Alector Inc

Previous wording

In July 2021, we entered into a Collaboration and License Agreement with GSK (GSK Agreement) to collaborate on the global development and commercialization of progranulin-elevating monoclonal antibodies, including latozinemab and AL101.

Current wording

In July 2021, we entered into a Collaboration and License Agreement with Glaxo Wellcome UK Limited, a subsidiary of GlaxoSmithKline plc (GSK Agreement), to collaborate on the global development and commercialization of progranulin (PGRN)-elevating monoclonal antibodies, including latozinemab and AL101/GSK4527226.

Previous wording

Latozinemab modulates progranulin (PGRN), a key regulator of immune activity in the brain with genetic links to multiple neurodegenerative disorders. Latozinemab is in development as a potential treatment for FTD, a severe, rapidly progressing neurodegenerative disorder that affects 50,000 to 60,000 people in the United States and approximately 110,000 people in the European Union.

Current wording

Latozinemab is an investigational human recombinant monoclonal antibody designed to elevate progranulin (PGRN), a protein encoded by the granulin (GRN) gene that regulates lysosomal function, neuronal survival, and inflammation in the brain. Our lead PGRN-elevating candidate is being developed for the potential treatment of frontotemporal dementia with a granulin gene mutation (FTD-GRN), which is caused by heterozygous loss-of-function (LOF) mutations in the GRN gene and results in PGRN haploinsufficiency. Frontotemporal dementia (FTD) is a severe, rapidly progressing neurodegenerative disorder that affects 50,000 to 60,000 people in the United States and approximately 110,000 people in the European Union. FTD has several heritable forms, with FTD-GRNaccounting for an estimated 5% to 10% of all individuals living with the condition. There are currently no approved therapies for any form of FTD, and we believe latozinemab is the most advanced drug candidate in development for FTD-GRN.

Previous wording

AL101, the second product candidate in our PGRN portfolio, is designed to elevate progranulin levels, similar to latozinemab, and is currently being investigated for the potential treatment of Alzheimer’s disease and potentially other indications, including Parkinson's disease. In May 2023, we and GSK amended the GSK Agreement (the GSK Amendment). Under the terms of the GSK Amendment, we are responsible for funding and sharing in GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 trial of AL101 in AD. In August 2023, GSK received FDA clearance of the Investigational New Drug (IND) application for AL101 in the treatment of early AD. In February 2024, GSK dosed the first participant in the PROGRESS-AD global Phase 2 clinical trial of AL101/GSK4527226 in early AD. By March 2024, approvals to conduct the PROGRESS-AD trial in all participating countries in the European Union were granted. Enrollment continues to progress.

Current wording

In February 2024, GSK dosed the first participant in PROGRESS-AD, a global, 76-week Phase 2 clinical trial evaluating the safety and efficacy of AL101/GSK4527226 in slowing disease progression in early AD. Trial enrollment was completed in April 2025. In May 2023, we and GSK amended the GSK Agreement (the GSK Amendment). Under the terms of the GSK Amendment, we are responsible for funding GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 trial of AL101 in early AD.

Previous wording

Our operations have been financed primarily through our collaborations with AbbVie and GSK and the issuance and sale of convertible preferred stock and of common stock upon the completion of our public offerings.

Current wording

Our operations have been financed primarily through our collaboration with GSK, our previous collaboration with AbbVie Biotechnology, Ltd. (AbbVie) entered into in October 2017 and terminated in February 2025 (the AbbVie Agreement), the issuance and sale of convertible preferred stock and of common stock upon the completion of our initial public offering (IPO), and follow-on equity financings.

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 $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:

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 $40.5 million and $36.1 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $869.6 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

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.

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 the performance obligation.

Previous wording

Under the terms of the GSK Agreement, we received $700 million in upfront payments, of which $500 million was received in August 2021 and $200 million was received in January 2022. In addition, we will be eligible to receive up to an additional $1.5 billion in clinical development, regulatory, and commercial launch-related milestone payments for latozinemab and AL101. Alector and GSK are jointly developing latozinemab and AL101. In May 2023, we and GSK amended the GSK Agreement. Under the terms of the GSK Amendment, we are responsible for funding and sharing in GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 clinical trial of AL101 in AD.

Current wording

Under the terms of the GSK Agreement, we received $700 million in upfront payments, of which $500 million was received in August 2021 and $200 million was received in January 2022. In addition, we will be eligible to receive up to an additional $1.5 billion in clinical development, regulatory, and commercial launch-related milestone payments for latozinemab and AL101. Alector and GSK are jointly developing latozinemab and AL101. In May 2023, we and GSK amended the GSK Agreement. Under the terms of the GSK Amendment, we are responsible for funding GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 clinical trial of AL101 in AD.

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 $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.

Current wording

We expect that our revenue for the next several years will be derived primarily from the GSK Agreement. The balance of deferred revenue was $192.2 million as of March 31, 2025, related to the GSK Agreement. The deferred revenue is expected to be recognized over the research and development period of the programs through the completion of the initial Phase 2 clinical trials for specified indications for latozinemab and AL101.

Previous wording

Specific program expenses include expenses associated with the development of our most advanced product candidates: latozinemab, which is being studied in a pivotal Phase 3 clinical trial, INFRONT-3, and which has an ongoing Phase 2 clinical trial; AL002, which is being studied in a Phase 2 clinical trial; and AL101, which has an ongoing Phase 2 clinical trial. We also have expenses related to the discovery and development of future product candidates and separately tracked expenses related to programs that we expect to process through preclinical studies. These expenses primarily relate to salaries and benefits, stock-based compensation, facility expenses, including depreciation, and lab consumables.

Current wording

Specific program expenses include expenses associated with the development of our most advanced product candidates: latozinemab, which is being studied in a pivotal Phase 3 clinical trial, INFRONT-3; and AL101, which is being studied in a PROGRESS-AD Phase 2 clinical trial. We also have expenses related to the discovery and development of future product candidates and separately tracked expenses related to programs that we expect to move out of preclinical studies and into Phase 1 clinical trials. These expenses primarily relate to salaries and benefits, stock-based compensation, facility expenses, including depreciation, and lab consumables.

Previous wording

Where we share costs with our collaboration partners, such as in our GSK Agreement, research and development expenses may include reimbursements from, or payments to, our partner under our cost sharing arrangement.

Current wording

Where we share costs with our collaboration partners, such as in our GSK Agreement, research and development expenses may include cost sharing reimbursements from, or payments to, our partner.

Previous 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.

Current wording

Research and development expenses were $33.6 million for the three months ended March 31, 2025, compared to $45.2 million for the three months ended March 31, 2024. The decrease of $11.5 million was mainly due to a decrease in research and development expenses for the AL002 program and a decrease in personnel related costs as a result of the reductions in force.

Previous wording

Other income, net was $6.2 million for the three months ended September 30, 2024, compared to $7.4 million for the three months ended September 30, 2023. The decrease of $1.1 million was due to lower interest income from a reduction in marketable securities used to fund our operations.

Current wording

Other income, net was $4.2 million for the three months ended March 31, 2025, compared to $7.6 million for the three months ended March 31, 2024. The decrease of $3.4 million was due to lower interest income from a reduction in marketable securities used to fund our operations and interest rate cuts.

Previous 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.

Current wording

There was no income tax expense for the three months ended March 31, 2025 and income tax expense was less than $0.1 million for the three months ended March 31, 2024.

Previous wording

Since our inception through September 30, 2024, our operations have been financed primarily by our collaborations with AbbVie and GSK and the issuance and sale of convertible preferred stock and of common stock upon the completion of our public offerings.

Current wording

Since our inception through March 31, 2025, our operations have been financed primarily by our collaborations with GSK, and previously, AbbVie, and the issuance and sale of convertible preferred stock and of common stock upon the completion of our IPO and follow-on equity and debt financings.

Previous 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.

Current wording

As of March 31, 2025, we had $354.6 million of cash, cash equivalents, and marketable securities. As of March 31, 2025, we had an accumulated deficit of $869.6 million.

Previous wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operations and capital expenditure requirements through 2026. We reduced our workforce to better align our resources with our current strategic priorities and maintain our expectations with respect to our ability to fund our operations. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We may also choose to seek additional financing opportunistically. We may seek to raise capital through public equity or debt financings, license agreements, collaborative agreements or other arrangements with other companies, asset sales, or through other sources of financing. We have an omnibus shelf registration statement on Form S-3 with the SEC, which became effective on May 1, 2023, which permits us to issue up to $400 million in common stock, other equity securities and/or debt securities. We will need to obtain substantial additional funding in the future for our research and development activities and continuing operations. If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. On November 7, 2023, we entered into an at-the-market sales agreement with Cowen and Company, LLC (TD Cowen) pursuant to which we may offer and sell from time to time through TD Cowen up to $125,000,000 of shares of our common stock, in such share amounts as we may specify by notice to TD Cowen. On January 17, 2024, we entered into an underwriting agreement with Cantor Fitzgerald & Co. (Cantor), pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor.

Current wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operations and capital expenditure requirements into the second half of 2027. We reduced our workforce to better align our resources with our current strategic priorities and maintain our expectations with respect to our ability to fund our operations. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We may also choose to seek additional financing opportunistically. We may seek to raise capital through public equity or debt financings, license agreements, collaborative agreements or other arrangements with other companies, asset sales, or through other sources of financing. We have an omnibus shelf registration statement on Form S-3 with the SEC, which became effective on May 1, 2023, which permits us to issue up to $400 million in common stock, other equity securities and/or debt securities. We will need to obtain substantial additional funding in the future for our research and development activities and continuing operations. If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. On November 7, 2023, we entered into an at-the-market sales agreement with Cowen and Company, LLC (TD Cowen) pursuant to which we may offer and sell from time to time through TD Cowen up to $125,000,000 of shares of our common stock, in such share amounts as we may specify by notice to TD Cowen. On January 17, 2024, we entered into an underwriting agreement with Cantor Fitzgerald & Co. (Cantor), pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor. Additionally, on November 14, 2024, we entered into the Loan Agreement with our subsidiary, Alector LLC, as a co-borrower, the Lenders, and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and the Lenders, pursuant to which we may access up to two tranches of Term Loans in an aggregate principal amount of up to $50,000,000. The initial tranche of Term Loans provides for an aggregate principal amount of up to $25,000,000 through June 30, 2026, subject to the satisfaction of certain conditions. The second tranche of Term Loans provides for up to $25,000,000 and is available at the sole discretion of the Lenders. We borrowed $10,000,000 principal amount of the initial tranche of Term Loans on the closing date of the Loan Agreement.

Previous wording

We expect to obtain substantial additional funding in the future for our research and development activities and continuing operations. If we were unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.

Current wording

We expect to obtain substantial additional funding in the future for our research and development activities and continuing operations. If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.

Previous wording

the timing and progress of preclinical and clinical development activities; including, without limitation, our collaboration efforts with AbbVie and GSK;

Current wording

the timing and progress of preclinical and clinical development activities; including, without limitation, our collaboration efforts with GSK;

Previous wording

our precommercial activities and eventual commercialization plans for our product candidates;

Current wording

our eventual commercialization plans for our product candidates;

Previous wording

the effects of inflationary pressures; and

Current wording

the effects of macroeconomic conditions, including inflationary pressures and economic impacts of tariffs and global trade disruptions; and

Previous 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.

Current wording

For the three months ended March 31, 2025, cash used in operating activities was $60.8 million. This was mainly due to the net loss of $40.5 million. We also had a decrease in refund liability to collaboration partner of $13.3 million, a decrease in accrued liabilities and accrued clinical supply costs of $12.7 million. This was offset by a non-cash charge of $8.4 million for stock-based compensation.

Previous 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.

Current wording

For the three months ended March 31, 2024, cash used in operating activities was $61.3 million. This was mainly due to the net loss of $36.1 million. We also had a decrease in deferred revenue of $15.9 million, a decrease in refund liability to collaboration partner of $12.2 million, and a decrease in accrued liabilities and accrued clinical supply costs of $10.3 million. This was offset by a non-cash charge of $10.3 million for stock-based compensation.

Previous 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.

Current wording

For the three months ended March 31, 2025, cash provided by investing activities of $65.7 million was primarily related to the maturities of marketable securities of $121.5 million offset by purchases of marketable securities of $55.8 million.

Previous 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.

Current wording

For the three months ended March 31, 2024, cash used in investing activities of $11.8 million was primarily related to the maturities of marketable securities of $196.5 million offset by purchases of marketable securities of $185.2 million.

Previous 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.

Current wording

For the three months ended March 31, 2024, cash provided by financing activities of $71.1 million was primarily from the issuance of common stock upon a public offering.