Street Calls of the Week
Investing.com - H.C. Wainwright has lowered its price target on Alector Inc. (NASDAQ:ALEC) to $5.00 from $10.00 while maintaining a Buy rating following disappointing clinical trial results. The company, currently trading at $1.61 with a market capitalization of $163 million, is considered undervalued according to InvestingPro analysis.
The firm’s decision comes after Alector discontinued latozinemab based on data from the INFRONT-3 trial, which indicated that raising progranulin (PGRN) levels alone may not sufficiently slow disease progression in frontotemporal dementia (FTD). According to InvestingPro data, while the company maintains a strong liquidity position with a current ratio of 3.78, it faces challenges with rapid cash burn and anticipated sales decline this year.
H.C. Wainwright now views the Phase 2 PROGRESS-AD trial of AL101 (nivisnebart) in early Alzheimer’s disease as the next pivotal catalyst, with an interim analysis expected in the first half of 2026 and trial completion later that year.
The firm notes that Alzheimer’s disease differs fundamentally from FTD, with stronger genetic validation linking GRN single nucleotide polymorphisms (SNPs) to Alzheimer’s risk and more standardized biomarkers that could reveal clinically meaningful trends.
Alector’s ABC platform, which has demonstrated 18-32 times greater brain uptake in non-human primates, is now positioned as the company’s central long-term value driver, with programs including AL137, AL050, and ADP064-ABC offering potential upside through multiple development pathways. For deeper insights into Alector’s financial health and growth prospects, including 8 additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Alector Inc . and GSK plc have decided to halt further studies of latozinemab for frontotemporal dementia associated with progranulin gene mutation. This decision follows the results from the INFRONT-3 clinical trial, which met its biomarker co-primary endpoint but failed to show clinical benefit in slowing the progression of the disease. In light of these results, several analyst firms have downgraded Alector’s stock. BTIG downgraded Alector from Buy to Neutral, citing the lack of treatment effect in the trial. Similarly, William Blair lowered its rating from Outperform to Market Perform after the Phase III failure. Mizuho also downgraded the stock to Neutral and reduced its price target, reflecting the negative trial outcomes. Additionally, TD Cowen shifted its rating from Buy to Hold following the missed primary endpoints in the trial. These developments mark significant changes for Alector as the company navigates the implications of the trial results.
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