Allakos Inc. Class Action Lawsuit
- Company Name
- Allakos Inc.
- Stock Symbol
- Class Period
- August 5, 2019 to December 17, 2019
- Northern District of California
On March 10, 2020, the Allakos Inc. securities class action lawsuit was filed charging Allakos and certain of its officers with violations of the Securities Exchange Act of 1934. The Allakos securities class action lawsuit was commenced in the Northern District of California on behalf of purchasers of Allakos securities between August 5, 2019 and December 17, 2019 (the “Class Period”) and is captioned Kim v. Allakos Inc., No. 20-cv-01720.
Allakos is a clinical stage biopharmaceutical company that focuses on developing therapeutic antibodies targeting allergic, inflammatory, and proliferative diseases. Allakos is developing AK002 for the treatment of eosinophilic gastritis and eosinophilic gastroenteritis, urticaria, indolent systemic mastocytosis, and severe allergic conjunctivitis. On August 5, 2019, Allakos issued a press release announcing that AK002 had met all pre-specified primary and secondary endpoints in its Phase 2 clinical trial (the “ENIGMA Trial”).
The Allakos securities class action lawsuit alleges that defendants made false and misleading statements and/or failed to disclose adverse information regarding the ENIGMA Trial, including that the trial was poorly designed and not well-controlled, that Allakos had cherry-picked timeframes to engineer results and used superficial endpoints relative to FDA guidance, that Allakos had misrepresented the number of adverse incidents that occurred and failed to report key data, and that, as a result, defendants’ public statements regarding the Company’s business and prospects were materially false and misleading at all relevant times.
On December 18, 2019, Seligman Investments published a report entitled “A Suspect Biotech with a Phase 2 Farce, Incredulous Trial Investigators, and Warning Signs of Potential Fraud.” The report identified several concerns regarding the ENIGMA Trial, including that Allakos’s role in running the study itself rendered the purportedly randomized and double-blind study essentially un-blinded; that Allakos allowed steroid use in a liberal, widespread manner, rendering the results utterly flawed and compromised; that Allakos’s representation of only one drug-related serious adverse event conflicted with numerous Facebook posts by trial participants; and that Allakos’s endpoints were superficial relative to competing trials and FDA guidance. On this news, the price of Allakos’s stock fell by nearly 10%.
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