Alector stock downgraded by William Blair after Phase III failure

Investing.com - Alector Inc. (NASDAQ:ALEC), currently trading at $3.21 and according to InvestingPro analysis showing undervalued potential, has been downgraded from Outperform to Market Perform by William Blair following a Phase III clinical trial failure.

The downgrade comes after the company’s latozinemab treatment for frontotemporal dementia with progranulin mutations (FTD-GRN) missed its primary endpoints in the INFRONT-3 study, leading to the discontinuation of the program.

William Blair noted that despite the trial successfully elevating progranulin (PGRN) levels in both plasma and central nervous system to normal levels, this did not translate to clinical benefits for patients in the study.

The firm observed that Alector’s shares traded down approximately 50% in after-hours trading following the announcement, falling below their estimated cash per share value of $2.51.

William Blair indicated that investor focus will now shift to data from Alector’s Phase II PROGRESS-AD study expected in the first half of 2026, as well as the company’s preclinical ABC platform, which may present business development opportunities. With the next earnings report due on November 11, investors can access detailed analysis and 10+ additional ProTips through InvestingPro’s comprehensive research report.

In other recent news, Alector Inc . has faced a series of downgrades from notable financial firms following the failure of its Phase 3 INFRONT-3 trial for latozinemab, a treatment for frontotemporal dementia. Mizuho downgraded Alector from Outperform to Neutral, adjusting its price target from $3.50 to $1.50 due to the trial’s disappointing results. Similarly, TD Cowen changed its rating from Buy to Hold after the trial failed to meet its primary and secondary endpoints. Cantor Fitzgerald also downgraded the stock from Overweight to Neutral, citing the lack of positive benefits on key biomarkers. The trial’s failure to demonstrate efficacy in slowing disease progression has led to a reevaluation of the treatment’s potential. Despite these setbacks, H.C. Wainwright has maintained a Buy rating on Alector, with a price target of $10.00, based on upcoming Q4 2025 results. The firm outlines potential scenarios for stock performance depending on future trial outcomes. These developments have significant implications for Alector’s future strategies and investor confidence.

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