Alto Neuroscience stock initiated at Buy by BTIG on precision psychiatry approach

Investing.com - BTIG initiated coverage on Alto Neuroscience (NYSE:ANRO) with a Buy rating and a $27.00 price target on Monday, citing the company’s innovative approach to psychiatric drug development. This target represents a 123% upside from the current price of $12.11, with the analyst consensus also strongly bullish. According to InvestingPro data, the stock has already delivered an impressive 167.92% return over the past year.

The research firm highlighted Alto’s focus on next-generation psychiatry drugs for major depressive disorder (MDD) and treatment-resistant depression (TRD), supported by biomarkers that identify patient subgroups most likely to respond to specific treatments. BTIG noted that Alto selects biomarkers with "real-world" utility that can be routinely used outside academic centers.

Alto’s methodology includes rigorous validation of biomarkers to ensure they’re truly predictive of clinical results, combined with careful clinical trial management to minimize site-level inconsistencies. According to BTIG, this approach of identifying patients likely to show the largest treatment effects while running trials with reduced noise represents "the frontier of the field." InvestingPro data shows Alto holds more cash than debt on its balance sheet, with a strong current ratio of 15.42, though the company is not yet profitable with a diluted EPS of -$2.31.

BTIG pointed to Alto’s recent acquisition of ALTO-207, a combination therapy containing pramipexole (a serotonin D3 > D2 receptor agonist) and ondansetron, which has shown treatment effects approximately three times larger than many approved depression drugs. The combination reportedly allows faster titration to effective doses with improved safety while maintaining strong efficacy.

The research firm noted that Alto has four major data readouts scheduled over the next two years, including three Phase 2b trials that could each represent significant inflection points for the stock. A Phase 2b trial for ALTO-207 is expected to begin in mid-2026, followed by a Phase 3 trial in 2027. Investors should note that Alto’s earnings report is just 2 days away on November 19, which could provide further insights into the company’s cash burn rate. InvestingPro identifies 8 additional key factors that could impact Alto’s stock performance.

In other recent news, Alto Neuroscience has announced plans to accelerate the development of its treatment-resistant depression drug, ALTO-207, following a successful meeting with the FDA. This development is backed by a $50 million private placement financing, which will support the initiation of a Phase 2b study by mid-2026 and a Phase 3 trial by early 2027. The financing was led by Perceptive Advisors with participation from Commodore Capital, Vestal Point Capital, Vivo Capital, and other biotech investors.

In response to these advancements, H.C. Wainwright has significantly raised its price target for Alto Neuroscience to $50, maintaining a Buy rating. Similarly, Baird has increased its price target to $22, highlighting clinical progress and reevaluation of the company’s program values. These updates follow Alto’s third-quarter 2025 financial results and emphasize the company’s strengthened financial position.

The recent developments mark a pivotal moment for Alto Neuroscience as it moves forward with its ambitious plans for ALTO-207. Analysts from both Baird and H.C. Wainwright have expressed confidence in the company’s direction, as evidenced by their price target upgrades.

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