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1. Company Snapshot

1.a. Company Description

Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases.Its products include AL001, a humanized recombinant monoclonal antibody, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases.The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease; and AL003, which is in Phase I clinical trial for the treatment of Alzheimer's disease.


In addition, its products in development stage include AL044 that targets MS4A4A, a risk gene for Alzheimer's disease.Alector, Inc.has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases.


The company was founded in 2013 and is headquartered in South San Francisco, California.

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1.b. Last Insights on ALEC

Alector's recent performance was negatively driven by the failure of its AL002 program, leading to a downgrade by Bank of America Securities, citing a lack of catalysts. The company's Q4 earnings report, while beating revenue estimates, was overshadowed by a quarterly loss of $0.02 per share. Additionally, the company's pipeline progress, including the anticipated topline data from the INFRONT-3 Phase 3 clinical trial, is not expected until Q4 2025, leaving a gap in near-term catalysts.

1.c. Company Highlights

2. Alector's Earnings Report: Progress in Neurodegenerative Disease Treatments

Alector's financial performance was highlighted by an EPS of -$0.3, beating estimates of -$0.45. The company's cash position stands at $307.3 million, expected to provide a runway into the second half of 2027. Collaboration revenue is guided to be between $13-18 million, with total R&D expenses projected to be between $130-140 million and total G&A expenses between $55-65 million.

Publication Date: Aug -26

📋 Highlights
  • INFRONT-3 Trial Progress: Phase III trial for latozinemab in FTD-GRN is 90% powered to detect a 40% slowing of disease progression, with top-line data expected by mid-Q4 2025.
  • Financial Runway: $307.3 million in cash, providing operational runway into the second half of 2027, with R&D expenses projected at $130-140 million in 2024.
  • AL101 Alzheimer’s Trial: Enrollment completed in April 2024 for early Alzheimer’s disease trial, with trial completion expected in 2026.
  • Regulatory Alignment: FDA approved a sample size of 103 patients for INFRONT-3, confirmed in 2023, to detect a 25% reduction in cognitive decline.

Clinical Program Updates

The company's most advanced clinical program, INFRONT-3, a Phase III trial evaluating latozinemab in patients with FTD-GRN, is ongoing, with top-line data expected by mid-Q4 2025. The trial is approximately 90% powered to detect a 40% slowing of disease progression. The FDA has requested the addition of progranulin as a co-primary endpoint, highlighting its importance as a biologically meaningful marker. As Arnon Rosenthal, Alector's CEO, noted, "We aligned on the sample size with the FDA in 2023... We enrolled 103 subjects, slightly over the number needed to show a clinical effect."

Pipeline Advancements

Alector is also advancing AL101, a second progranulin elevating antibody, in early Alzheimer's disease, with enrollment completed in April and trial completion expected in 2026. The company's preclinical pipeline includes a brain-penetrant anti-amyloid beta antibody for Alzheimer's disease and an engineered GCase replacement therapy for Parkinson's disease.

Valuation Metrics

Using the current valuation metrics, Alector's P/S Ratio stands at 2.94, and the EV/EBITDA is -1.82. These metrics indicate that the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 236.8%, indicating a high-growth trajectory.

Future Outlook

The company's progress in developing treatments for neurodegenerative diseases, particularly FTD and Alzheimer's disease, is significant. With a strong cash position and ongoing clinical trials, Alector is well-positioned to advance its pipeline and potentially bring new treatments to market. The success of the INFRONT-3 trial and other programs will be crucial in determining the company's future growth prospects.

3. NewsRoom

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Alector to Participate in the Bank of America CNS Therapeutics Conference

Dec -01

Source: globenewswire.com

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ALEC Investors Have Opportunity to Join Alector, Inc. Fraud Investigation with the Schall Law Firm

Nov -26

Source: globenewswire.com

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ALEC Investors Have Opportunity to Join Alector, Inc. Fraud Investigation with the Schall Law Firm

Nov -19

Source: globenewswire.com

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Alector Stock Plummets 63% in a Month: Here's What You Need to Know

Nov -18

Source: zacks.com

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ALEC Investors Have Opportunity to Join Alector, Inc. Fraud Investigation with the Schall Law Firm

Nov -12

Source: businesswire.com

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Alector (ALEC) Reports Q3 Loss, Beats Revenue Estimates

Nov -07

Source: zacks.com

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Alector Reports Third Quarter 2025 Financial Results and Provides Business Update

Nov -06

Source: globenewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Alector, Inc. - ALEC

Oct -28

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.40%)

6. Segments

Immuno-neurology

Expected Growth: 15.4%

Growing prevalence of neurodegenerative diseases, increasing investment in R&D, and advancements in immunotherapy are driving the growth of the immuno-neurology market.

7. Detailed Products

AL002

AL002 is a novel, first-in-class antibody that targets a key immune checkpoint, CD47, to enhance anti-tumor activity and promote immune-mediated destruction of cancer cells.

AL003

AL003 is a novel, first-in-class antibody that targets a key immune checkpoint, CD24, to enhance anti-tumor activity and promote immune-mediated destruction of cancer cells.

AL101

AL101 is a novel, first-in-class antibody that targets a key immune checkpoint, CD73, to enhance anti-tumor activity and promote immune-mediated destruction of cancer cells.

8. Alector, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Alector, Inc. has a moderate threat of substitutes due to the availability of alternative gene therapies and treatments for neurological disorders.

Bargaining Power Of Customers

Alector, Inc. has a low bargaining power of customers due to the lack of alternative treatments for rare genetic disorders, giving the company pricing power.

Bargaining Power Of Suppliers

Alector, Inc. has a moderate bargaining power of suppliers due to the dependence on a few key suppliers for raw materials and manufacturing services.

Threat Of New Entrants

Alector, Inc. has a high threat of new entrants due to the growing interest in gene therapy and the potential for new companies to enter the market.

Intensity Of Rivalry

Alector, Inc. operates in a moderately competitive market with a few established players, but the company's unique approach to gene therapy gives it a competitive advantage.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 22.49%
Debt Cost 3.95%
Equity Weight 77.51%
Equity Cost 8.04%
WACC 7.12%
Leverage 29.01%

11. Quality Control: Alector, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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aTyr Pharma

A-Score: 4.6/10

Value: 7.6

Growth: 6.4

Quality: 6.8

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

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Veracyte

A-Score: 4.3/10

Value: 1.2

Growth: 8.4

Quality: 6.4

Yield: 0.0

Momentum: 6.0

Volatility: 3.7

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Taysha Gene Therapies

A-Score: 4.2/10

Value: 6.2

Growth: 4.9

Quality: 4.2

Yield: 0.0

Momentum: 9.0

Volatility: 0.7

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Verrica Pharmaceuticals

A-Score: 3.4/10

Value: 9.0

Growth: 3.7

Quality: 6.0

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

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Alector

A-Score: 2.8/10

Value: 7.8

Growth: 3.7

Quality: 3.7

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Recursion Pharmaceuticals

A-Score: 2.8/10

Value: 6.8

Growth: 3.9

Quality: 3.4

Yield: 0.0

Momentum: 2.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.22$

Current Price

1.22$

Potential

-0.00%

Expected Cash-Flows