Executive Summary

Q3 2024 revenue was $15.34M (collaboration), up 68% YoY, with GAAP EPS of -$0.43 versus -$0.53 a year ago; management reiterated FY24 guidance and cash runway through 2026 .
Sequential results were broadly stable (revenue ~$15M across Q1–Q3), while OpEx drifted slightly higher on R&D and Q3 G&A impairment tied to consolidating facilities; net loss improved YoY on higher revenue .
Management highlighted late‑stage catalysts (AL002 Phase 2 INVOKE‑2, latozinemab Phase 3 INFRONT‑3) and progress on the ABC blood‑brain‑barrier platform; FY24 collaboration revenue, R&D, and G&A guidance were maintained from Q2 to Q3 .
Post‑quarter, AL002 INVOKE‑2 failed to meet the primary endpoint and showed no favorable clinical or biomarker effects; Alector stopped the LTE study—this outcome is a key stock narrative driver into 2025 (pipeline focus shifts toward GRN/progranulin and ABC) .

What Went Well and What Went Wrong

What Went Well
- Collaboration revenue rose to $15.34M (+$6.23M YoY), driven mainly by AL002 program revenue recognition, contributing to a narrower YoY net loss (-$42.2M vs. -$44.5M) .
- Management reiterated FY24 guidance and ended Q3 with $457.2M cash/investments, reiterating runway through 2026—supporting late-stage and platform development .
- Strategic portfolio progress: continued advancement of latozinemab (INFRONT‑3) and AL101/GSK4527226 (PROGRESS‑AD), and investment in ABC BBB‑delivery platform to improve CNS penetrance .
What Went Wrong
- Q3 collaboration revenue missed some third‑party consensus estimates (actual $15.34M vs. $16.33M), though GAAP EPS beat (‑$0.43 vs. ‑$0.53) (S&P Global consensus unavailable; third‑party shown for context) .
- G&A increased YoY to $15.8M due to impairment charges tied to consolidating into South San Francisco headquarters .
- Post‑quarter outcome: AL002 INVOKE‑2 failed the primary endpoint with no supportive biomarker or clinical signals; LTE was terminated, creating a setback for the TREM2 program .

Financial Results

Metric	Q1 2024	Q2 2024	Q3 2024
Collaboration Revenue ($USD Millions)	$15.89	$15.08	$15.34
R&D Expense ($USD Millions)	$45.17	$46.31	$48.00
G&A Expense ($USD Millions)	$14.43	$14.38	$15.78
Total Operating Expenses ($USD Millions)	$59.60	$60.69	$63.78
Loss from Operations ($USD Millions)	$(43.71)	$(45.61)	$(48.43)
Other Income, net ($USD Millions)	$7.64	$7.00	$6.21
Net Loss ($USD Millions)	$(36.08)	$(38.68)	$(42.22)
GAAP EPS ($)	-$0.38	-$0.40	-$0.43
Cash, Cash Equivalents & Investments ($USD Millions)	$562.08	$503.33	$457.20

YoY comparison (Q3 2024 vs. Q3 2023):

Revenue: $15.34M vs. $9.11M (+68%) .
Net Loss: -$42.22M vs. -$44.48M (improved) .
GAAP EPS: -$0.43 vs. -$0.53 (improved) .
R&D: $48.00M vs. $46.33M (higher due to PROGRESS‑AD initiation in 2024) .
G&A: $15.78M vs. $13.36M (impairment tied to facility transition) .

KPI notes:

Cash runway: management expects cash, cash equivalents and investments ($457.2M) to fund operations through 2026 .
Pipeline progress: INFRONT‑3 (latozinemab) progressing toward late‑2025/early‑2026 topline; AL101/GSK4527226 >1/3 enrolled for PROGRESS‑AD as of Q3 .

Guidance Changes

Metric	Period	Previous Guidance (Q2 2024)	Current Guidance (Q3 2024)	Change
Collaboration Revenue	FY 2024	$60M–$70M	$60M–$70M	Maintained
R&D Expense	FY 2024	$210M–$220M (tightened from prior)	$210M–$220M	Maintained
G&A Expense	FY 2024	$60M–$70M	$60M–$70M	Maintained

Notes: Q1 initially guided R&D at $210M–$230M; tightened to $210M–$220M in Q2 and maintained in Q3 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2024)	Trend
TREM2/AL002 (INVOKE‑2)	Fully enrolled; baseline characteristics confirm representative early AD population; LTE enrollment ~95%; biomarker‑rich trial, proportional MMRM primary analysis; ARIA‑like MRI findings—protocol adaptations, slower titration in LTE .	On track for 2024 readout at time of Q3 release; reiteration of strategy and potential AbbVie $250M option upon opt‑in .	Neutral in Q3; post‑quarter data negative (see below) .
Progranulin/latozinemab (INFRONT‑3)	BTD; Type B FDA feedback—PGRN in plasma/CSF and disease‑relevant biomarkers as confirmatory evidence supporting clinical endpoints; late‑2025/early‑2026 readout timeframe .	INFRONT‑3 continues; baseline characteristics presented at ISFTD 2024 .	Positive regulatory clarity maintained .
AL101/GSK4527226 (PROGRESS‑AD)	Enrollment ongoing; PK/PD differentiated from latozinemab; AD and Parkinson’s broader potential; AAIC 2024 posters .	>1/3 enrolled by Q3; dosing since Feb 2024 .	Steady execution .
ABC BBB platform	Introduced mid‑year; enables deeper CNS delivery at lower doses; tunable via TfR/CD98hc vectors .	Strategically leveraged across pipeline; R&D platform buildout continues .	Positive platform visibility .
Cash/Runway	Runway through 2026 reiterated on Q2 call and materials .	Runway through 2026 reiterated with $457.2M cash/investments .	Stable funding .

Post‑quarter update (Nov 25, 2024): AL002 INVOKE‑2 failed to meet the primary endpoint and showed no favorable secondary or biomarker effects; LTE stopped .

Management Commentary

CEO (Q3 release): “We continue to make meaningful progress… and remain on track to report data in 2024 from the INVOKE‑2 Phase 2 trial of AL002… We also believe that the broad mechanism of AL002 may have the potential to deliver potent and durable therapeutic benefits, both as a standalone therapy and in combination with anti‑amyloid beta antibodies.”
R&D Head (Q3 release): “We are actively advancing our Alector Brain Carrier, ABC, a proprietary versatile blood-brain barrier technology… we are strategically leveraging this platform across our portfolio.”
Q2 call context (trial design): “We intend to use a proportional analysis approach… enabling us to use all the data collected… out to 48, 72 and 96 weeks,” to increase power and capture emerging effects .

Q&A Highlights

INVOKE‑2 data composition and LTE: ~250 completers at 48 weeks; ~50% to 72 weeks; ~⅓ to 96 weeks at database lock; LTE remains blinded with high rollover rate (~95%) .
ARIA‑like MRI findings: APOE4 homozygotes discontinued earlier; surveillance increased; exploring lower starting dose and slower titration in LTE to mitigate radiographic findings .
Regulatory path for latozinemab: FDA indicated PGRN (plasma/CSF) and disease‑relevant biomarkers (e.g., GFAP, NfL, volumetric MRI) could provide confirmatory evidence with clinical endpoints; accelerated approval could be a backup if clinical effect is equivocal (not yet discussed with FDA) .
AbbVie option mechanics: $250M option decision within ~90 days after concept package delivery; expected timing late Q1/early Q2 following readout .
Mechanism positioning: AL002 aims to restore microglial function beyond amyloid clearance; clinical judgment not limited to reaching 24‑centiloid threshold as with anti‑amyloid mAbs .

Estimates Context

S&P Global consensus estimates were unavailable due to API rate limits at the time of retrieval.
Third‑party sources indicate Q3 2024 GAAP EPS beat and revenue miss versus consensus: Actual EPS -$0.43 vs. -$0.53 consensus (beat by $0.10); revenue $15.34M vs. $16.33M consensus (miss by ~$0.99M, -6.06%) .

Metric	Actual (Q3 2024)	Consensus	Surprise
GAAP EPS ($)	-$0.43	-$0.53 (third‑party)	+$0.10
Revenue ($USD Millions)	$15.34	$16.33 (third‑party)	-$0.99 (-6.06%)

Note: S&P Global consensus unavailable; third‑party estimates shown for directional context.

Key Takeaways for Investors

Q3 2024 financials were steady sequentially with improved YoY loss profile on higher collaboration revenue; FY24 guidance maintained and cash runway through 2026 reiterated .
The pipeline narrative pivoted materially post‑quarter: AL002 INVOKE‑2 failed primary and key secondary/biomarker endpoints; LTE stopped—shifting near‑term focus to latozinemab (INFRONT‑3) and AL101/GSK4527226 (PROGRESS‑AD) plus ABC platform .
Latozinemab regulatory path benefits from FDA feedback (biomarkers as confirmatory evidence) ahead of late‑2025/early‑2026 topline, supporting medium‑term optionality despite AL002 setback .
Operating discipline remains important: R&D/G&A guidance held; G&A elevated in Q3 due to one‑time impairment tied to facility consolidation—watch forward G&A normalization .
Partnership dynamics still matter: AL002 opt‑in economics with AbbVie were an upside lever pre‑readout; after AL002 failure, future collaboration milestones may skew to GSK programs (latozinemab/AL101) .
Near‑term stock drivers: digestion of AL002 failure, any portfolio reprioritization, GSK program updates, and ABC platform milestones .
For estimate modeling, use third‑party context with caution and note S&P Global consensus was unavailable at time of this recap; management’s FY24 guidance bounds remain the primary anchors .

Appendix: Additional Context and Cross‑References

Press release (Q3 2024 results): revenue drivers (AL002 program), OpEx details (R&D: PROGRESS‑AD initiation; G&A: impairment), cash and runway .
Prior quarter press releases for trend: Q2 2024 (guidance tightening on R&D; cash $503.3M) ; Q1 2024 (initial FY24 ranges; cash $562.1M) .
Post‑quarter press release (AL002 INVOKE‑2 results): failed clinical and biomarker endpoints; LTE termination; workforce reduction to align resources (runway through 2026 reiterated) .

Alector, Inc. (ALEC)·Q3 2024 Earnings Summary