SOUTH SAN FRANCISCO - Alector, Inc. (NASDAQ:ALEC), a biotech company focused on neurodegenerative diseases, announced today that its Phase 2 clinical trial, INVOKE-2, did not meet its primary endpoint in treating early Alzheimer's disease. The trial evaluated the efficacy of AL002, which showed sustained target engagement but failed to slow clinical progression as measured by the Clinical Dementia Rating Sum of Boxes. Secondary endpoints, including other clinical and functional measures, as well as Alzheimer's fluid biomarkers and amyloid PET imaging, did not show favorable effects of the treatment.
The trial's findings also reported instances of MRI changes resembling amyloid-related imaging abnormalities (ARIA) and infusion-related reactions, primarily in participants receiving AL002. Based on these results, Alector has decided to discontinue the long-term extension study of the drug.
Despite the setback, Alector's Chief Medical (TASE:PMCN) Officer, Gary Romano, M.D., Ph.D., emphasized the company's commitment to exploring TREM2 biology and furthering the development of treatments for neurodegenerative diseases. Alector expressed gratitude to the trial participants, investigators, and caregivers and plans to share detailed results with the scientific community to aid in the understanding of Alzheimer's disease.
In its strategic efforts to focus on neurodegenerative therapies, Alector is reducing its workforce by approximately 17% and continuing to develop its progranulin-elevating programs, latozinemab and AL101/GSK4527226, in collaboration with GSK. The pivotal INFRONT-3 Phase 3 clinical trial of latozinemab is expected to provide topline data in late 2025 or early 2026. Additionally, the PROGRESS-AD Phase 2 clinical trial of AL101/GSK4527226 has enrolled over one-third of its target participants.
Alector also continues to advance its proprietary blood-brain barrier technology platform, Alector Brain Carrier (ABC), which aims to improve the delivery and efficacy of therapeutics for neurological conditions.
As of September 30, 2024, Alector reported having $457.2 million in cash, cash equivalents, and investments, projecting a financial runway through 2026. Further financial guidance is expected to be provided in the upcoming fourth-quarter and full-year earnings conference call.
This news is based on a press release statement from Alector, Inc.
In other recent news, Alector Inc (NASDAQ:ALEC). has been the subject of several significant developments. The company reported its second-quarter results, which have led to Mizuho (NYSE:MFG) Securities maintaining an Outperform rating on the stock. Similarly, TD Cowen has also maintained a Buy rating, citing the upcoming trial data as pivotal for Alector's progress. In addition, Goldman Sachs (NYSE:GS) reaffirmed its Sell rating on shares of Alector, maintaining a price target of $4.00, focusing on the upcoming Phase 2 results from the INVOKE-2 study.
Alector has secured a credit facility of $50 million from Hercules Capital (NYSE:HTGC) Inc., aimed at supporting the company's ongoing research and development efforts. The initial draw of $10 million has been received, with the option of an additional $15 million available through June 2026 and a further $25 million subject to lender approval.
In terms of governance, shareholders elected Louis J. Lavigne, Jr., Richard H. Scheller, Ph.D., and Mark Altmeyer as Class III directors at the 2024 annual meeting. Ernst & Young LLP was ratified as Alector's independent accounting firm. These are among the recent developments that have been shaping the course of the company.
InvestingPro Insights
In light of Alector's recent clinical trial setback, InvestingPro data provides additional context to the company's financial situation. As of the latest available data, Alector's market capitalization stands at $389.77 million, reflecting the market's current valuation of the company following the disappointing INVOKE-2 trial results.
Despite the challenges faced in its Alzheimer's disease program, InvestingPro Tips highlight that Alector holds more cash than debt on its balance sheet, with liquid assets exceeding short-term obligations. This financial cushion aligns with the company's reported $457.2 million in cash and investments, supporting their projected runway through 2026.
However, investors should note that Alector is quickly burning through cash, a common characteristic of biotech companies investing heavily in research and development. This is particularly relevant given the company's decision to reduce its workforce and focus on other pipeline candidates.
The InvestingPro data also reveals that Alector's revenue for the last twelve months was $61.51 million, with a concerning revenue growth of -36.14% over the same period. This decline in revenue, coupled with the recent trial failure, may explain why 6 analysts have revised their earnings downwards for the upcoming period, as indicated by another InvestingPro Tip.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Alector, providing a deeper understanding of the company's financial health and market position in these challenging times for the biotech sector.
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