Small Biotech Doubles as Drug Shows Promise in Rare Diseases
(Bloomberg) -- Shares of Allakos Inc. more than doubled after a mid-stage study of its medicine in a pair of rare diseases showed significant improvements for patients.
The U.S. drugmaker surged the most on record as analysts touted the results, bringing its market capitalization to $2.8 billion from $1.3 billion at the close of trading on Friday. William Blair's Tim Lugo said the company is taking “a leadership position in the eosinophilic gastrointestinal disease market.” The study assessed the medicine in 59 patients with eosinophilic gastritis and/or eosinophilic gastroenteritis, rare diseases that impact the stomach and gastrointestinal tract.
Bearish bets against the Palo Alto, California-based company remain elevated compared to peers, with short interest at 28% of float, according to financial analytics firm S3 Partners, down from its year highs of 31% in January.
Wall Street may be on the lookout for the company to take advantage of the record session with the company reporting cash and equivalents of $153.1 million in earnings this morning. Allakos hasn't offered shares since a July public offering last year. A potential offering could be in the range of $250 million and $300 million given the stock's market value.
To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk
©2019 Bloomberg L.P.
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