Allakos Inc.

We believe that the Menlo Park Lease will be sufficient for our needs over the next twelve months.

• Our decision to discontinue our research and development efforts may not result in the anticipated savings and could disrupt our business.
• Our ability to consummate a strategic transaction of any kind depends on our ability to retain our employees required to explore and consummate a strategic transaction as previously announced.
• We are a clinical stage biotechnology company and have a limited operating history and no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.
• We have incurred significant net losses since inception and we expect to continue to incur significant net losses for the foreseeable future.
• Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve a number of objectives.
• We may require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may not be able to pursue our business strategies and/or we may be forced to delay, reduce and/or eliminate any drug development program.
• If we fail to maintain compliance with the minimum listing requirements, our common stock will be subject to delisting. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if our common stock is delisted.
• We are dependent on the success of our product candidates. If we are unable to obtain approval for and commercialize one of our product candidates for one or more indications in a timely manner, our business could be materially harmed.
• If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.
• The clinical trials of our product candidates may not adequately demonstrate safety and efficacy to the satisfaction of regulatory authorities or otherwise produce positive results, which would prevent or delay development, regulatory approval and commercialization.
• The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or comparable foreign regulatory authorities.
• Our product candidates may not achieve adequate market acceptance among physicians, hospitals, patients, healthcare payors and others in the medical community necessary for commercial success.
• The sizes of the patient populations suffering from some of the diseases we are targeting are small and based on estimates that may not be accurate.
• Our business will be impacted by our ability to advance additional product candidates into clinical development and through to regulatory approval and commercialization. Our product candidates are at early stages of development and may fail in development or suffer delays that adversely affect their commercial viability.
• Any product candidates we develop may become subject to unfavorable third-party reimbursement practices and pricing regulations.
• If our competitors develop and market products that are more effective, safer or less expensive than our product candidates, our commercial opportunities will be negatively impacted.
• Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition.
• The regulatory approval processes of the FDA, EMA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.
• We may be unable to obtain U.S. or foreign regulatory approval and, as a result, unable to commercialize our product candidates.
• Our clinical trials may reveal significant adverse events, toxicities or other side effects and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of our product candidates.
• The FDA, EMA and applicable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction.
• Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
• Even if our product candidates receive regulatory approval, they will be subject to significant post-marketing regulatory requirements.
• We may not be able to obtain orphan drug designation or obtain or maintain orphan drug exclusivity for our product candidates and, even if we do, that exclusivity may not prevent the FDA or the EMA from approving competing products.
• Although we may seek a breakthrough therapy designation for one or more of our product candidates, we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process.
• We may face difficulties from changes to current regulations and future legislation.
• If we fail to comply with applicable U.S. and foreign privacy and data protection laws and regulations, we may be subject to liabilities that adversely affect our business, operations and financial performance.
• Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to, among other things, criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
• Our business may become subject to economic, political, regulatory and other risks associated with international operations directly or indirectly. A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.
• Our success is highly dependent on the services of our Chief Executive Officer, Dr. Robert Alexander, and our President, Dr. Adam Tomasi, and our ability to attract and retain other highly skilled executive officers and employees.
• If we are unable to establish sales or marketing capabilities or enter into agreements with third-parties to sell or market our product candidates, we may not be able to successfully attain commercial success through the sale and marketing of our product candidates that obtain regulatory approval.
• If we are unable to obtain or protect intellectual property rights, we may not be able to effectively monetize such rights.
• We may not be able to protect our intellectual property rights throughout the world.
• Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• If our trademark and tradenames are not adequately protected, then we may not be able to build name recognition in our markets and our business may be adversely affected.
• If we breach the license agreements related to our product candidates, we could lose the ability to continue the development and commercialization of our product candidates.
• Third-parties may initiate legal proceedings against us alleging that we infringe their intellectual property rights or we may initiate legal proceedings against third-parties to challenge the validity or scope of intellectual property rights controlled by third-parties, the outcome of which would be uncertain and could have an adverse effect on the success of our business.
• We may be subject to claims by third-parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
• Our inability to protect our confidential information and trade secrets would harm our business and competitive position.
• We may need to rely on third-parties to conduct our clinical trials and those third-parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies.
• We may contract with third-parties for the production of our product candidates for preclinical studies and for commercialization. This reliance on third-parties increases the risk that we will not have sufficient quantities of our product candidates or drugs or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
• Changes in methods of product candidate manufacturing or formulation may result in additional costs, delays or have unintended impacts to the development of our product candidates.
• The manufacture of biologics is complex and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.
• If we decide to establish collaborations, but are not able to establish those collaborations, we may have to alter our development and commercialization plans.
• Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
• The market price of our stock may continue to be volatile, which could result in substantial losses for investors.
• Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance.
• Raising additional capital may restrict our operations or require us to relinquish rights to our technologies or product candidates, and if we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.
• Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
• We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention.
• We have not paid and do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.
• Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock.
• Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
• If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business.
• Failure to comply with anti-bribery and anti-corruption laws and anti-money laundering laws, and similar laws, could subject us to penalties and other adverse consequences.
• We are subject to various governmental export control and trade sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate these controls.
• We may experience disruptions and delays or incur financial damages as a result of system failures or security breaches or incidents.
• If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
• If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.
• Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
• Our operations are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure, terrorist activity and other events beyond our control, which could harm our business.
• Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
• Changes in tax laws or in their implementation or interpretation may adversely affect our financial condition, results of operations, and cash flows.