Equity Research

Alector, Inc.: Initiation of Research Coverage

William Blair initiated research coverage of Alector, Inc. (ALEC $24.26), a clinical-stage biopharma company developing therapies that target neuro-immunology using genetic insights in chronic neurodegenerative disorders.

Analyst Myles Minter estimated the company’s lead asset AL001, an anti-Sortilin-1 (SORT1) antibody to prevent progranulin (PGRN) metabolism, holds a $2.8 billion peak sales opportunity. Two additional programs are being developed in collaboration with AbbVie and Minter believes these could bring in $250 million per asset to Alector if licenses are executed by the end of 2023.

“AL001 is being evaluated in the ongoing open label Phase II INFRONT-2 trial and pivotal INFRONT-3 study in patients with frontotemporal dementia, or FTD, due to a GRN mutation,” Minter said. “There are no FDA-approved therapies for FTD, regardless of genotype. Alector recently presented interim 12-month clinical data from the ongoing Phase II INFRONT-2 trial of AL001 in symptomatic FTD-GRN patients. From a top level, data show normalization of plasma and cerebrospinal fluid PGRN levels, reductions in markers of lysosomal dysfunction and neuroinflammation, improvement in neurofilament light chain (a marker of neurodegeneration), reduced ventricular enlargement, and a 47% slowing in the rate of clinical decline. The data set was likely a major contributor to GlaxoSmithKline inking a $2.2 billion collaborative and profit-sharing deal for Alector’s progranulin franchise, including AL001 in both FTD and amyotrophic lateral sclerosis and AL101, a subcutaneous formulation for Alzheimer’s disease and Parkinson’s disease. Additional data from INFRONT-2 will be presented in the remainder of 2021 and throughout 2022.”

Minter continued, “Alector also commenced a Phase II placebo-controlled Phase II trial of AL001 in ALS-C9Orf72 patients, the data from which could set up the PGRN franchise to be a true pipeline within a drug opportunity. And the company is developing AL002 and AL003 for the treatment of Alzheimer’s disease in collaboration with AbbVie. AL002 is being evaluated in the ongoing Phase II INVOKE-2 study in Aβ-positive prodromal-to-mild Alzheimer’s disease patients, with top-line data expected in 2023. For AL003, we expect top-line data from a Phase Ib trial evaluating target engagement in both healthy volunteers and Alzheimer’s disease patients in the second half of 2021.”

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