Executive Summary

Q2 2024 collaboration revenue was $15.1M, down 73% year over year due to prior-year non-cash AL101 contract modification and lower AL002 program revenue, partially offset by latozinemab revenue; net loss was $38.7M ($0.40/share) versus net income of $1.4M in Q2 2023 .
2024 guidance reiterated for collaboration revenue ($60–$70M) and G&A ($60–$70M); R&D tightened to $210–$220M (from $210–$230M previously) .
Cash, cash equivalents and investments were $503.3M, with runway through 2026; pivotal catalysts remain on track: AL002 INVOKE-2 Phase 2 data in Q4 2024 and latozinemab INFRONT-3 Phase 3 readout late 2025/early 2026 .
Management highlighted supportive FDA feedback that PGRN biomarker effects may serve as confirmatory evidence for latozinemab, and strong INVOKE-2 LTE participation (~95% of eligible participants), framing potential upside into year-end; S&P Global consensus estimates were unavailable for this review window .

What Went Well and What Went Wrong

What Went Well

Strong cash runway with $503.3M in cash/investments, sufficient through 2026; management reiterated preparedness to fund key readouts and beyond .
FDA engagement: in a recent Type B interaction, agency indicated plasma/CSF PGRN could serve as confirmatory evidence alongside clinical endpoints for latozinemab, supporting path to potential approval in FTD-GRN .
INVOKE-2 fully enrolled with robust LTE participation (~95% of eligible participants) and biomarker-rich design; management expects comprehensive clinical and biomarker top-line readout in Q4 2024; quote: “we’re going to include…not only the typical top line primary clinical outcomes and safety, but…relevant biomarkers…with the press release” .

What Went Wrong

Collaboration revenue fell to $15.1M in Q2 2024 from $56.2M in Q2 2023, driven by prior-year AL101 non-cash adjustment and AL002 timing effects; resulted in swing from $1.4M net income in Q2 2023 to $38.7M net loss in Q2 2024 .
ARIA-like MRI findings in APOE4 homozygotes required protocol changes; while incidence and severity decreased with enhanced MRI surveillance and titration adjustments, the signal necessitated exclusion of APOE4 homozygotes and monitoring burden .
Estimate benchmarking unavailable: S&P Global consensus for Q2 2024 revenue and EPS could not be retrieved in this session, limiting beat/miss quantification versus Street expectations (see Estimates Context) [GetEstimates error: Daily Request Limit Exceeded].

Financial Results

Income Statement and EPS (vs prior year and prior quarter; estimates unavailable)

Metric	Q2 2023	Q1 2024	Q2 2024	Consensus (Q2 2024)
Collaboration Revenue ($USD Millions)	$56.2	$15.9	$15.1	N/A (S&P Global unavailable)
Total Operating Expenses ($USD Millions)	$59.8	$59.6	$60.7	N/A
Other Income, net ($USD Millions)	$6.4	$7.6	$7.0	N/A
Net Income (Loss) ($USD Millions)	$1.4	$(36.1)	$(38.7)	N/A
Diluted EPS ($)	$0.02	$(0.38)	$(0.40)	N/A

Notes: Year-over-year revenue decline was mainly due to the 2023 AL101 non-cash adjustment and lower AL002 revenue, partially offset by latozinemab program revenue .

Balance Sheet and Liquidity

Metric	Q4 2023	Q1 2024	Q2 2024
Cash, Cash Equivalents & Marketable Securities ($USD Millions)	$548.9	$562.1	$503.3
Total Assets ($USD Millions)	$621.8	$635.5	$570.7
Deferred Revenue ($USD Millions)	$293.8	$277.9	$263.5
Total Liabilities ($USD Millions)	$487.7	$456.6	$420.2
Stockholders’ Equity ($USD Millions)	$134.2	$178.9	$150.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Collaboration Revenue ($USD Millions)	FY 2024	$60–$70	$60–$70	Maintained
R&D Expenses ($USD Millions)	FY 2024	$210–$230	$210–$220	Tightened/lowered upper bound
G&A Expenses ($USD Millions)	FY 2024	$60–$70	$60–$70	Maintained
Cash Runway	Through	2026	2026	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
AL002 INVOKE-2 (TREM2 agonist)	Enrollment complete; LTE initiated; biomarker-rich design highlighted	Fully enrolled; baseline characteristics confirm early AD profile; LTE ~95% eligible enrollment; proportional MMRM/common-close design; comprehensive clinical + biomarker top-line planned	Execution progressing; elevated visibility into data strategy
Latozinemab INFRONT-3 (FTD-GRN)	Target enrollment achieved; Breakthrough Therapy Designation; focus on symptomatic primary analysis	FDA indicated plasma/CSF PGRN could be confirmatory alongside clinical endpoint; biomarkers (GFAP, NFL, volumetric MRI) supportive	Regulatory path clarity increased
AL101/GSK4527226 (PROGRESS-AD)	First patient dosed; AAIC design poster planned	Enrollment ongoing; posters presented at AAIC on PGRN biology and trial design	Program execution steady; scientific rationale reinforced
ABC BBB Platform	Introduced; aim to enhance CNS delivery; portfolio expansion	Virtual R&D event hosted; targets include TfR and CD98hc; versatility/tunability emphasized	Platform visibility increasing
ARIA-like MRI findings	Similar to anti-amyloid ARIA; surveillance added	APOE4 homozygotes discontinued; incidence/severity reduced with surveillance; LTE testing slower titration	Risk managed; learnings continue
Cash Runway	Pro forma $620M (Jan 2024 offer), runway through 2026	$503.3M at Q2; runway through 2026 reiterated	Maintained despite spend cadence

Management Commentary

CEO framing upcoming catalysts: “we remain on track to report data from INVOKE-2…in the fourth quarter…we are encouraged that the recently reported patient baseline characteristics reflect a study population appropriate for the clinical evaluation of a TREM2 agonist” .
On latozinemab regulatory path: “the FDA…would consider the effects of latozinemab on plasma and cerebrospinal fluid…progranulin…as confirmatory evidence…supplementing the potential clinical effects…pending BLA review” .
On INVOKE-2 readout scope: “we’re going to include…not only the typical top line primary clinical outcomes and safety, but…relevant biomarkers…we intend to report out on all of those…with the press release” .
CFO on funding: “Our cash runway extends through 2026…covering…AL002 INVOKE-2…Phase II data readout and…INFRONT-3 Phase III…with the runway coverage extending approximately a year beyond the INFRONT-3 readout” .

Q&A Highlights

AL002 dataset composition and LTE: ~250 completers at 48 weeks; ~50% with 72 weeks; ~⅓ with 96 weeks; LTE remains blinded; APOE4 homozygotes discontinued due to ARIA-like MRI findings .
Latozinemab biomarkers: FDA feedback supports GFAP, NFL, and volumetric MRI as confirmatory evidence with clinical endpoint; management sees potential for full approval but notes accelerated approval as a backup if clinical endpoint is equivocal .
AbbVie option payment timing: concept study package to be shared in Q4; AbbVie has 90 days to opt-in, implying payment timing toward end of Q1/early Q2 thereafter; payment size $250M .
INVOKE-2 analysis approach: proportional MMRM in a common-close design to leverage all data through 48–96 weeks; sensitivity analyses planned; tercile analyses by p-tau also prespecified .
ARIA management: incidence likely increases with surveillance but severity reduced; LTE testing slower titration and lower starting dose to mitigate ARIA-like findings .

Estimates Context

S&P Global consensus for Q2 2024 revenue and EPS was unavailable during this session due to data access limit. As a result, explicit beat/miss versus the Street cannot be quantified in this report. Values retrieved from S&P Global were not available at time of analysis.
Given the YoY revenue drop and swing to loss, we expect Street models to focus on collaboration revenue cadence and the updated (tightened) R&D spend range, with potential estimate adjustments around full-year revenue recognition timing and OpEx mix .

Key Takeaways for Investors

Revenue cadence remains lumpy; Q2’s 73% YoY decline reflects prior-year non-cash AL101 adjustment and program-specific revenue timing—focus shifts to H2 readouts rather than near-term top-line growth .
Regulatory de-risking for latozinemab: FDA confirming biomarker role enhances probability of success; full approval remains goal, but accelerated pathway is a potential backup if clinical signals are directional but not definitive .
AL002 is a differentiated microglial mechanism with add-on potential to anti-amyloids; broad biomarker package and analysis plan improve odds of an actionable dataset in Q4—stock likely to trade on magnitude/consistency across clinical and biomarker endpoints .
AbbVie’s $250M opt-in is a material catalyst; timing suggests opt decision window ~90 days post-concept package—capital inflow would extend runway and validate program .
Cash runway to 2026 provides strategic flexibility entering multiple data readouts and regulatory dialogues; balance sheet supports continued ABC platform development without near-term financing needs under base case .
Watch ARIA-related safety narrative: management’s titration/surveillance mitigations and LTE learnings reduce perceived risk; absence of significant other safety signals is constructive .
Near-term trading: shares likely to be event-driven into Q4; positioning around INVOKE-2 readout (clinical + biomarker scope) and AbbVie option signal may drive volatility and price discovery .

References: Q2 2024 8-K press release and exhibits ; Q2 2024 earnings call transcript –; Q1 2024 8-K –; Q4/FY 2023 8-K –; Q2 2024-related press releases in June .

Alector, Inc. (ALEC)·Q2 2024 Earnings Summary