Alector, Inc.

Previous 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.

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 that result 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

Latozinemab is currently being studied in INFRONT-3, a global, pivotal, 96-week Phase 3 clinical trial evaluating the safety and efficacy of our investigational PGRN-elevating antibody in slowing disease progression in individuals with FTD-GRN. We completed enrollment in INFRONT-3 in October 2023. Topline data are anticipated from the trial in the fourth quarter of 2025.

Current wording

Latozinemab is currently being studied in INFRONT-3, a global, pivotal, 96-week Phase 3 clinical trial evaluating the safety and efficacy of our investigational PGRN-elevating antibody in slowing disease progression in individuals with FTD-GRN. We completed enrollment in INFRONT-3 in October 2023. Topline data are anticipated from the trial by mid-fourth quarter of 2025. The statistical analysis plan (SAP) for INFRONT-3 has been amended after engagement with the U.S. Food and Drug Administration (FDA). The SAP will include plasma progranulin (PGRN) as a co-primary endpoint along with the Clinical Dementia Rating® plus National Alzheimer’s Coordinating Center Frontotemporal Lobar Degeneration Sum of Boxes (CDR® plus NACC FTLD-SB).

Previous wording

In prior clinical studies in FTD-GRN patients, latozinemab demonstrated elevation of PGRN levels to the normal range and early signals of exploratory biomarker and clinical activity. Latozinemab has been generally well tolerated in healthy volunteers and FTD-GRN patients across our Phase 1a, Phase 1b, and open label Phase 2 clinical trials. Latozinemab was granted Orphan Drug Designation for FTD from the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) as well as Breakthrough Therapy Designation and Fast Track Designation for FTD-GRN from the FDA.

Current wording

In prior clinical studies in FTD-GRN patients, latozinemab demonstrated elevation of PGRN levels to the normal range and early signals of exploratory biomarker and clinical activity. Latozinemab has been generally well tolerated in healthy volunteers and FTD-GRN patients across our Phase 1a, Phase 1b, and open label Phase 2 clinical trials. Latozinemab was granted Orphan Drug Designation for FTD from the FDA as well as Breakthrough Therapy Designation and Fast Track Designation for FTD-GRN. The European Medicines Agency (EMA) has also granted Orphan Drug Status for latozinemab.

Previous 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.

Current wording

In April 2025, enrollment was completed in PROGRESS-AD, a randomized, double-blind, placebo-controlled, 76-week Phase 2 global clinical trial evaluating the safety and efficacy of AL101/GSK4527226 in slowing disease progression in early AD. Trial completion is expected in 2026. 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

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:

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 $30.5 million and $71.0 million for the three and six months ended June 30, 2025, respectively. Our net losses were $38.7 million and $74.8 million for the three and six months ended June 30, 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $900.1 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

On March 7, 2025, we committed to a plan to reduce our workforce by approximately 13% to better align our resources with our strategic priorities including advancing our preclinical and research pipeline. We initiated such reduction in force impacting approximately 25 employees across the organization. Our cash, cash equivalents, and marketable securities as of March 31, 2025, totaled $354.6 million, which we anticipate provides runway into the second half of 2027.

Current wording

On March 7, 2025, we committed to a plan to reduce our workforce by approximately 13% to better align our resources with our strategic priorities including advancing our preclinical and research pipeline. We initiated such reduction in force impacting approximately 25 employees across the organization. Our cash, cash equivalents, and marketable securities as of June 30, 2025, totaled $307.3 million, which we anticipate provides runway into the second half of 2027.

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 recognized revenue from the upfront payments and the milestone payment received from AbbVie over time as services were 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

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.

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 $182.3 million as of June 30, 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 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.

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 the 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

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, and incur expenses associated with hiring additional personnel to support our research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.

Current wording

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, and as we seek regulatory approvals for any product candidates that successfully complete clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.

Previous wording

Collaboration revenue was $3.7 million for the three months ended March 31, 2025, compared to $15.9 million for the three months ended March 31, 2024. The $12.2 million decrease was mainly due to the satisfaction of the performance obligation associated with the AL002 program and the latozinemab FTD-C9orf72 Phase 2 trial in the fourth quarter of 2024. 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.

Current wording

Collaboration revenue was $7.9 million for the three months ended June 30, 2025, compared to $15.1 million for the three months ended June 30, 2024. The $7.2 million decrease was mainly due to the satisfaction of the performance obligation associated with the AL002 program and the latozinemab FTD-C9orf72 Phase 2 trial in the fourth quarter of 2024. 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 $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.

Current wording

Research and development expenses were $27.6 million for the three months ended June 30, 2025, compared to $46.3 million for the three months ended June 30, 2024. The decrease of $18.7 million was mainly due to a decrease in research and development expenses for the AL002 program and latozinemab program as well as a decrease in personnel related costs as a result of the reductions in force.

Previous wording

General and administrative expenses were $14.7 million for the three months ended March 31, 2025, compared to $14.4 million for the three months ended March 31, 2024.

Current wording

General and administrative expenses were $14.4 million for both the three months ended June 30, 2025 and the three months ended June 30, 2024.

Previous 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.

Current wording

Other income, net was $3.6 million for the three months ended June 30, 2025, compared to $7.0 million for the three months ended June 30, 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

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.

Current wording

As of June 30, 2025, we had $307.3 million of cash, cash equivalents, and marketable securities. As of June 30, 2025, we had an accumulated deficit of $900.1 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 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.

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 a 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 (the “Loan Agreement”), 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

addition and retention of key research and development personnel;

Current wording

addition or retention of key research and development personnel;

Previous wording

our efforts to enhance operational, financial, and information management systems, and hire additional personnel, including personnel to support development of our product candidates;

Current wording

our efforts to enhance operational, financial, and information management systems, and hire or retain personnel, including personnel to support development of our product candidates;

Previous 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.

Current wording

For the six months ended June 30, 2025, cash used in operating activities was $109.8 million. This was mainly due to the net loss of $71.0 million. We also had a decrease in refund liability to collaboration partner of $26.1 million, a decrease in deferred revenue of $11.5 million, a decrease in accrued liabilities and accrued clinical supply costs of $16.5 million. This was offset by a non-cash charge of $15.4 million for stock-based compensation.

Previous 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.

Current 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.

Previous 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.

Current wording

For the six months ended June 30, 2025, cash provided by investing activities of $121.5 million was primarily related to the maturities of marketable securities of $250.4 million offset by purchases of marketable securities of $131.9 million.

Previous 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.

Current 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.

Previous 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.

Current 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.