Alector Inc

Previous wording

Latozinemab is currently being studied in a global pivotal Phase 3 trial, INFRONT-3, for the potential treatment of adults at risk for or with symptomatic FTD due to mutation in the progranulin gene (FTD-GRN). In October 2023, we achieved target enrollment in INFRONT-3 with 103 symptomatic and 16 at-risk participants enrolled. Target enrollment was based on feedback from the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA). Enrollment completion is subject to revised protocol approval in countries outside the United States. In February 2024, the FDA granted Breakthrough Therapy Designation to latozinemab for the treatment of FTD-GRN. The FDA's Breakthrough Therapy Designation is granted to expedite the development and review of drugs in the United States that are intended to treat a serious condition, when preliminary clinical evidence indicates the drug or vaccine may demonstrate substantial improvement over available therapy on clinically significant endpoint(s). In our INFRONT-2 open label Phase 2 clinical trial in FTD-GRN patients, latozinemab elevated progranulin levels to the normal range, biomarkers of disease activity showed trends toward normalization, and preliminary data showed that latozinemab slowed disease progression compared to historical matched controls. Latozinemab has been generally well tolerated in healthy volunteers and FTD-GRN and FTD-C9orf72 patients in our Phase 1a and Phase 1b clinical trials, and in our open label Phase 2 clinical trial. Patients who previously participated in the INFRONT-2 or INFRONT-3 trials have the opportunity to participate in a single continuation study, enrolling in the United States and other countries, which will provide continued access to and assess the continuing safety of latozinemab.

Current wording

Latozinemab is currently being studied in a global pivotal Phase 3 trial, INFRONT-3, for the potential treatment of adults at risk for or with symptomatic FTD due to mutation in the progranulin gene (FTD-GRN). In October 2023, we achieved target enrollment in INFRONT-3 with 103 symptomatic and 16 at-risk participants enrolled. Target enrollment was based on feedback from the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA). Enrollment completion is subject to revised protocol approval in countries outside the United States. In February 2024, the FDA granted Breakthrough Therapy Designation to latozinemab for the treatment of FTD-GRN. The FDA's Breakthrough Therapy Designation is granted to expedite the development and review of drugs in the United States that are intended to treat a serious condition, when preliminary clinical evidence indicates the drug or vaccine may demonstrate substantial improvement over available therapy on clinically significant endpoint(s). In our INFRONT-2 open label Phase 2 clinical trial in FTD-GRN patients, latozinemab elevated progranulin levels to the normal range, biomarkers of disease activity showed trends toward normalization, and preliminary data showed that latozinemab slowed disease progression compared to historical matched controls. Latozinemab has been generally well tolerated in healthy volunteers and patients in our Phase 1a and Phase 1b clinical trials, and in our open label Phase 2 clinical trial. Patients who previously participated in the INFRONT-2 or INFRONT-3 trials have the opportunity to participate in a single continuation study, enrolling in the United States and other countries, which will provide continued access to and will continue to assess latozinemab.

Previous wording

In January 2023, the first patient was enrolled and dosed in a long-term extension (LTE) of our INVOKE-2 Phase 2 clinical trial. In February 2023, we and AbbVie amended the AbbVie agreement (the AbbVie Amendment), which resulted in our receiving a $17.8 million milestone payment in March 2023 for the dosing of the first patient in the LTE trial. Under the terms of the AbbVie Amendment, we were eligible to earn up to an additional $12.5 million to support the enrollment of additional patients in the ongoing INVOKE-2 trial to replace discontinuations and we received the total $12.5 million in 2023. We completed enrollment of 381 patients in the INVOKE-2 clinical trial in the third quarter of 2023, with data expected in the fourth quarter of 2024.

Current wording

In January 2023, the first patient was enrolled and dosed in a long-term extension (LTE) of our INVOKE-2 Phase 2 clinical trial. In February 2023, we and AbbVie amended the AbbVie agreement (the AbbVie Amendment), which resulted in our receiving a $17.8 million milestone payment in March 2023 for the dosing of the first patient in the LTE trial. Under the terms of the AbbVie Amendment, we were eligible to earn up to an additional $12.5 million to support the enrollment of additional patients in the ongoing INVOKE-2 trial to replace discontinuations and we received the total $12.5 million in 2023. We completed enrollment of 381 patients in the INVOKE-2 clinical trial in the third quarter of 2023, with data expected in the fourth quarter of 2024. We will provide AbbVie with data from INVOKE-2 and relevant information, which AbbVie will evaluate to decide whether to exercise its exclusive option to develop and commercialize our TREM2 program.

Previous wording

To date, we have not had any products approved for sale and have not generated any revenue from product sales. Further, we do not expect to generate revenue from product sales until such time, if ever, that we are able to successfully complete the development and obtain marketing approval for one of our product candidates. We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception, and we expect to continue to incur net losses for the foreseeable future. Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $38.7 million and $74.8 million for the three and six months ended June 30, 2024, respectively. Our net income was $1.4 million for the three months ended June 30, 2023 and net loss was $44.5 million for the six months ended June 30, 2023. As of June 30, 2024, we had an accumulated deficit of $784.8 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Current wording

To date, we have not had any products approved for sale and have not generated any revenue from product sales. Further, we do not expect to generate revenue from product sales until such time, if ever, that we are able to successfully complete the development and obtain marketing approval for one of our product candidates. We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception, and we expect to continue to incur net losses for the foreseeable future. Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $42.2 million and $117.0 million for the three and nine months ended September 30, 2024, respectively. Our net losses were $44.5 million and $89.0 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $827.1 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Previous wording

In January 2024, we announced the closing of an underwritten public offering and the net proceeds from the offering were approximately $71.1 million. Our cash, cash equivalents, and marketable securities as of June 30, 2024 totaled $503.3 million, which we anticipate provides runway through 2026.

Current wording

In January 2024, we announced the closing of an underwritten public offering and the net proceeds from the offering were approximately $71.1 million. Our cash, cash equivalents, and marketable securities as of September 30, 2024 totaled $457.2 million, which we anticipate provides runway through 2026.

Previous wording

We have not generated any revenue from product sales and do not expect to do so in the near future. Our revenue to date has been primarily related to the AbbVie Agreement and GSK Agreement for the license and co-development of product candidates with those parties. We recognize revenue from the upfront payments and the milestone payment received from AbbVie over time as services are provided. We recognize revenue from the upfront payments from GSK at a point in time for a development license and over time for research and development services. Revenues for research and development services are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation.

Current wording

We have not generated any revenue from product sales and do not expect to do so in the near future. Our revenue to date has been primarily related to the AbbVie Agreement and GSK Agreement for the license and co-development of product candidates with those parties. We recognize revenue from the upfront payments and the milestone payment received from AbbVie over time as services are provided. We recognize revenue from the upfront payments from GSK at a point in time for a development license and over time for research and development services. Revenues for research and development services are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy each performance obligation.

Previous wording

We expect that our revenue for the next several years will be derived primarily from the AbbVie and GSK Agreements. The balance of deferred revenue was $263.5 million as of June 30, 2024, related to the AbbVie and GSK Agreements. The deferred revenue is expected to be recognized over the research and development period of the programs through proof-of-concept for AL002 and the completion of the initial Phase 2 clinical trials for specified indications for latozinemab and AL101.

Current wording

We expect that our revenue for the next several years will be derived primarily from the AbbVie and GSK Agreements. The balance of deferred revenue was $248.2 million as of September 30, 2024, related to the AbbVie and GSK Agreements. The deferred revenue is expected to be recognized over the research and development period of the programs through proof-of-concept for AL002 and the completion of the initial Phase 2 clinical trials for specified indications for latozinemab and AL101.

Previous wording

Income tax expense was less than $0.1 million for the six months ended June 30, 2024, compared to $2.3 million for the six months ended June 30, 2023. The decrease was due to the full recognition of GSK revenue for tax purposes in 2023.

Current wording

The Company did not incur any income tax expense for the three months ended September 30, 2024, compared to $1.3 million for the three months ended September 30, 2023. The decrease was due to the full recognition of GSK revenue for tax purposes in 2023.

Previous wording

Comparison of the Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Nine Months Ended September 30, 2024 and 2023

Previous wording

Collaboration revenue was $15.1 million for the three months ended June 30, 2024, compared to $56.2 million for the three months ended June 30, 2023. The $41.1 million decrease was mainly due to a $35.7 million decrease in revenue recognized for the AL101 programs, including a cumulative non-cash revenue adjustment due to a contract modification in the second quarter of 2023 to have GSK operationalize the AL101 Phase 2 study. The decrease is partially due to a $15.2 million decrease in revenue recognized for the AL002 program due to the addition of AL002 LTE and patient replacement revenue in 2023. This was offset by a $9.8 million increase in revenue recognized for the latozinemab programs. Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation.

Current wording

Collaboration revenue was $46.3 million for the nine months ended September 30, 2024, compared to $81.9 million for the nine months ended September 30, 2023. The $35.6 million decrease was mainly due to a $30.1 million decrease in revenue recognized for the AL101 programs, including a cumulative non-cash revenue adjustment due to a contract modification in the second quarter of 2023 to have GSK operationalize the AL101 Phase 2 study. The decrease is also due to a $7.5 million decrease in revenue recognized for the AL002 program due to the addition of AL002 LTE and patient replacement revenue in 2023. Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy each performance obligation.

Previous wording

Research and development expenses were $91.5 million for the six months ended June 30, 2024 compared to $98.1 million for the six months ended June 30, 2023. The decrease of $6.6 million was mainly due to the Company’s prioritization of selected late-stage programs and a decrease in personnel related costs.

Current wording

Research and development expenses were $139.5 million for the nine months ended September 30, 2024 compared to $144.4 million for the nine months ended September 30, 2023. The decrease of $4.9 million was mainly due to the Company’s prioritization of selected late-stage programs and a decrease in personnel related costs, offset by an increase in research and development expenses for the AL101 programs that resulted from the initiation of the PROGRESS-AD Phase 2 clinical trial in 2024.

Previous wording

Other income, net was $7.0 million for the three months ended June 30, 2024, compared to $6.4 million for the three months ended June 30, 2023. The increase of $0.6 million was due to higher investment yields on our marketable securities.

Current wording

Other income, net was $20.9 million for the nine months ended September 30, 2024 compared to $18.9 million for the nine months ended September 30, 2023. The increase of $2.0 million was due to higher investment yields on our marketable securities.

Previous wording

Income tax expense was less than $0.1 million for the three months ended June 30, 2024, compared to $1.4 million for the three months ended June 30, 2023. The decrease was due to the full recognition of GSK revenue for tax purposes in 2023.

Current wording

Income tax expense was less than $0.1 million for the nine months ended September 30, 2024, compared to $3.5 million for the nine months ended September 30, 2023. The decrease was due to the full recognition of GSK revenue for tax purposes in 2023.

Previous wording

As of June 30, 2024, we had $503.3 million of cash, cash equivalents, and marketable securities. As of June 30, 2024, we had an accumulated deficit of $784.8 million.

Current wording

As of September 30, 2024, we had $457.2 million of cash, cash equivalents, and marketable securities. As of September 30, 2024, we had an accumulated deficit of $827.1 million.

Previous wording

For the six months ended June 30, 2024, cash used in operating activities was $124.1 million. This was mainly due to the net loss of $74.8 million. We also had a decrease in deferred revenue of $31.0 million, a decrease in refund liability to collaboration partner of $22.5 million, and a decrease in accrued liabilities and accrued clinical supply costs of $9.8 million. This was offset by a non-cash charge of $20.2 million for stock-based compensation.

Current wording

For the nine months ended September 30, 2024, cash used in operating activities was $174.9 million. This was mainly due to the net loss of $117.0 million. We also had a decrease in deferred revenue of $46.3 million, a decrease in refund liability to collaboration partner of $33.6 million, and a decrease in accrued liabilities and accrued clinical supply costs of $6.5 million. This was offset by a non-cash charge of $29.3 million for stock-based compensation.

Previous wording

For the six months ended June 30, 2023, cash used in operating activities was $91.6 million. This was mainly due to the net loss of $44.5 million. We also had a decrease in deferred revenue of $49.3 million.

Current wording

For the nine months ended September 30, 2023, cash used in operating activities was $138.1 million. This was mainly due to the net loss of $89.0 million. We also had a decrease in deferred revenue of $51.6 million and a decrease in refund liability of $13.8 million. This was offset by a non-cash charge of $31.3 million for stock-based compensation.

Previous wording

For the six months ended June 30, 2024, cash provided by investing activities of $25.4 million was primarily related to the maturities of marketable securities of $322.2 million offset by purchases of marketable securities of $297.8 million.

Current wording

For the nine months ended September 30, 2024, cash provided by investing activities of $65.7 million was primarily related to the maturities of marketable securities of $446.1 million offset by purchases of marketable securities of $381.1 million.

Previous wording

For the six months ended June 30, 2023, cash used in investing activities of $66.9 million was primarily related to the maturities of marketable securities of $337.6 million offset by purchases of marketable securities of $268.5 million.

Current wording

For the nine months ended September 30, 2023, cash provided by investing activities of $83.8 million was primarily related to the maturities of marketable securities of $500.5 million offset by purchases of marketable securities of $414.5 million.

Previous wording

For the six months ended June 30, 2024, cash provided by financing activities of $71.8 million was primarily from the issuance of common stock upon a public offering.

Current wording

For the nine months ended September 30, 2024, cash provided by financing activities of $71.8 million was primarily from the issuance of common stock upon a public offering.

Previous wording

For the six months ended June 30, 2023, cash provided by financing activities of $1.9 million was primarily from the exercise of options to purchase common stock.

Current wording

For the nine months ended September 30, 2023, cash provided by financing activities of $2.0 million was primarily from the exercise of options to purchase common stock and the issuance of stock from ESPP.

Previous wording

We recognize revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under arrangements, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies the performance obligation. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling price (SSP). The relative SSP for each deliverable is estimated using external sourced evidence if it is available. If external sourced evidence is not available, we use our best estimate of the SSP for the deliverable.

Current wording

We recognize revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under arrangements, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies the performance obligation. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling price (SSP). The relative SSP for each deliverable is estimated using externally sourced evidence if it is available. If externally sourced evidence is not available, we use our best estimate of the SSP for the deliverable.

Previous wording

We recognize collaboration revenue at a point in time if control of the promised good or service has been transferred to the customer. We recognize collaboration revenue over time by measuring the progress toward complete satisfaction of the performance obligation using an input measure. In order to recognize revenue over the research and development period, we measure actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Revenues are recognized as the program costs are incurred. We reevaluate the estimate of expected costs to satisfy the performance obligation each reporting period and make adjustments for any significant changes. Clinical trials are expensive and can take many years to complete, and the outcome is inherently uncertain. Changes in our forecasted costs are likely to occur over time based upon changes in clinical trial procedures set forth in protocols, changes in estimates of manufacturing costs, or feedback from regulators on the design or operation of our clinical trials. We have had changes to the overall expected costs to satisfy the performance obligations from period to period.

Current wording

We recognize collaboration revenue at a point in time if control of the promised good or service has been transferred to the customer. We recognize collaboration revenue over time by measuring the progress toward complete satisfaction of the performance obligation using an input measure. In order to recognize revenue over the research and development period, we measure actual costs incurred to date compared to the overall total expected costs to satisfy each performance obligation. Revenues are recognized as the program costs are incurred. We reevaluate the estimate of expected costs to satisfy each performance obligation each reporting period and make adjustments for any significant changes. Clinical trials are expensive and can take many years to complete, and the outcome is inherently uncertain. Changes in our forecasted costs are likely to occur over time based upon changes in clinical trial procedures set forth in protocols, changes in estimates of manufacturing costs, or feedback from regulators on the design or operation of our clinical trials. We have had changes to the overall expected costs to satisfy the performance obligations from period to period.