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Allakos continues to slide, falls 87.4% premarket following yesterday's announcement that its late-stage studies, KRYPTOS and ENIGMA 2failed to achieve statistical significance.

The studies met their histologic co-primary endpoints but failed to achieve symptomatic endpoints.

In ENIGMA, patients treated with lirentelimab achieved a 10.0-point reduction in Total Symptom Score-6 (TSS-6) at weeks 23-24 from baseline (baseline = 29.5) compared to an 11.5-point reduction in the placebo group (baseline = 27.7; p=0.343).

On the second co-primary endpoint of absolute mean change in patient reported Dysphagia Symptom Questionnaire in KRYPTOS trial, the high-dose group achieved a 17.4-point reduction, the low-dose group achieved an 11.9-point reduction and placebo achieved a 14.6-point reduction.

Following this disappointing result, several analysts lowered their ratings of the stock and slashed the price targets.

William Blair downgraded the stock to Market Perform from Outperform.

Analysts of the firm say, "while we believe lirentelimab has shown clear evidence of histologic activity against eosinophils and mast cells, the failure to achieve co-primary endpoints of patient reported symptoms in both studies raises questions about whether these histologic improvements can translate into clinical improvements."

With lirentelimab performing worse than placebo, there are clearly questions as to why the clean results in Phase II didn’t translate, the analyst notes.

Cowen analyst Joseph Thome has also cut the recommendation on Allakos to Market Perform from Outperform without the price target (PT) pending pipeline clarity.

SVB Leerink analyst Thomas Smith downgraded the stock to Market Perform from Outperform, with PT of $17.

Barclays analyst Carter Gould lowered the firm's PT on Allakos to $8 from $36 and keeps an Underweight rating. The company's lead asset failed in key Phase 3 studies, Gould tells investors in a research note. He views this as the "end game" for lirentelimab.

Morgan Stanley says Allakos' disappointing data increase eosinophilic gastrointestinal diseases (EGIDs) uncertainty.

Jefferies analyst Maury Raycroft cut the recommendation on Allakos to Hold from Buy.

LifeSci Capital analyst Samuel Slutsky downgraded the stock to Market Perform from Outperform.