Earnings call transcript: Alector beats Q2 2025 EPS and revenue forecasts

Alector Inc. (ALEC) reported its second-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of -$0.30 compared to the forecasted -$0.47, representing a surprise of 36.17%. The company also reported revenue of $7.9 million, significantly exceeding the anticipated $4.7 million, marking a 68.09% surprise. Following the announcement, the company’s stock price increased by 2.1% in after-hours trading, closing at $1.46. According to InvestingPro analysis, Alector appears undervalued at current levels, though the company’s financial health score remains weak at 1.55 out of 5.

Key Takeaways

• Alector’s EPS and revenue exceeded forecasts, contributing to a positive market reaction.
• The company maintains a strong cash position, with $307.3 million expected to last into 2027.
• Key product developments include the Phase III trial of Latozinimab for Frontotemporal Dementia (FTD) and a Phase II study for Alzheimer’s disease.
• Alector’s proprietary technology enhances drug delivery across the blood-brain barrier.

Company Performance

Alector’s performance in the second quarter of 2025 was marked by significant achievements in both financial results and product development. The company reported better-than-expected earnings and revenue, driven by its innovative pipeline and strategic focus on neurodegenerative diseases. This performance contrasts with some previous quarters where results were more aligned with forecasts, highlighting the company’s progress in executing its growth strategy.

Financial Highlights

• Revenue: $7.9 million, up 68.09% from the forecast.
• Earnings per share: -$0.30, beating the forecast by 36.17%.
• Cash position: $307.3 million, providing a financial runway into 2027.

Earnings vs. Forecast

Alector’s second-quarter earnings per share of -$0.30 exceeded the forecast of -$0.47, delivering a 36.17% positive surprise. This marks a notable improvement from previous quarters, where earnings were more closely aligned with expectations. Revenue also surpassed forecasts significantly, with actual figures reaching $7.9 million against a forecast of $4.7 million, representing a 68.09% surprise.

Market Reaction

Following the earnings announcement, Alector’s stock experienced a 2.1% increase in after-hours trading, closing at $1.46. While the stock has shown strong momentum with a positive return over the last three months, InvestingPro data reveals a significant 71.37% decline over the past year. The stock currently trades at 1.54x book value, with analysts setting price targets ranging from $1 to $10 per share. Get access to 12 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report.

Outlook & Guidance

Looking forward, Alector anticipates collaboration revenue of $13-18 million for 2025, with research and development expenses projected at $130-140 million. The company continues to focus on its lead program, Latozinimab, with pivotal Phase III trial results expected by mid-Q4 2025. Additionally, Alector is advancing its preclinical pipeline, exploring progranulin elevation in multiple neurodegenerative diseases.

Executive Commentary

"Our goal is to deliver therapies that eradicate neurodegeneration and improve patient outcomes," stated Arnon Rosenthal, CEO. Chief Medical Officer Giacomo Salvadore added, "We believe the strength of our clinical data, the alignment with regulators, and the breadth of our clinical and biomarker package position us well."

Risks and Challenges

• Regulatory hurdles: Successful trial outcomes and regulatory approvals are critical for future growth.
• Market competition: The biotechnology sector is highly competitive, with numerous players developing similar therapies.
• Financial sustainability: Managing research and development expenses while maintaining a strong cash position is crucial.

Q&A

During the earnings call, analysts inquired about the FDA’s request to add plasma progranulin as a co-primary endpoint in trials. Executives confirmed no major safety signals in clinical trials and expressed openness to regulatory discussions based on trial results.

Full transcript - Alector Inc (ALEC) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the Elektor Second Quarter and Mid Year twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press 11 again. As a reminder, this conference call is being recorded. I would now like to turn the call over to Katie Hogan, Senior Director of Corporate Communications and Investor Relations. Please go ahead.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor: Thank you, operator, and hello, everyone. Earlier this afternoon, we released our financial results for the second quarter twenty twenty five. The press release is available on our website at www.electorv.com, and our 10 Q was filed with the Securities and Exchange Commission this afternoon. Joining me on the call today are Doctor. Arnon Rosenthal, Co Founder and CEO Doctor.

Sara Kankari Mitra, President and Head of Research and Development Doctor. Giacomo Salvadore, Chief Medical Officer Neil Berkley, Chief Business Officer and Interim Chief Financial Officer and guest speaker Doctor. Ryan Darby, Associate Professor of Neurology and Director of the Frontal Temporal Dementia Clinic at Vanderbilt University Medical Center, as well as a paid consultant to Elektar, who will provide clinical context on frontal temporal dementia. After our formal remarks, we’ll open the call for Q and A. I’d like to note that during this call we’ll be making a number of forward looking statements.

Please take a moment to review our slide in the webcast, which contains our forward looking statement disclosure, and we also encourage you to review our SEC filings for more information. I would now like to turn the call over to Arnon Rosenthal, Chief Executive Officer. Arnon?

Arnon Rosenthal, Co-Founder and CEO, Elektor: Thank you, Katie, and good afternoon, everyone. As we enter the 2025, Alecto is approaching an important inflection point. By mid fourth quarter, we expect top line data from our pivotal Phase III INFROM3 trial of Latozinimab, our most advanced clinical program. This trial represents the first rigorous test of a well known elevating approach to treating frontotemporal dementia due to the GRN gene mutation, a fatal and rare form of dementia that strikes people decades earlier than Alzheimer’s disease and currently has no approved therapies. We designed latozenumab based on clear biological and human genetic rationale to elevate progranulin levels by blocking its internalization and degradation by sultiline receptor.

FTD GRN is directly caused by progranulin deficiency, and restoring it has the potential to alter the cause of the disease. Our earlier studies in participants with STT GRN provided encouraging signals, both in biomarkers and in clinical progression. INFront three will allow us to determine whether those findings hold up in a larger placebo controlled, double blinded trial. Together with our partner GSK, we are advancing launch readiness activities to help ensure we are well positioned to support the potential commercialization of flotetuzumab. Additionally, we are also excited about our late stage clinical program in early Alzheimer’s disease, where we are advancing AL-one 101, our second provalonin elevating antibody, which is currently in Phase II trial.

There is a strong genetic and biological rationale for the role of progranulin in Alzheimer’s disease. Loss of function mutations in progranulin have been shown to increase the risk of Alzheimer’s disease in humans, while overexpression of progallonin has been shown to be protective in animal models of Alzheimer’s disease. Enrollment of this Phase II trial was completed in April, and trial completion is expected in 2026. AL-one hundred one shares a similar mechanism with latozenumab, but its pharmacological properties make it suitable for more prevalent neurodegenerative diseases. In parallel, we are investing in a research and preclinical pipeline designed to fuel our future.

These programs include our proprietary anti amyloid beta antibody for Alzheimer’s disease an engineered GK’s enzyme replacement therapy for Parkinson’s disease, and an anti tau siRNA for Alzheimer’s disease, all enabled by Electric Brain Carrier, our proprietary technology platform that enables us to deliver antibodies, proteins, enzymes, and siRNA across the blood brain barrier. This opened the door to more effective brain directed therapies across multiple modalities. Our late stage clinical programs, combined with our early stage pipeline enabled by our proprietary blood brain barrier technology, gives us the opportunity to deliver both near term catalysts and sustained pipeline momentum. Our goal is to deliver therapies that eradicate neurodegeneration and improve patient outcomes. And in doing so, build a durable, high impact biotechnology company.

Our commitment to tackling neurodegeneration drives us to engage experts who understand these diseases firsthand. It is my pleasure to introduce Doctor. Ryan Darby, Associate Professor of Neurology and Director of the Frontotemporal Dementia clinic at Vanderbilt University Medical Center. Doctor. Darby brings deep clinical expertise in frontotemporal dementia and will speak to the urgent unmet need in this disease.

Doctor. Darby received his undergraduate degree from Princeton University in Psychology and Neuroscience and his medical degree from Vanderbilt University. He trained in neurology at MGH and Brigham and Women’s Hospital as part of the Partnered Neurology Harvard Medical School program. Doctor. Darby’s research focuses on neurodegeneration’s impact on brain networks related to behavior and decision making.

His contributions to the field have been recognized with awards such as the Norman Gershwin Prize in Behavioral Neurology. Doctor. Darby, thank you for joining us today. I will now turn the call over to you.

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: Thank you so much for the kind introduction. Today, I’ll be providing an overview of frontotemporal dementia, or FTD, which is a complex and devastating group of neurodegenerative conditions that impact thousands of individuals and their families worldwide. We’ll touch on its subtypes, the clinical progression, the genetic drivers like FTD, GRN, and the current and future landscape of treatment and diagnosis. FTD is not a single disease, but instead a group of disorders caused by progressive neuronal cell loss in the brain’s frontal and temporal lobes. This neurodegeneration leads to a broad range of symptoms, and we categorize FTD into different clinical subtypes based on those symptoms and the areas of the brain that are affected first.

First, we have the behavioral variance FTD, or BV FTD, which is the most common form. It’s characterized by striking changes in personality and behavior, such as apathy, impulsivity, and socially inappropriate behaviors. Next, there’s primary progressive aphasia, or PPA, which primarily impacts language. In FTD, this is further subdivided into two main subtypes, the semantic variants, where individuals lose their understanding of word meaning, and the nonfluent variant where speech becomes halting and effortful. Finally, we have FTD that presents with motor or movement related symptoms, and this can, present with overlapping conditions such as progressive supranuclear palsy or PSP, cortical basal syndrome or CVS, and ALS FTD, which combines features of motor neuron disease with FTD.

These clinical presentations fall under the broad umbrella term frontotemporal lobar degeneration, or FTLD, which is the pathological term reflecting that underlying biology. FTD is most commonly associated with the buildup of two key proteins, t d p 43 and tau. However, determining which protein is involved in a living patient is extremely difficult unless there’s a known genetic mutation or after death at a postmortem examination. FTD itself is more rare than Alzheimer’s, but it’s still the most common cause of dementia in individuals 60. In The US, the incidence is estimated to be fifteen to twenty two cases per hundred thousand person years, which results in a prevalence of about fifty to sixty thousand concurrent cases in The US.

In Europe, the number is closer to a hundred and ten thousand. The toll on individuals and their families in FTD is profound. FTD compared to other dementias often leads to greater functional impairments in the activities of daily living, earlier onset, frequently disrupting careers, relationships, and independence. Caregivers in FTD often report a higher burden and more painful loss of sense of personal identity and personhood compared to Alzheimer’s disease, in part because these patients are presenting with emotionally disengaged symptoms and inappropriate behaviors. Approximately thirty percent of FTD cases have a strong family history.

We now recommend that there are three main autosomal dominant genetic mutations in FTD, the c nine ORF72 mutation, the MAPT mutation, and the GRN mutation. There’s at least 20 other rare mutations that are also known to be associated with FTD. Today, we’re focusing on FTD GRN, which represents about five to ten percent of the FTD cases. This is a form that results from mutations in the GRN gene, leading to reduced levels of progranulin, a critical protein for neuronal survival and function. Progranulin deficiency contributes to neurodegeneration through multiple potential mechanisms, including lysosomal dysfunction and inflammation.

Emerging biomarkers such as neurofilament light chain, or NfL, and changes in structural brain MRI are helping us to track disease progression and onset of neuronal loss more objectively. Unfortunately, there are no FDA approved disease modifying treatments for FTD. Management currently is largely symptomatic and supportive, often involving behavioral strategies, speech therapy, and medications targeting mood or agitation. However, there is hope on the horizon. With ongoing clinical trials now targeting genetic forms of FTD, including GRN mutations, This offers an exciting opportunity to address the disease at the molecular level and develop new therapies.

However, we face several key challenges. First is the diagnostic complexity. FDD is frequently misdiagnosed or diagnosed late in the disease course. Genetic testing is not routinely performed, and even in younger patients, we often lack information about the underlying protein pathology, making it difficult to tailor interventions or enroll appropriate patients in clinical trials. Trial design is another challenge.

Symptoms vary widely, not just from patient to patient, but even in the same person over time, and that can include the full range of behavioral, psychiatric, language, and motor features. We need better tools to identify patients earlier in that disease course and better ways of tracking that disease over time. Finally, there is an urgent need for disease modifying therapies, especially in the genetic subtypes where the biology is known. Advances in biomarkers are helping move the field forward by enabling early diagnosis, better stratification, and more sensitive tracking of disease progression. So in closing, FTD is a complex and deeply impactful disease, both biologically and also personally for the patients and families.

With increased understanding of the genetic underpinnings like GRN mutation and the development of robust biomarkers, we’re now in the position to truly develop transformative therapies. So with that, I’ll turn the call over to Giacomo Salvador, Elektar’s Chief Medical Officer.

Giacomo Salvadore, Chief Medical Officer, Elektor: Thank you, Doctor. Darby, that insightful overview of the clinical realities in urgent unmet need in front of them for dementia. Your perspective helps frame the importance of our work as we approach the INFROM free data readout by mid Q4. As Doctor. Darby noted, FTD GRN accounts for approximately five to ten percent of all STD cases.

This represents about eight thousand to seventeen thousand cases in The US and EU alone. It is striking how many people living with FTD still have no approved treatment options today, underscoring the need for continued innovation and urgency in this field. With this context in mind, I want to provide a deeper overview of the science behind our approach, the data we have generated to date, and how our pivotal Phase III INFROM-three trial is structured. Latotinemab is a novel investigational human monoclonal antibody developed in collaboration with GSK and we believe it is the most advanced therapeutic candidate in development for FTD GRN. We have evaluated ladocinemab in both Phase I and Phase II clinical studies.

In Phase I, the treatment was well tolerated in healthy volunteers and dose dependent increases in plasma progranulin were observed. Our open label Phase II INFROM two study enrolled 12 participants with symptomatic FDD GRN. Treatment with laduzinumab normalized plasma and CSF progranulin levels, resulting in a two to threefold increase that was rapid and sustained over the course of treatment. We also assessed a panel of disease relevant biomarkers, including neurofilament light chain glial fibrillary acidic protein and markers of lysosomal function and neuroinflammation. These biomarkers moved in the direction consistent with slowing disease progression.

On the clinical side, we used the CDR plus NAC FTLD SB, a validated scale for FTD that captures cognitive, functional, behavioral, and language changes. In a blinded propensity match comparison to participants from the GENFY-two natural history study, treatment with ladudinumab was associated with a forty eight percent slowing of disease progression over twelve months. These are the same clinical measures and core biomarkers being carried forward into INFRAN3, our ongoing pivotal Phase three trial. INFRAN3 is a ninety six week randomized, double blind, placebo controlled, global trial evaluating latoxinemabene 100 three symptomatic and sixteen at risk individuals with confirmed GRN mutations. Participants received sixty mgkg of latoxinemab or placebo via intravenous infusion every four weeks.

The primary analysis will be conducted in symptomatic participants and we plan to include at risk participants in a sensitivity analysis. The clinical primary endpoint is the CDR plus NaC FTLD sum of boxes. Following engagement with the FDA and in line with the agency’s recommendation, we and GSK have made the decision to amend a statistical analysis plan for Infron three to include plasma progranulin as a co primary endpoint along with the CDR plus NaC FTLb SB. Keep in mind that an approximate 50% reduction in progranulin is a causal factor for STT GRN. Additionally, we are collecting fluid and imaging biomarkers, including plasma NfL, GFAP and volumetric MRI.

We believe this positions us to deliver a clear and well aligned data package later this year. InfraM3 is approximately 90% powered to detect a 40% slowing of disease progression. If our key design assumptions hold, a 25% slowing is expected to be statistically significant and we believe that will represent a meaningful clinical benefit in a disease with no approved treatment. Latuzumab has been generally well tolerated across our clinical trials, with no major safety signal observed today in either healthy volunteers or patients with FTD GRM. As a reminder, laduzinumab has received breakthrough therapy and fast track designation from the FDA, endorphin drug designation from both the FDA and the EMA.

Following the receipt of the breakthrough therapy designation, which was granted based on our Phase II data, we had a Type B interaction with the FDA to address key elements of a potential future biologic license application. The agency indicated that the totality of the evidence, including clinical outcomes and disease relevant biomarker, could support a submission for full approval, pending BLA review. Additionally, we align on a set of fluid and imaging biomarkers that may serve as supportive efficacy data. We and GSK are preparing for potential BLA and MAA submissions in 2026, seeking full approval based on the strength of our trial design. Lapozinema represents a biomarker driven, mechanistically targeted approach to treating genetically defined FTD GRN, a severe neurodegenerative disease with no approved therapies.

We believe the strength of our clinical data, the alignment with regulators, and the breadth of our clinical and biomarker package position us well as we prepare for the INFRAN3 readout by mid Q4. Let me also briefly comment on AL-one 101, our second progranulin elevating monoclonal antibody. AL101 is a distinct molecule that targets a different type of osorelin and has a different pharmacokinetic and pharmacodynamic profile, making it suitable for more prevalent neurodegenerative diseases. Importantly, as Arnon mentioned, our rationale for evaluating a progranulin elevating approach in Alzheimer’s disease is grounded in human genetics. Reduced GRN expression has been implicated in Alzheimer’s pathophysiology, supporting the potential of programming modulation in the setting.

AL101 is currently being evaluated in early Alzheimer’s disease, with enrollment in the global Phase II PROGRESS AD study completed in April and trial completion expected in 2026. With that, I’ll now turn the call over to Sarah to share an update on our preclinical and research pipeline.

Sarah Kankari Mitra, President and Head of Research and Development, Elektor: Thank you, Giacomo. As you’ve heard today, we are advancing our late stage clinical programs, which have a strong scientific rationale, robust trial designs, and meaningful regulatory engagement. In parallel, we are advancing a research and preclinical pipeline that reflects Elektor’s long term vision. These programs are grounded in the same principles that define our clinical portfolio: a strong genetic and biological rationale and high translational potential and a focus on serious neurodegenerative diseases with first and best in class therapeutic approaches. A key enabler of our preclinical and research programs is our proprietary electrobrain carrier.

Delivery of sufficient drug to the brain remains a challenge for targeting neurodegenerative diseases. Our ABC platform is a versatile blood brain barrier transport technology that allows us to efficiently deliver a broad range of therapeutic modalities into the brain. These include antibodies, proteins, enzymes, and siRNA. By selectively applying the ABC platform to drug cargoes, where enhanced brain delivery can address known limitations of efficacy or safety, we believe we can expand what’s possible in the treatment of neurodegenerative diseases. Our preclinical programs include a brain penetrant anti amyloid beta antibody for Alzheimer’s disease, where a significant unmet need remains despite the approval of anti amyloid beta antibodies.

These approved antibodies have delivered plaque clearance, but only modest clinical benefit, and they are associated with side effects such as amyloid related imaging abnormalities, or ARIA, which limit their use. As a result, the field is increasingly focused on brain penetrant anti A beta antibodies that aim to increase efficacy, reduce the incidence of ARIA, enable subcutaneous delivery, and the possibility of prevention therapy. Our anti amyloid beta antibody, ADP037ABC, is designed to deliver on these goals. It combines a validated anti A beta epitope, a tailored Fc region supporting robust plaque clearance, and our proprietary Brain Delivery ABC platform. While an emerging brain penetrant anti amyloid beta antibody has shown improved brain exposure and reduced incidence of ARIA in the clinic, it has introduced anemia related to transferrin receptor engagement on erythroid precursor cells as a safety concern.

ADP037ABC also uses the transferrin receptor for transport, but it is specifically engineered to minimize anemia risk while enhancing amyloid beta clearance. With these features, we believe that ADP037ABC has the potential to be a best in class anti amyloid candidate. Another program I’d like to highlight is ADP050ABC, our engineered GK replacement therapy. Mutations in the GBA1 gene lead to reduced activity of the lysosomal enzyme glucocerebrosidase, or G case, and are associated with Gaucher disease, Parkinson’s disease, and Lewy body dementia. While enzyme replacement therapies are approved for the peripheral manifestations of Gaucher disease, these therapies do not cross the blood brain barrier, and therefore have limited impact on neurological symptoms.

With ADP050ABC, we aim to deliver an engineered, more stable, active form of GKs to the brain, potentially restoring lysosomal function in nerve cells and ultimately countering the brain pathologies associated with Gaucher disease, Parkinson’s disease, and Lewy body dementia. Beyond these two programs, we continue to develop a focused set of research stage candidates addressing neurodegeneration through the removal of toxic proteins, replacement of deficient proteins, and restoration of immune and synaptic function. These include a brain penetrant tau targeting antibody, a brain penetrant anti tau siRNA, and a rheelin moderator. With that, I’ll turn the call over to Neil to provide an update on our financials.

Neil Berkley, Chief Business Officer and Interim CFO, Elektor: Thank you, Sarah. As summarized in our second quarter twenty twenty five financial results, which we made available after the market closed today, we are in a strong position to deliver against our strategic objectives. We closed the quarter with $307,300,000 in cash, which we continue to expect will provide runway into the 2027. We have updated our 2025 financial guidance. We anticipate collaboration revenue to be between $13,000,000 and $18,000,000 our total research and development guidance to be between $130,000,000 and 140,000,000 and our total general and administrative guidance to be between $55,000,000 and $65,000,000 Our financial position enables us to stay focused on execution across our late stage clinical, preclinical and research pipeline.

We look forward to providing additional updates as we progress our work. That concludes our prepared comments for today’s call. Operator, you may now open the line for questions.

Conference Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star, 11 again. Our first question comes from the line of Tom Schrader of BTIG.

Your line is now open.

Speaker 7: Good afternoon. Thanks for taking the questions. I

Speaker 8: just wanted to clarify in the statistical analysis plan, is the only change that you’ve added progranulin or is there something else there? And just give us a sense of why you added that? Did progranulin I mean, on average, it normalized, but did it normalize does it normalize in every patient in your prior trials? I’m just trying to understand why you’re doing this. And then on the ABC portfolio, is it mostly transferrin receptor based or are you using other receptors?

Thank you.

Giacomo Salvadore, Chief Medical Officer, Elektor: Thanks for your question. This is Giacomo Salvatore, the chief medical officer. The change in our statistical analysis plan to include progranulin as co primary endpoint was reactive to specific request by the FDA, by a statistical reviewer by the FDA, who asked us to make this change to the statistical plan and recognizing the important mechanistic role of progranulin. This is the only change made following a specific comment by a statistical FDA reviewer. Regarding your question about the effect of progranulin in population of patients with FcDGRN, We have analyzed plasma programming in the Phase two study, and we showed a two to threefold increase programming after treatment with laduzinamab.

Overall, based on our Phase II data, as well as the longitudinal data from observational studies, we believe that we have more than 90%, 90% power to show statistically significant effect on programming.

Sarah Kankari Mitra, President and Head of Research and Development, Elektor: Maybe I’ll take the question on the ABC platform, Tom. So, yes, while we are exploring other transporter related transport vehicles, our lead programs that we are talking about do depend on the transferrin mediated process.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Okay, great, thank you. To add to Giacomo, we are not aware of any case where we treated patients without drug and we didn’t see elevation of progallulin. So progallulin is consistently being elevated in treated individuals, both healthy individuals and FTD mutation carriers. Okay.

Conference Operator: All right. Thank you. Our next question comes from the line of Miles Mentor of William Blair. Your line is now open.

Speaker 9: Yeah. Following on from Thomas’ first question, why did that reviewer request plasma progranulin? Like, this is an antibody, I assume. It’s largely proofly restricted with some minimal getting into the brain. I know tapping these patients in terms of CSF and measuring for a granulin is probably problematic at this stage.

But is that reviewer like are they basically agreeing that plasma for a granulin with a largely peripherally restricted antibody driving that upregulation is predictive of functional benefit in a CNS disorder like frontotemporal dementia? That’s the first one. And then if Doctor. Darby’s still on the line, I think INFront three at its bare minimal was powered to show a 25% improvement in the slowing of cognitive decline in this trial. Just on the background of what we’ve seen with the uptake of anti amyloid therapies in Alzheimer’s disease showing a twenty seven percent sign of decline.

I know there’s some safety concerns with that. But if it was twenty five percent, is that still an attractive product to prescribe to this patient population? Thank you very much.

Giacomo Salvadore, Chief Medical Officer, Elektor: Thank you very much for your question. So the FDA didn’t provide detailed rationale for their input on the analysis plan and rationale behind their suggested change and elevating programming as co primary endpoint. We believe that their FDA input underlines the importance of programming as a biologically meaningful marker in FTD GRN. Mutation in progranulin gene, in gramulin gene lead to abloid insufficiency and is a known case of the disease. Another point to underline is the fact that we had prior discussion with the FDA, and we disclosed those in previous calls, and we had an agreement that elevation of progranulin could subserve as confirmatory evidence in our labodinamab program.

So this change follow some previous discussion that we have disclosed before. Regarding your second comments on peripheral versus central, in the Phase II study, we were able to show robust increases of progranulin two to threefold, both in the CSF as well as in plasma. Therefore, our previous data indicates a strong effect no matter what the compartment is chosen to study progranulin elevation.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Yes, there is a really good correlation with our drug between the serum and the CSF, both in healthy volunteers and in patients, and in both of our drugs, both in one and one hundred one. Both of our drugs, the plasma proganulin appear to be a good representation of what actually will also happen in the CSF in the brain.

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: Hi, this is Ryan Darby. I can answer the other question. Is now the right time?

Neil Berkley, Chief Business Officer and Interim CFO, Elektor: Yes.

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: So, in terms of that clinical benefit, you know, I think a twenty five percent reduction would be something that would be meaningful in a disease where we don’t have any other therapeutic options. I think in the anti amyloid infusion comparison, you know, the issues with implementation there I think center around the side effects and that cost benefit profile that we’re discussing with patients where some patients, you know, would opt away from that. I think in FTD with no other viable treatment options, there’d be more of an interest in that. It would obviously depend on the other side effect profile and what that looked like.

Speaker 9: Beautiful. Thanks for the questions.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Yes, so far, sort of our drug appears to be very well tolerated. There are no meaningful drug related adverse effects, so it will be with regard to safety appear to be a different profile than the anti abeta therapeutics.

Conference Operator: All right, thank you. Our next question comes from the line of Alex Stratham of Bank of America. Your line is now open.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: Hey, guys. Thanks for taking our questions. One on AL001 from us as well. Curious how changing the SAP at this stage could affect powering on the modified CDR Summon Boxes since plasma of PGRN is now a co primary? And in your discussions with the FDA or and or GSK, curious if expanded enrollment in FRONT three was part of your discussions at all.

Given the FDA’s apparent focus on PGRN levels, have you gotten a sense whether plasma PGRN could make its way onto the label as well for selection? Thanks.

Giacomo Salvadore, Chief Medical Officer, Elektor: Thanks for your questions. So to start regarding our program, how the change in the SAP to include programming as co primary affects the power or affects the conduct of the study, I can tell you that with having two co primary endpoints, one clinical, the CDR, FTLD, sum of boxes and progranulin, we need to show statistically significance on both co primary endpoints for the study to be positive. Having said that, these two co primary endpoints are analyzed independently, meaning that the power regarding the unchanged. And as I said before, regarding progranulin, based on our Phase II data, we have more than 99% power to show a significant effect on elevating progranulin. The other sorry, can you repeat the other question?

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: Yeah, just given the focus of the FDA on plasma PGRN, curious if this could be, you know, a potential

Giacomo Salvadore, Chief Medical Officer, Elektor: Yeah. Yeah.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: In terms of the population on the label.

Giacomo Salvadore, Chief Medical Officer, Elektor: Yeah. We haven’t had any discussions about labeling, and we will entertain discussion with regulators after we have the trial readout in mid Q4 twenty twenty five. But we didn’t have any discussion about progranulin being part of the label.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: Understood. Thank you very much. Thank

Conference Operator: you. Our next question comes from the line of Werber of TD Securities. Your line is now open.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor1: Thank you very much for the question. This is Steven Ayanov on for your own worker. Did the FDA mention any particular threshold that they wanted to see for progranulin or is that just statistical significance? And then to follow-up, you mentioned the ninety percent power to see a 40% lowering. Was that are you tying that in any way to the progranular levels or is that just still the sum of boxes endpoint?

Thank you.

Giacomo Salvadore, Chief Medical Officer, Elektor: Sure. The FDA didn’t specify any any particular threshold regarding the elevation of progranulin that they would want to see based on our trial data. They simply provided a comment that they recommended us to include progranulin change as co primary endpoint. Then the other question was about the powering and of the study’s power for forty percent of disease progression with ladotinib versus placebo, and this power remains unchanged after the modification. As I mentioned just now, the cdxmol boxes and programmable are analyzed separately.

So the initial assumption regarding CVR remain unchanged, and we there is no change, you know, regarding the CVR some of the boxes. And programmatically, we are 99% powered based on our Phase II data. So it doesn’t we don’t think it’s going to affect the probability of success overall.

Arnon Rosenthal, Co-Founder and CEO, Elektor: But

Giacomo Salvadore, Chief Medical Officer, Elektor: considering the fact that we in order for the site to be positive, we need to show significance on both co primary endpoints.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Yeah, I’d just like to add again that even if we see twenty five percent slowdown in cognitive decline, this will be statistically significant, clinically meaningful, and will most likely be approvable.

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: Understood, thank you very much.

Conference Operator: Thank you. Our next question comes from the line of Sean Lalman of Morgan Stanley. Your line is now open.

Speaker 7: Hi. This is Mike Riyadh on for Sean. Thank you for taking our questions, and congratulations on completing enrollment for PROGRESS. We have two questions. First one for Doctor.

Darby. We’d love to hear your thoughts. Assuming success restoring progranulin to normal levels and FTG progranulin, like flowing CDRS B, would that increase your confidence in elevating progranulin above endogenous levels, like being beneficial to patients with Alzheimer’s?

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: Yeah, that’s an interesting question. You know, I think that certainly showing that you can modify the level and have a benefit, would help support that. I don’t know if it would move you all the way to saying that supranormal levels would have increased benefit, if I’m understanding that question. But certainly restoring to normal levels, you know, shows that the intervention can do that, and if it’s associated with a clinical benefit, that it can have an impact.

Speaker 7: Well, thanks. That makes sense. And then maybe just sorry, just a quick follow-up. What would be like your view on like other FTD subtypes?

Ryan Darby, Associate Professor of Neurology, Vanderbilt University Medical Center, Vanderbilt University: Yeah, I mean, I think it definitely make me curious of seeing what that effect could potentially be so that, you know, if this is protective, would going even above the normal levels be helpful I think would open up that possibility, or if there is a subset of patients with relatively lower, you know, even if it’s not to the level of progranulin carriers, would that be a good treatment target? And then you’d be able to show that there is something that is potentially able to do that.

Speaker 7: Thank you so much. That’s really helpful. And then I guess my follow-up question would be for management. For INFUN3, given the potential for interpatient variability on baseline progranulin level, be it by stage of disease or other factors, be it like semantic or motor disruptions, like how are you normalizing for that? Is it the FDA requesting a within subjects comparison from baseline to study end?

Or is it more like an aggregate comparison between study arms?

Giacomo Salvadore, Chief Medical Officer, Elektor: I can take this one. So we are finalizing the SAP in close discussion with the FDA. And they we are going to analyze plasma programming change in the active arm versus placebo. So we didn’t have any specific request. I add the fact that uploading sufficiency in the granulin gene is associated with 50% reduction of progranulin levels.

And this is enough to produce a disease phenotype, meaning that 50% decrease in programming level are almost invariably associated with frontotemporal dementia and development of the full blown disease. Our previous data showed two-three fold elevation of plasma progranulin, and also our CSF data are very consistent with that, and we were able to show normalisation of those levels in individuals who had baseline deficits. So, Arnold, I don’t know if you want to add anything, but we see consistently low levels of progranulin in patients with active GRAN. This is a functional mutation we see associated with the disease phenotype.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Yes, mechanistically the mutation that cause frontotemporal dementia are full heterozygous lot of functions. These are coding mutations that leads to complete ablation of the mutated protein. There’s no gradation in the mutated protein. So every individual that has mutations that cause frontotemporal dementia are coding mutations that lead to haplo insufficiency, like 50% or less of the probranulin. The promoter mutations are actually the three prime untranslated mutations that you refer to are a different class of mutations.

These are mutations that are associated with very modest reduction in programming of ten to fifteen percent, and they are associated with other diseases like Parkinson’s disease and Alzheimer’s disease. But they don’t lead to frontotemporal dementia.

Speaker 7: Thank you so much. That’s been really helpful. I appreciate all the color.

Conference Operator: Thank you. Our next question comes from the line of Greg Zuvanovich of Mizuho. Your line is now open.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor2: Hi there. This is Doug McPherson on for Greg. Thank you very much for having me on and taking my call. Rather. Thinking about the relative subjectivity of the endpoints of clinician severity score and the rating scales compared to biomarker data, is there anything that can be done or has been undertaken in order to try to minimize perhaps a placebo effect or to optimize for the spread or separation between active drug and placebo?

Giacomo Salvadore, Chief Medical Officer, Elektor: Thanks for the question. The powering of the study takes into account also the expected placebo change based on the natural history data and the natural course of the disease. Regarding biomarkers, they are unlikely to show any effect, any placebo effect, because those are objective measures, Nf L as well as GFAB and volumetric MRI, there no placebo effect as far as we know. Regarding, broadly speaking, the placebo effects on clinical outcome measures, what we know from the neurodegenerative diseases is that if placebo effects are present at all, they typically tend to be manifest in the first few weeks of treatment and they tend to dissipate over time. Our trials are the infantry study is ninety six weeks long in a disease that show progression over time.

So we don’t see the placebo effect as a particular risk for this kind of indication.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor2: Sure. Thank you for that. Appreciate it. And then a quick follow-up. Should we at all be concerned about ARIA for TRAEs?

And if so, what would be sort of an acceptable prevalence or severity in treated patients?

Giacomo Salvadore, Chief Medical Officer, Elektor: Yeah. You’re asking about which program in particular?

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: Oh, I’m still on the FCD phase three study.

Giacomo Salvadore, Chief Medical Officer, Elektor: So we are monitoring blind safety periodically, and there is an independent monitoring committee which oversees the safety of the drug as well, and we didn’t have reports of ARIA in the study AL-zero INFROM three.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor2: Oh, that’s great to hear. Thank you so much.

Giacomo Salvadore, Chief Medical Officer, Elektor: So, you know, maybe if I can add one quick thing, you know, typically, RA is observed in Alzheimer’s disease and trials, and it’s associated with the removal of amyloid from the brain, especially from the vasculature. So in the absence of amyloid or when it is not a prominent feature of the disease, I think the biological rationale for underlying the pathophysiology is not present. Just wanted to clarify this. So that’s why it’s not expected as a feature of this treatment, we haven’t observed it, you know,

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor0: so far.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor2: That’s great to hear. Thank you very much.

Speaker 7: I appreciate you taking the question.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor2: Sure. Thank

Conference Operator: you. Our next question comes from the line of Paul Matteis of Stifel. Your line is now open.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor3: Hi. This is Emily on for Paul. We were just wondering if there was a situation where you were able to hit on progranulin, but the clinical data was a bit more equivocal. How would you feel about your chances at approval in that situation? Thanks.

Giacomo Salvadore, Chief Medical Officer, Elektor: Sure. Thanks for the question. So the study in FRONT3 enrolled 103 subjects with symptomatic FDG RN. We collect a number of clinical measures as well as biomarkers, and we will be if the data is supportive, we will be pursuing full approval. Based on the data, and given the fact that there are no approved treatments and disease with a very huge burden, as Doctor.

Darby reminded us just earlier. We will be open to have a dialogue with the regulatory authorities and the FDA based on the observed findings, which may include changes in progranulin. But again, we are meant to pursue full approval if the data support it. And what we know from the CNS space, the FDA has recently approved drugs based on biomarker findings. If we think about the approval of tofersen in SOD1 ALS.

So there are regulatory precedents, especially in CNS diseases, which are rare and with no approved treatment options. But we are pursuing full approval if the data support it.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor3: Thanks. And then just one follow-up. Were you able in that meeting, the FDA to confirm your sample confirm alignment on the sample size again? Thank you.

Giacomo Salvadore, Chief Medical Officer, Elektor: Yeah, sure. Thanks for the question. So we aligned on the sample size with the FDA in a meeting that we had in 2023, where we performed the blinded sample size re estimation, and we observed the lower variability on the primary outcome measure, the CDR sum of boxes at TLD, as we had in mind in our original powering assumption. So we agreed with the FDA that sample size between 9,100 subjects would be sufficient to show forty percent slowing of this progression in the active arm with latusinemab versus placebo. And we got an agreement with them on the sample size, and we enrolled 103 subjects, so over slightly over the number that we think it’s needed to show a clinical effect.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor3: Thanks.

Conference Operator: Thank you. Our next question comes from the line of Pete Stavropoulos of Cantor Fitzgerald. Your line is now open.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor4: Hi, this is Samantha Schafer on the line for Pete. Thanks so much for taking our question. So, question for the team, Doctor. Salvador, Doctor. Darby related to INFront three.

We know that sixteen asymptomatic patients were enrolled who will not be included in the primary analysis. Based on their baseline Nf L levels, though, and what we know about natural history, do you expect signs of progression and potential differences between Latosi and placebo within the ninety six weeks? And then I just have a follow-up question. Thank you.

Giacomo Salvadore, Chief Medical Officer, Elektor: Sure. Thanks for the question. So as you currently said, the primary population is are patients who are symptomatic, so these 103 subjects that I just mentioned. Asymptomatic subjects, 16 of them were enrolled in the trial and will be part of sensitivity analysis. The study is ongoing and remains blinded, so I cannot comment on what we expect what we in terms of the ability to see an effect in presymptomatic subjects.

We will definitely look at the data part of the analysis and possibly entertain discussions with the regulators based on the data we observed on the results that we observed.

Arnon Rosenthal, Co-Founder and CEO, Elektor: Just to add to this, the recruitment of the presymptomatic patients, as you said, based on genetic mutations of phototemporal dementia and certain threshold level of neurofilament, a sort of published study suggested that such patients could convert to symptomatic within the two year period. But we will have to see what the actual data of the clinical trial, but that was the original expectations and the rationale for recruiting this group of pre symptomatic with high level of neurofilaments.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor4: That’s very helpful, thank you. And just a follow-up, we know that there’s a part two of the INFRANT study on open label extension. Can you give us a sense, maybe quantitatively or qualitatively, how this part of the study is progressing? Is there a high rollover rate into the OLE?

Giacomo Salvadore, Chief Medical Officer, Elektor: So we haven’t disclosed details on how many subjects rolled over into the OLE. As a company, can say that we are satisfied regarding the number of subjects who are actually opting in to the open label extension, and we think that it will provide meaningful data about the persistence of the benefit in terms of clinical endpoints and biomarkers as well as what happens in subjects who switch from placebo to active treatment moving to the open level extension. There are some very interesting and meaningful precedents in the CNS space about how this open level expansion data can provide more clarity on the meaningfulness of the results from the double blind portion of this study. We remain interested in looking at the results. But again, the statistical I mean, the analysis will be focused on part one, which is the double blind portion of the study, ninety six weeks.

So we will not, you know, we will not focus on the open level extension for now.

Katie Hogan, Senior Director of Corporate Communications and Investor Relations, Elektor4: Great. Thank you guys so much.

Conference Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Neil Berkley for closing remarks.

Neil Berkley, Chief Business Officer and Interim CFO, Elektor: Thank you. Before we end the conference call, I’d like to share that Elektra will be participating in a number of upcoming conferences, including the twenty twenty five Cantor Global Healthcare Conference on September 4 in New York, the Morgan Stanley twenty third Annual Global Healthcare Conference on September 8 in New York, and the H. C. Wainwright twenty seventh Annual Global Investment Conference on September 9 in New York. Thank you again for your time and attention.

We will now conclude today’s call.

Conference Operator: Thank you. This does conclude the program. You may now disconnect.

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