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Alector, Inc. (ALEC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 collaboration revenue rose sharply to $54.2M, driving a dramatic improvement in GAAP EPS to $(0.02), versus $(0.49) in Q4 2023 and $(0.43) in Q3 2024, as recognition from AL002 and latozinemab programs accelerated; AbbVie-related collaboration revenue was fully recognized by year-end .
  • 2025 guidance reset: collaboration revenue $5–$15M; R&D $175–$185M; G&A $55–$65M, reflecting lower recognized partner revenue in 2025 and disciplined OpEx; cash/investments were $413.4M, funding operations through 2026 .
  • Key clinical catalysts: INFRONT‑3 Phase 3 latozinemab topline in FTD‑GRN by Q4 2025; PROGRESS‑AD Phase 2 AL101 enrollment completion by mid‑2025; AL002 Phase 2 (TREM2) did not meet the primary endpoint, detailed results to be presented April 5, 2025 .
  • Management emphasized regulatory alignment (Breakthrough Therapy) and biomarker strategy for latozinemab; confidence in the totality of evidence to support a potential BLA remains high .

What Went Well and What Went Wrong

What Went Well

  • Strong Q4 revenue uplift and EPS improvement: Collaboration revenue $54.2M vs. $15.2M YoY; GAAP EPS improved to $(0.02), aided by higher program revenue and other income .
  • Clinical execution: INFRONT‑3 nearing readout timeline; PROGRESS‑AD progressing toward full enrollment by mid‑2025 .
  • Strategic pipeline momentum: ABC platform advancing with lead selections for ADP037‑ABC (anti‑Aβ) and ADP050‑ABC (GCase replacement), targeting IND‑enabling studies in 2025 and clinical entry in 2026 .
    • “We are making significant progress… selectively applying our proprietary Alector Brain Carrier… to potentially improve safety and efficacy.” — Sara Kenkare‑Mitra .

What Went Wrong

  • TREM2 program setback: AL002 Phase 2 (INVOKE‑2) did not meet its primary endpoint; results to be presented April 5, 2025, tempering near‑term optionality .
  • 2025 revenue guide reset sharply lower ($5–$15M) post‑full recognition of AbbVie revenue, signaling a trough year for collaboration revenue ahead of major readouts .
  • Cash drawdown through 2024 (from $503.3M at Q2 to $413.4M at year‑end) as programs advance, albeit runway remains through 2026 .

Financial Results

Quarterly Progression (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Collaboration Revenue ($USD Millions)$15.083 $15.342 $54.240
Net Loss ($USD Millions)$(38.676) $(42.220) $(2.074)
GAAP EPS ($)$(0.40) $(0.43) $(0.02)
Total Operating Expenses ($USD Millions)$60.689 $63.776 $61.489

YoY Comparison (oldest → newest)

MetricQ4 2023Q4 2024
Collaboration Revenue ($USD Millions)$15.190 $54.240
Net Loss ($USD Millions)$(41.434) $(2.074)
GAAP EPS ($)$(0.49) $(0.02)
Total Operating Expenses ($USD Millions)$62.643 $61.489

Margins vs. Prior Periods and Estimates

MetricQ2 2024Q3 2024Q4 2024Vs. Estimates
Operating Margin (%)N/A (not disclosed)N/A (not disclosed)N/A (not disclosed)N/A (consensus unavailable)
Net Income Margin (%)N/A (not disclosed)N/A (not disclosed)N/A (not disclosed)N/A (consensus unavailable)
Note: Margin metrics were not provided in company materials; S&P Global consensus data was unavailable at time of retrieval.

Segment Breakdown

  • Not applicable; revenue primarily reported as “Collaboration revenue” without segment detail .

KPIs

KPIQ3 2024Q4 2024
Cash, Cash Equivalents & Investments ($USD Millions)$457.202 $413.397
Total Assets ($USD Millions)$516.023 $468.303
Deferred Revenue ($USD Millions)$248.202 $195.832
Total Liabilities ($USD Millions)$397.090 $341.503
Stockholders’ Equity ($USD Millions)$118.933 $126.800
Shares (Q4 basic & diluted)N/A98,319,416

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Collaboration Revenue ($USD Millions)FY 2025N/A$5–$15 New
Total R&D Expenses ($USD Millions)FY 2025N/A$175–$185 New
Total G&A Expenses ($USD Millions)FY 2025N/A$55–$65 New
MarginsFY 2025Not providedNot provided N/A
OI&E / Tax RateFY 2025Not providedNot provided N/A

Context: 2024 guidance (provided in prior quarters) was collaboration revenue $60–$70M; R&D $210–$220M; G&A $60–$70M, reflecting higher partner revenue recognition in 2024 .

Earnings Call Themes & Trends

TopicQ2 2024 (Prior‑2)Q3 2024 (Prior‑1)Q4 2024 (Current)Trend
Progranulin (AL001 latozinemab, AL101)FDA Type B feedback: plasma/CSF PGRN as confirmatory, biomarker alignment INFRONT‑3 baseline: representative population; enrollment completed Oct‑2023 INFRONT‑3 topline by Q4 2025; PROGRESS‑AD enrollment completion mid‑2025 Advancing toward pivotal readout
TREM2 (AL002)INVOKE‑2 fully enrolled; data Q4 2024 Data expected 2024; 98% LTE participation; AbbVie option $250M Did not meet primary endpoint; results April 5, 2025 Negative outcome, clarity forthcoming
ABC platformHosted R&D event; TfR/CD98 shuttle focus Advancing versatile BBB tech Selecting ADP037‑ABC (Aβ) & ADP050‑ABC (GCase); IND‑enabling in 2025 Building preclinical momentum
RegulatoryBreakthrough Therapy for latozinemab; alignment on biomarkers ISFTD baseline poster FDA open to biomarker confirmatory/supportive evidence; high confidence Constructive engagement
Cash runway$503.3M; through 2026 $457.2M; through 2026 $413.4M; through 2026 Lower cash, runway intact
Guidance2024: Rev $60–$70M; R&D $210–$220M; G&A $60–$70M Reaffirmed ranges 2025: Rev $5–$15M; R&D $175–$185M; G&A $55–$65M Reset lower

Management Commentary

  • Strategic positioning: “Alector is entering a potentially transformative period… well‑positioned to advance our mission to deliver transformative therapies” — Arnon Rosenthal (CEO) .
  • Latozinemab path to approval: “Approximately 90% power to detect a 40% slowing… FDA would consider plasma/CSF PGRN as confirmatory evidence… supportive fluid/imaging biomarkers” — Gary Romano (CMO) .
  • ABC differentiation: “Versatile and tunable… optimize efficacy and safety… targeted delivery across BBB; selecting lead candidates for anti‑Aβ and GCase programs” — Sara Kenkare‑Mitra (President & Head of R&D) .
  • Financial discipline: “Strong cash position… 2025 revenue $5–$15M; R&D $175–$185M; G&A $55–$65M” — Marc Grasso (CFO) .

Q&A Highlights

  • INFRONT‑3 design and power: Distribution targeted early symptomatic (CDR‑FTLD global 0.5/1/2), capped higher severity to preserve responsiveness; 90% power for 40% slowing; 25% slowing expected to be statistically significant; FDA alignment on biomarkers and confirmatory evidence .
  • Presymptomatic cohort: Progression threshold now thought to be 2–4 years; symptomatic cohort prioritized for primary analysis with presymptomatic sensitivity analysis .
  • AL101 read‑through vs INFRONT‑3: Mechanisms and indications differ; potential protection in AD via progranulin increase; outcomes may diverge .
  • ABC platform vs peers: Tunable design, TFR affinity optimization, fully active Fc for anti‑Aβ; engineered GCase stability and activity; potential for subcutaneous delivery and reduced ARIA .
  • Nucleic acids approach: Leaning toward siRNA vs ASOs due to potency and safety indications; evaluation ongoing over next ~6 months .
  • Partnering interest: Noted demand for mature BBB technologies; inbound interest for potential out‑licensing/non‑dilutive funding .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 revenue and EPS was unavailable at time of retrieval due to SPGI request limits; therefore, comparisons vs. estimates could not be presented. Values would be retrieved from S&P Global consensus when available.
  • Near‑term estimate revisions likely reflect: (1) Q4 revenue outperformance vs prior run‑rate; and (2) 2025 collaboration revenue guidance reset to $5–$15M post‑full recognition of AbbVie revenue, implying a trough year ahead of clinical readouts .

Key Takeaways for Investors

  • Q4 print was strong on revenue/EPS, driven by collaboration revenue recognition; however, 2025 revenue guidance signals a reset year before major catalysts — plan positioning and liquidity accordingly .
  • Latozinemab’s pivotal readout by Q4 2025 is the primary stock driver; management’s FDA alignment on biomarker strategy supports a potential BLA pathway even if clinical effect size is modest .
  • AL101’s Phase 2 enrollment completion by mid‑2025 provides a secondary catalyst in early AD; mechanistic differentiation vs FTD makes outcomes partially independent .
  • TREM2 (AL002) disappointment removes a near‑term upside lever; watch April 5 presentation for deeper insights and potential partnering ramifications .
  • Cash runway through 2026 reduces financing overhang; monitor cash burn as ABC programs advance toward IND‑enabling studies .
  • ABC platform could be an underappreciated asset across antibodies/enzymes/siRNA, with potential non‑dilutive monetization opportunities via out‑licensing .
  • Trading setup: Expect estimate resets and valuation to hinge on clinical momentum headlines (enrollment milestones, biomarker updates, regulatory interactions); skew exposure ahead of INFRONT‑3 timing while managing 2025 revenue trough risk .