 31, 2022		—			—
Common stock, $0.001 par value per share; 200,000 shares authorized as of September 30, 2023 and December 31, 2022; 87,476 and 85,387 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		87			85
Additional paid-in capital		1,276,954			1,243,408
Accumulated other comprehensive loss		(72	)		(284	)
Accumulated deficit		(1,055,926	)		(932,776	)
Total stockholders’ equity		221,043			310,433
Total liabilities and stockholders’ equity	$	283,495		$	386,420

See accompanying notes to unaudited interim financial statements

Allakos Inc.

Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Operating expenses
Research and development	$	36,749		$	18,438		$	97,107		$	229,693
General and administrative		11,461			13,007			33,966			46,520
Total operating expenses		48,210			31,445			131,073			276,213
Loss from operations		(48,210	)		(31,445	)		(131,073	)		(276,213	)
Interest income		2,590			711			7,965			898
Other expense, net		(6	)		(103	)		(42	)		(1,648	)
Net loss		(45,626	)		(30,837	)		(123,150	)		(276,963	)
Unrealized gain on investments		87			196			212			89
Comprehensive loss	$	(45,539	)	$	(30,641	)	$	(122,938	)	$	(276,874	)
Net loss per common share:
Basic and diluted	$	(0.52	)	$	(0.53	)	$	(1.42	)	$	(4.95	)
Weighted-average number of common shares outstanding:
Basic and diluted		87,115			58,169			86,539			55,905

See accompanying notes to unaudited interim financial statements

Allakos Inc.

Statements of STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2022		85,387	$	85	$	1,243,408		$	(284	)	$	(932,776	)	$	310,433
Stock-based compensation expense		—		—		10,665			—			—			10,665
Issuance of common stock upon exercise of stock options		6		—		26			—			—			26
Issuance of common stock upon 2018 ESPP purchase		144		—		442			—			—			442
Issuance of common stock upon vesting of restricted stock units		881		1		(1	)		—			—			—
Issuance of common stock under the ATM Offering, net of issuance costs		142		—		990			—			—			990
Unrealized gain on investments		—		—		—			296			—			296
Net loss		—		—		—			—			(42,404	)		(42,404	)
Balance at March 31, 2023		86,560	$	86	$	1,255,530		$	12		$	(975,180	)	$	280,448
Stock-based compensation expense		—		—		9,821			—			—			9,821
Issuance of common stock upon vesting of restricted stock units		263		1		(1	)		—			—			—
Unrealized loss on investments		—		—		—			(171	)		—			(171	)
Net loss		—		—		—			—			(35,120	)		(35,120	)
Balance at June 30, 2023		86,823		87		1,265,350			(159	)		(1,010,300	)		254,978
Stock-based compensation expense		—		—		10,534			—			—			10,534
Issuance of common stock upon exercise of stock options		200		—		647			—			—			647
Issuance of common stock upon 2018 ESPP purchase		137		—		423			—			—			423
Issuance of common stock upon vesting of restricted stock units		316		—		—			—			—			—
Unrealized gain on investments		—		—		—			87			—			87
Net loss		—		—		—			—			(45,626	)		(45,626	)
Balance at September 30, 2023		87,476	$	87	$	1,276,954		$	(72	)	$	(1,055,926	)	$	221,043


	Common Stock				Additional Paid-In Capital		Accumulated Other Comprehensive Gain (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2021		54,622	$	54	$	1,058,399	$	(153	)	$	(612,824	)	$	445,476
Stock-based compensation expense		—		—		11,392		—			—			11,392
Issuance of common stock upon exercise of stock options		34		—		104		—			—			104
Issuance of common stock upon 2018 ESPP purchase		42		—		243		—			—			243
Issuance of common stock upon vesting of restricted stock units		63		—		—		—			—			—
Unrealized loss on investments		—		—		—		(316	)		—			(316	)
Net loss		—		—		—		—			(197,023	)		(197,023	)
Balance at March 31, 2022		54,761	$	54	$	1,070,138	$	(469	)	$	(809,847	)	$	259,876
Stock-based compensation expense		—		—		11,761		—			—			11,761
Issuance of common stock upon exercise of stock options		25		—		66		—			—			66
Issuance of common stock upon vesting of restricted stock units		58		—		—		—			—			—
Unrealized gain on investments		—		—		—		209			—			209
Net loss		—		—		—		—			(49,103	)		(49,103	)
Balance at June 30, 2022		54,844	$	54	$	1,081,965	$	(260	)	$	(858,950	)	$	222,809
Stock-based compensation expense		—		—		10,732		—			—			10,732
Issuance of common stock upon exercise of stock options		346		1		492		—			—			493
Issuance of common stock upon 2018 ESPP purchase		62		—		195		—			—			195
Issuance of common stock upon vesting of restricted stock units		59		—		—		—			—			—
Issuance of common stock upon registered direct offering, net		29,882		30		140,561		—			—			140,591
Unrealized gain on investments		—		—		—		196			—			196
Net loss		—		—		—		—			(30,837	)		(30,837	)
Balance at September 30, 2022		85,193	$	85	$	1,233,945	$	(64	)	$	(889,787	)	$	344,179

See accompanying notes to unaudited interim financial statements

Allakos Inc.

Statements of Cash Flows

(in thousands)

(unaudited)


	Nine Months Ended
	September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(123,150	)	$	(276,963	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,594			5,560
Stock-based compensation		31,020			33,885
Net amortization (accretion) of premiums and discounts on investments		(4,324	)		2,335
Noncash lease expense		1,106			2,459
Loss on disposal of property and equipment		3			28
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		4,790			12,569
Other long-term assets		2,124			(1,051	)
Accounts payable		(3,709	)		(8,820	)
Accrued expenses and other current liabilities		(2,372	)		157
Operating lease liabilities, net of current portion		(2,294	)		(3,344	)
Net cash used in operating activities		(92,212	)		(233,185	)
Cash flows from investing activities
Purchases of investments		(139,388	)		(139,958	)
Proceeds from sales of investments		—			19,989
Proceeds from maturities of investments		213,000			270,000
Proceeds from sale of property and equipment		—			1,169
Purchases of property and equipment		(626	)		(8,042	)
Net cash provided by investing activities		72,986			143,158
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance costs		990			140,591
Proceeds from exercise of stock options		673			663
Proceeds from issuance of common stock under the 2018 ESPP		865			438
Net cash provided by financing activities		2,528			141,692
Net increase (decrease) in cash, cash equivalents and restricted cash		(16,698	)		51,665
Cash, cash equivalents and restricted cash, beginning of period		88,689			155,097
Cash, cash equivalents and restricted cash, end of period	$	71,991		$	206,762
Supplemental disclosures
Noncash investing and financing items:
Noncash adjustments to right-of-use assets	$	(5,617	)	$	—
Right-of-use assets obtained in exchange for lease obligations	$	665		$	1,216
Decrease in payables related to purchase of property and equipment	$	(208	)	$

Allakos Inc. [ALLK] Filings
10-Q	[2023-11-13]
10-Q	[2023-08-09]
10-Q	[2023-05-09]
10-K	[2023-03-06]
10-Q	[2022-11-07]
10-Q	[2022-08-04]
10-Q	[2022-05-06]
10-K	[2022-03-01]
10-Q	[2021-11-08]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-03-01]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-11]
10-K	[2020-02-25]
10-Q	[2019-11-12]
10-Q	[2019-08-05]
10-Q	[2019-05-08]
10-K	[2019-03-14]
10-Q	[2018-11-08]
10-Q	[2018-08-29]
S-1	[2018-06-22]