Executive Summary / Key Takeaways

• Alumis has strategically transformed into a late-stage biopharmaceutical company through its recently completed merger with ACELYRIN, Inc. (SLRN), significantly expanding its pipeline with lonigutamab alongside its lead TYK2 inhibitors, ESK-001 and A-005.
• The company's core strength lies in its proprietary precision data analytics platform, which aims to identify and develop targeted therapies with potentially differentiated profiles, such as the high selectivity and potency claimed for ESK-001.
• Recent financial results for Q1 2025 show a substantial increase in R&D and G&A expenses, reflecting accelerated clinical trial activity for ESK-001 and A-005, as well as costs associated with the merger and operating as a public company.
• While Alumis faced a going concern warning based on its pre-merger cash position as of March 31, 2025, the completed merger significantly improves liquidity, providing an expected cash runway into 2027 and funding multiple upcoming clinical milestones.
• Key catalysts to watch include topline data from the Phase 3 ONWARD psoriasis program in early Q1 2026, results from the Phase 2b SLE trial in 2026, initiation of the Phase 2 MS trial for A-005 in 2H 2025, and the strategic evaluation of the lonigutamab development plan.

Illuminating Immunology: Alumis's Strategic Evolution

Alumis Inc. is a clinical-stage biopharmaceutical company dedicated to revolutionizing the treatment of autoimmune disorders by replacing broad immunosuppression with targeted therapies. Founded in 2021, the company's journey began with a foundational acquisition in March 2021, bringing in the technology that underpins its lead asset, ESK-001. This strategic move established the initial core of Alumis's pipeline and set the stage for its development efforts.

The company's approach is centered around its proprietary precision data analytics platform, designed to identify promising therapeutic targets and accelerate the development of novel medicines. This platform leverages biological insights and a team experienced in precision medicine, aiming to create therapies that offer significant improvements for patients. The output of this platform includes their lead candidates, oral TYK2 inhibitors ESK-001 and A-005, and has also led to the identification of additional preclinical programs.

Alumis's strategic trajectory took a significant turn with its Initial Public Offering (IPO) in July 2024, which, along with a concurrent private placement, injected substantial capital into the company. This funding was crucial for advancing its clinical programs. Most recently, the company completed a definitive merger with ACELYRIN, Inc. on May 21, 2025. This all-stock transaction was strategically designed to create a larger, late-stage biopharma company with a more diversified pipeline and a significantly strengthened financial position, pooling the resources and expertise of both entities.

The Technological Foundation: Precision and Selectivity

At the heart of Alumis's therapeutic strategy are its oral Tyrosine Kinase 2 (TYK2) inhibitors, ESK-001 and A-005. TYK2 is a critical signaling protein involved in the pathways of several pro-inflammatory cytokines, including IL-23, IL-17, and type 1 interferon, which are implicated in a range of immune-mediated diseases. Alumis's inhibitors are designed to modulate these pathways with high selectivity.

ESK-001 is positioned as a next-generation oral TYK2 inhibitor. The company emphasizes its high selectivity and potency, aiming to maximize target inhibition while optimizing tolerability. Compared to competitors like Bristol Myers Squibb (BMY)'s Sotyktu (deucravacitinib), Alumis claims that ESK-001 offers greater selectivity, which could potentially translate to improved efficacy and a more favorable safety profile, including potentially lower rates of certain side effects. While precise, directly comparable quantitative metrics for all aspects of selectivity and potency across all competitors are not publicly detailed, the strategic intent is clear: to offer a best-in-class oral option that provides biologic-like clinical responses. The company is also developing a once-daily modified-release formulation of ESK-001 to potentially improve patient convenience compared to the current twice-daily immediate-release formulation.

A-005 represents another facet of Alumis's TYK2 strategy. It is a CNS-penetrant allosteric TYK2 inhibitor. This is particularly relevant given the genetic association of TYK2 mutations with a protective effect in multiple sclerosis (MS). A-005's ability to cross the blood-brain barrier differentiates it from peripheral-acting TYK2 inhibitors and positions it for potential applications in neuroinflammatory and neurodegenerative diseases, addressing a distinct market segment.

The precision data analytics platform informs the selection and development of these molecules, aiming to match specific patient populations with the therapies most likely to benefit them. This data-driven approach is intended to enhance the probability of clinical success and optimize clinical outcomes, providing a technological moat against competitors relying solely on traditional drug discovery methods.

Pipeline Progress and Operational Footprint

Alumis's pipeline is currently anchored by ESK-001, which is furthest along in development. The company has initiated its pivotal Phase 3 ONWARD clinical program for moderate-to-severe plaque psoriasis, consisting of two parallel global, randomized, double-blind, placebo-controlled 24-week trials (ONWARD1 and ONWARD2), along with a long-term extension study (ONWARD3). Enrollment for the Phase 3 program, involving over 1,700 patients, has been completed. This program is supported by positive data from the Phase 2 STRIDE trial and its long-term open-label extension, which demonstrated robust and sustained clinical responses over 52 weeks, with a safety profile consistent with expectations for a TYK2 inhibitor. Common adverse events observed in the Phase 2 OLE included headaches, upper respiratory tract infections, nasopharyngitis, rash, and nausea. More serious adverse events, including infection and malignancy, were also observed, consistent with the known risks of immune-modulating therapies.

Beyond psoriasis, ESK-001 is also being evaluated in the Phase 2b LUMUS clinical trial for systemic lupus erythematosus (SLE). This trial addresses another significant autoimmune disease where targeted therapies are needed.

The second clinical candidate, A-005, is currently in Phase 1 development. Initial results from the Phase 1 program in healthy volunteers were reported in December 2024. The company plans to initiate a Phase 2 program for A-005 in MS in the second half of 2025, leveraging the rationale for a CNS-penetrant TYK2 inhibitor in this indication.

While Alumis focuses on research and development, it relies heavily on third-party contract research organizations (CROs) to conduct its clinical trials and contract manufacturing organizations (CMOs) to produce its product candidates and supplies. This operational model allows the company to remain lean but introduces dependencies on external partners for execution and quality control. Most suppliers are located outside the U.S., introducing risks related to international trade policies and supply chain disruptions. The company's operations are primarily concentrated in South San Francisco, California, exposing it to regional risks like natural disasters.

Financial Performance and Liquidity Outlook

Alumis's financial profile reflects its stage of development as a clinical-stage biopharmaceutical company. The company has incurred substantial operating losses and negative cash flows since inception, primarily driven by significant investments in research and development. For the three months ended March 31, 2025, Alumis reported a net loss of $99.0 million, a significant increase from the $49.8 million net loss in the same period of 2024.

Operating expenses saw a substantial rise, increasing by 150% to $118.9 million in Q1 2025 from $47.6 million in Q1 2024. This surge was primarily fueled by a 130% increase in research and development expenses, which reached $96.6 million, reflecting the costs associated with advancing the ESK-001 and A-005 clinical programs, including increased spending on CROs, CMOs, and clinical trials. General and administrative expenses also saw a dramatic 296% increase to $22.3 million, largely due to costs related to the merger transaction and the increased overhead of operating as a public company.

Revenue for Q1 2025 totaled $17.4 million, stemming from the upfront payment received as part of the collaboration and license agreement with Kaken Pharmaceutical (4521). This marks the first significant revenue for the company. Interest income also increased to $2.6 million in Q1 2025, benefiting from higher cash and marketable securities balances.

As of March 31, 2025, prior to the completion of the merger, Alumis held $208.7 million in cash, cash equivalents, and marketable securities. Based on its operating plan at that time, the company indicated that these funds would not be sufficient to meet operating and capital requirements for at least 12 months, raising substantial doubt about its ability to continue as a going concern. However, the completed merger with ACELYRIN significantly alters this picture. The combined entity is expected to have a pro forma cash position of approximately $737 million as of December 31, 2024, which is projected to provide a cash runway into 2027. This substantially improved liquidity is a key benefit of the merger, enabling the company to fund its expanded pipeline through multiple anticipated clinical readouts. Despite this, the company acknowledges the need for significant additional capital in the future to fully fund ongoing R&D and potential commercialization efforts.

Competitive Landscape and Positioning

The biopharmaceutical market for immune-mediated diseases is highly competitive, featuring large established players and numerous biotechnology companies. Alumis's TYK2 inhibitors compete directly with other TYK2 inhibitors and indirectly with alternative therapies like biologics and other oral small molecules.

Key competitors in the TYK2 inhibitor space include Bristol Myers Squibb with Sotyktu (deucravacitinib) and Takeda Pharmaceutical (TAK) with TAK-279. BMS's Sotyktu is already approved and commercialized for psoriasis, giving it a significant first-mover advantage and established market share. Takeda's TAK-279 is also in advanced clinical development. Alumis positions ESK-001 as a potentially differentiated next-generation inhibitor, emphasizing its selectivity and potency as potential advantages over existing and competing TYK2 therapies. While BMS and Takeda possess significantly greater financial resources, established commercial infrastructures, and extensive global reach, Alumis aims to compete based on the clinical profile of its candidates.

Indirect competition comes from a range of approved therapies for psoriasis, SLE, and neuroinflammatory diseases, including various biologics (e.g., Johnson & Johnson's (JNJ) Stelara, AbbVie's (ABBV) Skyrizi) and other oral small molecules. These therapies represent the current standard of care and have established efficacy and safety profiles, although they may have limitations in terms of administration (injectables), side effects (broad immunosuppression), or efficacy in certain patient populations. The competitive landscape is further complicated by the emergence of new therapies and ongoing clinical trials by numerous companies.

Alumis's strategy to compete involves leveraging its precision data analytics platform to identify potentially superior targets and develop molecules with differentiated profiles. The development of A-005 as a CNS-penetrant TYK2 inhibitor targets a distinct niche (neuroinflammatory/neurodegenerative diseases) that may face less direct TYK2 competition initially compared to the peripheral inflammatory space. The merger with ACELYRIN adds another asset, lonigutamab, targeting thyroid eye disease, further diversifying the pipeline and potentially reducing reliance on the success of the TYK2 programs alone.

However, Alumis faces significant disadvantages compared to larger competitors, including its limited scale, lack of commercialization experience, and reliance on third parties for manufacturing and clinical trials. Its financial position, while improved by the merger, is still that of a development-stage company requiring future capital raises, unlike the robust cash flow generation of large pharmaceutical companies. The success of Alumis's competitive strategy hinges on demonstrating a superior benefit-risk profile for its product candidates in ongoing and future clinical trials and successfully navigating the complex regulatory and commercialization pathways.

Risks and Challenges

Investing in Alumis involves significant risks inherent in the biopharmaceutical industry. The most prominent risks include the uncertainty of clinical trial outcomes, potential adverse events (SAEs/AEs) that could delay or halt development, and the unpredictable nature of regulatory approval processes. The discontinuation of the uveitis trial for ESK-001 serves as a reminder of the high failure rate in drug development.

The company faces substantial competition from companies with greater resources and approved products. Achieving market acceptance and obtaining favorable pricing and reimbursement for any approved product candidates will be challenging. Reliance on third-party manufacturers and CROs introduces risks related to quality control, supply chain disruptions, and compliance with regulatory standards.

The recent merger with ACELYRIN, while strategically beneficial, introduces integration risks and the potential for unforeseen liabilities or challenges in combining operations and pipelines. While the merger significantly improved liquidity, the company still anticipates needing additional capital in the future, and the ability to raise funds on favorable terms is not guaranteed. Intellectual property protection is critical but subject to challenges, litigation, and evolving patent laws. Furthermore, compliance with complex and changing healthcare laws, data privacy regulations, and international trade policies poses ongoing risks.

Conclusion

Alumis has undergone a significant transformation, evolving from a clinical-stage company focused primarily on its TYK2 platform to a late-stage entity with an expanded pipeline and substantially improved financial footing following the merger with ACELYRIN. The core investment thesis rests on the potential of its precision data analytics platform to yield differentiated therapies, particularly its lead TYK2 inhibitor, ESK-001, and the CNS-penetrant A-005. The addition of lonigutamab through the merger further diversifies the company's therapeutic targets and market opportunities.

While the company's recent financial performance reflects the increased investment required for late-stage clinical development and the costs associated with strategic transactions, the pro forma cash position post-merger provides critical runway to advance its key programs. The upcoming clinical data readouts for the Phase 3 psoriasis program (early Q1 2026) and the Phase 2b SLE trial (2026), along with the initiation of the Phase 2 MS trial for A-005 (2H 2025), represent significant potential catalysts that could validate the company's precision approach and pipeline assets.

However, substantial risks remain, including the inherent uncertainties of clinical success, the competitive intensity of the immunology market, and the need for future financing. Investors should closely monitor the clinical trial results, the company's ability to effectively integrate the acquired assets and operations, and its progress toward demonstrating a clear competitive advantage for its lead candidates in large, established markets dominated by well-resourced players. The success of Alumis's strategy hinges on its ability to translate its technological edge and expanded pipeline into tangible clinical and commercial wins.