I’ve been digging into ALEC over the last few days and honestly, the story has changed quite a bit recently.
The big news was the Genentech deal for AL050.
Genentech is paying Alector $100M upfront for worldwide rights to AL050, with up to another $1.17B in development/regulatory/commercial milestones + royalties if the program eventually succeeds.
Obviously, nobody should value the $1.17B as cash today. Most of that money is still dependent on the drug actually working and hitting future milestones.
But what I find interesting is what this does for Alector itself.
According to the latest 8-K, Alector expects roughly $223.7M in cash/cash equivalents/marketable securities after the upfront payment and the related payment to Spur, and management believes this gives them runway into 2029.
So the immediate financing/dilution risk looks a lot less scary to me than it did before.
And then there’s October 13.
Alector is holding an R&D webinar focused on its Alector Brain Carrier (ABC) platform.
This isn't a Phase 3 readout or some guaranteed binary FDA event. That's important.
But they specifically said they're going to discuss:
AL137 — their next-gen anti-Aβ antibody
AL164 — an ABC-enabled tau siRNA program
AL062 — an ABC-enabled alpha-synuclein siRNA program
ADP065 — targeting NLRP3
The interesting part for me is AL137.
Alector says ABC is designed to improve delivery across the blood-brain barrier. For AL137 specifically, they're targeting enhanced brain exposure, reduced ARIA risk and monthly subcutaneous dosing.
They're also planning to show preclinical data for the siRNA programs demonstrating target reduction across multiple brain regions.
That's basically what I'm watching on October 13:
Does the data actually make ABC look like a platform, rather than just another biotech concept?
If the presentation shows convincing brain penetration / target reduction and gives investors more confidence in AL137 and the other programs, I could see why the market might start valuing ALEC differently.
On the other hand, if the data is weak, overly early, or doesn't show enough differentiation, I wouldn't be surprised if the stock gives back some of the recent move.
And there's another thing I don't want to ignore:
Alector has had some pretty serious setbacks. The GSK collaboration ended after clinical failures involving latozinemab and nivisnebart. So there's definitely a reason this stock has been beaten down. RReuters
That's actually why I'm interested.
You now have:
Genentech validation + $100M upfront + potentially much longer cash runway + an upcoming ABC-focused R&D event + a pipeline that could potentially generate multiple shots on goal.
But you also have:
A history of clinical failures + mostly early/preclinical ABC programs + the possibility that October 13 doesn't deliver anything meaningful.
I'm not saying ALEC is going to 5x or 10x. I have no idea.
I'm just saying the risk/reward looks a lot more interesting to me after the Genentech deal, and October 13 seems like the next obvious date to watch.