Alector(ALEC) - 2024 Q3 - Quarterly Results

Executive Summary & Business Highlights Alector reported strong Q3 2024 financial results, a robust cash position, and key updates on its TREM2 and Progranulin clinical programs Q3 2024 Overview Alector reported strong Q3 2024 results, maintaining a $457.2 million cash position through 2026, and updated on key clinical programs AL002 and latozinemab - Alector's cash, cash equivalents, and investments totaled $457.2 million as of September 30, 2024, providing a financial runway through 2026[1][13] - Data from the INVOKE-2 Phase 2 trial, evaluating TREM2 agonist candidate AL002 in early Alzheimer's disease, is on track for release in 2024[1][2] - Participant baseline characteristics in the pivotal INFRONT-3 Phase 3 trial for latozinemab in FTD-GRN suggest a representative study population[1][2] CEO & R&D Head Commentary CEO and R&D Head highlighted significant pipeline progress, including AL002's potential, INFRONT-3 patient data, PROGRESS-AD enrollment, and ABC technology advancements - AL002, the most advanced TREM2 candidate for early Alzheimer's disease, is expected to report INVOKE-2 Phase 2 trial data in 2024, with potential for potent and durable therapeutic benefits[2] - The INFRONT-3 Phase 3 clinical trial for latozinemab in FTD-GRN has reported patient baseline characteristics suggesting a representative study population, with top-line data expected in late 2025/early 2026[2] - PROGRESS-AD, the Phase 2 trial of AL101/GSK4527226 in early Alzheimer's disease, has reached over one-third of its target enrollment[2] - Alector is actively advancing its proprietary Alector Brain Carrier (ABC) technology platform to improve the delivery of therapeutics to the brain for neurodegenerative diseases[2] Recent Clinical Updates Alector provided comprehensive updates on its immuno-neurology pipeline, including TREM2 and Progranulin programs, and Alector Brain Carrier technology advancements Immuno-Neurology Portfolio Alector updated its immuno-neurology pipeline, covering the TREM2 program (AL002) and Progranulin programs (latozinemab and AL101/GSK4527226) for neurodegenerative diseases TREM2 Program (AL002) The AL002 Phase 2 INVOKE-2 trial for early Alzheimer's disease is on track for 2024 results, with AbbVie holding a $250 million option for global rights - Results from the INVOKE-2 Phase 2 clinical trial of AL002 for early Alzheimer's disease are expected in 2024[3] - 98% of eligible participants who completed the planned treatment period of INVOKE-2 have elected to participate in the long-term extension (LTE) study[4] - A manuscript published in October 2024 detailed preclinical and INVOKE-1 Phase 1 study results, showing AL002 engaged TREM2 and induced pharmacodynamic biomarker changes associated with microglial proliferation, survival, and phagocytic activity[5] - AbbVie has an exclusive option to globally develop and commercialize AL002, with a $250 million payment to Alector upon exercise[6] Progranulin Programs (latozinemab (AL001) and AL101/GSK4527226) The pivotal INFRONT-3 Phase 3 trial for latozinemab in FTD-GRN is on track for late 2025/early 2026 data, with AL101/GSK4527226's PROGRESS-AD trial progressing - The pivotal INFRONT-3 Phase 3 clinical trial of latozinemab for FTD-GRN is ongoing and on track, with enrollment completed in October 2023 and a treatment duration of 96 weeks[6] - Top-line data readout for INFRONT-3 is approaching in late 2025/early 2026[2] - Baseline characteristics of symptomatic INFRONT-3 participants were representative of the broader FTD-GRN registry population[7] - PROGRESS-AD, a Phase 2 clinical study evaluating AL101/GSK4527226 in early AD, has reached more than one-third of its target enrollment of 282 participants[8] Early Research Pipeline Alector is advancing its proprietary Alector Brain Carrier (ABC) technology to optimize therapeutic delivery to the brain for next-generation immuno-neurology treatments - Alector continues to advance its Alector Brain Carrier (ABC), a proprietary, versatile blood-brain barrier technology platform[9] - The ABC technology platform enables customization of affinity, valency, and format to optimize effector function and half-life in preclinical models, aiming to improve delivery of therapeutics to the brain[9] Third Quarter 2024 Financial Results Alector reported Q3 2024 financial results, detailing changes in collaboration revenue, operating expenses, net loss, and current cash position Financial Performance Summary Alector's Q3 2024 saw increased collaboration revenue, higher operating expenses, a reduced net loss, and a strong cash position despite a facility transition impairment Collaboration Revenue Collaboration revenue for Q3 2024 significantly increased year-over-year, driven by higher revenue recognition from the AL002 program | Metric | Q3 2024 (USD thousands) | Q3 2023 (USD thousands) | Change (YoY) | | :----- | :---------------------- | :---------------------- | :----------- | | Collaboration revenue | $15,342 | $9,109 | +$6,233 (+68.4%) | Research and Development Expenses Total R&D expenses for Q3 2024 modestly increased, driven by higher spending on AL101 programs and PROGRESS-AD Phase 2 clinical trial initiation | Metric | Q3 2024 (USD thousands) | Q3 2023 (USD thousands) | Change (YoY) | | :----- | :---------------------- | :---------------------- | :----------- | | Research and development | $47,998 | $46,328 | +$1,670 (+3.6%) | General and Administrative Expenses G&A expenses increased in Q3 2024, primarily due to an impairment charge from a facility transition to the South San Francisco headquarters | Metric | Q3 2024 (USD thousands) | Q3 2023 (USD thousands) | Change (YoY) | | :----- | :---------------------- | :---------------------- | :----------- | | General and administrative | $15,778 | $13,364 | +$2,414 (+18.1%) | Net Loss and EPS Alector reported a reduced net loss and improved net loss per share for Q3 2024 compared to the prior year | Metric | Q3 2024 (USD million) | Q3 2023 (USD million) | Change (YoY) | | :----- | :-------------------- | :-------------------- | :----------- | | Net loss | $(42.2) | $(44.5) | -$2.3 (-5.2%) | | Net loss per share (USD) | $(0.43) | $(0.53) | -$0.10 (-18.9%) | Cash Position As of September 30, 2024, Alector maintained a strong cash position of $457.2 million, projected to fund operations through 2026 | Metric | As of Sep 30, 2024 (USD million) | As of Dec 31, 2023 (USD million) | Change (USD million) | | :----- | :------------------------------- | :------------------------------- | :------------------- | | Cash, cash equivalents, and investments | $457.2 | $548.9 | -$91.7 | 2024 Financial Guidance Alector provided its full-year 2024 financial guidance, including projections for collaboration revenue and operating expenses Full-Year 2024 Guidance Alector reiterated its full-year 2024 financial guidance, projecting collaboration revenue between $60 million and $70 million and total operating expenses between $270 million and $290 million | Metric | 2024 Guidance Range (USD million) | | :----- | :-------------------------------- | | Collaboration revenue | $60 - $70 | | Total R&D expenses | $210 - $220 | | Total G&A expenses | $60 - $70 | Company Information This section provides an overview of Alector's immuno-neurology mission and includes standard forward-looking statements About Alector Alector is a clinical-stage biotechnology company pioneering immuno-neurology, targeting immune dysfunction as a root cause of neurodegenerative diseases - Alector is a clinical-stage biotechnology company pioneering immuno-neurology for neurodegenerative diseases[15] - Its therapeutic approach targets immune dysfunction as a root cause of degenerative brain disorders[15] - Alector's product candidates are supported by biomarkers and seek to treat indications including Alzheimer's disease and genetically defined frontotemporal dementia patient populations[15] Forward-Looking Statements This section contains standard forward-looking statements regarding Alector's business, product candidates, and financial guidance, subject to risks in SEC filings - The press release contains forward-looking statements regarding business plans, product candidates, clinical trials, and financial guidance[16] - Such statements are subject to numerous risks and uncertainties, including those set forth in Alector's Quarterly Report on Form 10-Q filed with the SEC[16] - Alector specifically disclaims any obligation to update any forward-looking statement, except as required by law[16] Financial Statements This section presents Alector's selected consolidated balance sheet and statement of operations data for the reported periods Selected Consolidated Balance Sheet Data Alector's consolidated balance sheet data shows a decrease across cash, total assets, liabilities, and stockholders' equity from December 31, 2023, to September 30, 2024 | Metric (USD thousands) | Sep 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | | :-------------------- | :--------------------------- | :--------------------------- | | Cash, cash equivalents, and marketable securities | $457,202 | $548,861 | | Total assets | $516,023 | $621,827 | | Total current liabilities (excluding deferred revenue) | $87,098 | $94,973 | | Deferred revenue (including current portion) | $248,202 | $293,820 | | Total liabilities | $397,090 | $487,669 | | Total stockholders' equity | $118,933 | $134,158 | Consolidated Statement of Operations Data The consolidated statement of operations data for Q3 2024 shows increased collaboration revenue and reduced net loss, while the nine-month period reflects decreased revenue and increased net loss | Metric (USD thousands, except per share) | Q3 2024 (USD thousands) | Q3 2023 (USD thousands) | 9 Months Ended Sep 30, 2024 (USD thousands) | 9 Months Ended Sep 30, 2023 (USD thousands) | | :------------------------------------------ | :---------------------- | :---------------------- | :------------------------------------------ | :------------------------------------------ | | Collaboration revenue | $15,342 | $9,109 | $46,318 | $81,872 | | Research and development | $47,998 | $46,328 | $139,479 | $144,392 | | General and administrative | $15,778 | $13,364 | $44,587 | $41,767 | | Total operating expenses | $63,776 | $59,692 | $184,066 | $186,159 | | Loss from operations | $(48,434) | $(50,583) | $(137,748) | $(104,287) | | Other income, net | $6,214 | $7,360 | $20,853 | $18,876 | | Net loss before income tax | $(42,220) | $(43,223) | $(116,895) | $(85,411) | | Income tax expense | — | $1,252 | $80 | $3,546 | | Net loss | $(42,220) | $(44,475) | $(116,975) | $(88,957) | | Net loss per share, basic and diluted (USD) | $(0.43) | $(0.53) | $(1.22) | $(1.07) | | Shares used in computing net loss per share basic and diluted | 97,519,595 | 83,927,961 | 96,007,105 | 83,513,954 | Contacts This section provides essential contact information for Alector's corporate, media, and investor relations Alector Contacts This section provides contact information for Alector's corporate communications, media relations, and investor relations - Contact information for Alector (Katie Hogan), media (Dan Budwick at 1AB), and investors (Laura Perry at Argot Partners) is provided[19]