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What changed in Alector, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Alector, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+562 added−604 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Alector, Inc.'s 2025 10-K

562 paragraphs added · 604 removed · 416 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

127 edited+50 added−111 removed205 unchanged
Biggest changeAlector Brain Carrier (ABC), Our Proprietary and Versatile Blood-Brain Barrier Technology Platform The blood-brain barrier plays a critical role in maintaining homeostasis and protecting the brain by restricting the entry of potentially harmful substances. However, from a therapeutic standpoint, this protective function presents challenges for delivering therapeutics that need to cross the BBB to achieve optimal efficacy.
Biggest changeHowever, from a therapeutic standpoint, this protective function presents challenges for delivering therapeutics that need to cross the BBB to achieve optimal efficacy. To address this issue, we have developed Alector Brain Carrier, our proprietary and versatile technology platform designed to enhance brain penetration of therapeutic molecules.
The process generally involves the following: • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP; • Submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin; • Approval by an independent Institutional Review Board (IRB), or ethics committee at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (GCP) requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • Submission to the FDA of an NDA or BLA; • A determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; • Satisfactory completion of a FDA pre-approval inspection of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality, and purity; • Potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA or BLA; • FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the United States; and • Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (REMS), and the potential requirement to conduct post-approval studies.
The process generally involves the following: • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP; • Submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin; • Approval by an independent Institutional Review Board (IRB), or Ethics Committee (EC) at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (GCP) requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • Submission to the FDA of an NDA or BLA; • A determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; • Satisfactory completion of a FDA pre-approval inspection of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality, and purity; • Potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA or BLA; 18 • FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the United States; and • Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (REMS), and the potential requirement to conduct post-approval studies.
The ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price (AMP), to 23.1% of AMP and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP.
The ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price (AMP), to 23.1% of AMP and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded 28 products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP.
Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by 37 the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
This exclusivity period extends until the earlier of: one year after the first commercial marketing of the first interchangeable product; 18 months after resolution of a patent infringement against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; 42 months after approval of the first interchangeable product, if a patent infringement suit against the applicant that submitted the application for the first interchangeable product is still ongoing; or 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued.
This exclusivity period extends until the earlier 24 of: one year after the first commercial marketing of the first interchangeable product; 18 months after resolution of a patent infringement against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; 42 months after approval of the first interchangeable product, if a patent infringement suit against the applicant that submitted the application for the first interchangeable product is still ongoing; or 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued.
Regulatory Matters Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, including the Centers for Medicare and Medicaid Services, other divisions of the Department of Health and Human Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.
Regulatory Matters Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, including the Centers for Medicare and Medicaid Services, other divisions of the Department of Health and Human Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, 25 the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.
Additionally, a drug or biologic may be eligible for designation as a Breakthrough Therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints.
Additionally, a drug or biologic may be eligible for designation as a Breakthrough Therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement 22 over currently approved therapies on one or more clinically significant endpoints.
As a result, submission of an IND may not result in the FDA allowing clinical trials to commence. 29 Regulatory requirements for approval of therapies for the treatment of neurodegenerative diseases are evolving. For example, two agents, aducanumab and lecanemab, received accelerated approval from the FDA based on a surrogate endpoint, the reduction of amyloid beta plaque in the brain.
As a result, submission of an IND may not result in the FDA allowing clinical trials to commence. Regulatory requirements for approval of therapies for the treatment of neurodegenerative diseases are evolving. For example, two agents, aducanumab and lecanemab, received accelerated approval from the FDA based on a surrogate endpoint, the reduction of amyloid beta plaque in the brain.
We believe that building a fully integrated research, development, and ultimately commercial company will enable us to develop therapies more rapidly and efficiently for patients and realize the full potential of our approach and discovery capabilities. • Applying our proprietary capabilities to rapidly advance our product candidates through clinical proof-of-concept studies and beyond.
We believe that building a fully integrated research, development, and ultimately commercial company will enable us to develop therapies more rapidly and efficiently for patients and realize the full potential of our approach and discovery capabilities. • Applying our proprietary capabilities and clinical development expertise to rapidly advance our product candidates through clinical proof-of-concept studies and beyond.
Clinical trials in the United States generally are conducted in three sequential phases, known as Phase 1, Phase 2, and Phase 3, and may overlap. • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
Clinical trials in the United States generally are conducted in three sequential phases, known as Phase 1, Phase 2, and Phase 3, and may overlap. 19 • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
For example, a reference product designated for a rare disease or condition (an orphan drug) may be entitled to seven years of exclusivity, in which case no product that is biosimilar to the reference product may be approved until either the end of the twelve-year period provided under the biosimilarity statute or the end of the seven-year orphan drug exclusivity period, whichever occurs later.
For example, a reference product designated for a rare disease or condition (an orphan drug) may be entitled to seven years of exclusivity, in which case no product that is biosimilar to the reference product may be approved until either the end of the twelve-year period provided under the biosimilar statute or the end of the seven-year orphan drug exclusivity period, whichever occurs later.
We funded Adimab’s research in connection with our collaboration, in accordance with the terms and limitations described in the 2014 Adimab Agreement. We also have potential milestone payments per program for use of antibodies and low- to mid-single digit royalty payments for commercial sales of products 25 incorporating such antibodies.
We funded Adimab’s research in connection with our collaboration, in accordance with the terms and limitations described in the 2014 Adimab Agreement. We also have potential milestone payments per program for use of antibodies and low- to mid-single digit royalty payments for commercial sales of products incorporating such antibodies.
A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product 27 approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it, may be extended.
A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it, may be extended.
Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the 21 FDA. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
We make this information available on or through our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. 42 We use Alector, the Alector logo, and other marks as trademarks in the United States and other countries.
We make this information available on or through our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. We use Alector, the Alector logo, and other marks as trademarks in the United States and other countries.
Any agency or judicial enforcement action could have a material adverse effect on us. 28 Any future product candidates must be approved by the FDA through either a BLA or NDA process before they may be legally marketed in the United States.
Any agency or judicial enforcement action could have a material adverse effect on us. Any future product candidates must be approved by the FDA through either a BLA or NDA process before they may be legally marketed in the United States.
The Food and Drug Omnibus Reform Act (FDORA) reformed the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on 33 an expedited basis for non-compliance with post-approval requirements.
The Food and Drug Omnibus Reform Act (FDORA) reformed the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.
If the Member States Concerned raise no objections, based on a potential serious risk to public health, to the assessment, SPC, labeling or packaging proposed by the 38 RMS, the product is subsequently granted a national MA in all the Member States (i.e., in the RMS and the Member States Concerned).
If the Member States Concerned raise no objections, based on a potential serious risk to public health, to the assessment, SPC, labeling or packaging proposed by the RMS, the product is subsequently granted a national MA in all the Member States (i.e., in the RMS and the Member States Concerned).
In such case, we will no longer conduct development or commercialization of that product, the 24 Company will receive tiered royalties on net sales in the United States instead of a share of profits or losses, and certain milestones will be reduced. Governance.
In such case, we will no longer conduct development or commercialization of that product, the Company will receive tiered royalties on net sales in the United States instead of a share of profits or losses, and certain milestones will be reduced. Governance.
To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of FDA. FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the United States.
To support marketing approval, the data submitted must be sufficient in 20 quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of FDA. FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the United States.
There are two types of marketing authorizations. • The Community MA is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use (CHMP), of the EMA, and is valid throughout the entire territory of the EEA.
There are two types of marketing authorizations. 27 • The Community MA is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use (CHMP), of the EMA, and is valid throughout the entire territory of the EEA.
For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate 39 in the 340B drug pricing program.
For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program.
Until GSK has fully assumed such responsibility, and for our other product candidates, we rely, and expect to continue to rely, on third-party contract development and manufacturing organizations (CDMOs) for the production of our product candidates during their preclinical and clinical development.
Until GSK has fully assumed such responsibility, and for our other product candidates, we rely, and expect to continue to rely, on third-party contract development and manufacturing organizations (CDMOs) for the production of our 15 product candidates during their preclinical and clinical development.
Any of 35 these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.
Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.
Additionally, GSK or we can terminate the GSK Agreement in connection with a material breach of the GSK Agreement by the other party that remains uncured for a specified period of time. Adimab Collaboration Agreements Overview – 2014 Adimab Collaboration Agreement (2014 Adimab Agreement) In 2014, we entered into the 2014 Adimab Collaboration Agreement (the 2014 Adimab Agreement).
Additionally, GSK or we can terminate the GSK Agreement in connection with a material breach of the GSK Agreement by the other party that remains uncured for a specified period of time. 14 Adimab Collaboration Agreements Overview – 2014 Adimab Collaboration Agreement (2014 Adimab Agreement) In 2014, we entered into the 2014 Adimab Collaboration Agreement (the 2014 Adimab Agreement).
Intellectual Property Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to enforce 26 our proprietary rights against infringers.
Intellectual Property Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to enforce our proprietary rights against infringers.
For example, the European Union provides options for its member states to restrict the range of medicinal 40 products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
Conversely, increased PGRN levels have been demonstrated to be protective for these diseases in animal models. Given the strong link between GRN LOF mutations and neurodegeneration, elevating PGRN levels may provide a potential therapeutic approach that offers broad neuroprotection in both AD and PD.
Conversely, increased PGRN levels have been demonstrated to be protective for those diseases in animal models. Given the strong link between GRN LOF mutations and neurodegeneration, elevating PGRN levels may provide a potential therapeutic approach that offers broad neuroprotection in both AD and PD.
We are able to identify and employ molecular biomarkers, assays, and imaging techniques that are tailored to our product candidates to confirm target engagement and quantify their impact, allowing us to potentially interpret the clinical impact of our compounds earlier than would be expected using traditional clinical measures. • Patient Selection .
We identify and employ molecular biomarkers, assays, and imaging techniques that are tailored to our product candidates to confirm target engagement and quantify their impact, allowing us to potentially interpret the clinical impact of our product candidates earlier than would be expected using traditional clinical measures. • Patient Selection .
Our platform employs several types of binding domains, including Fab, a fragment of an antibody that binds to its target, and single-chain variable fragments (scFvs), engineered antibody fragments that link the variable regions of an antibody into a single chain, making them smaller and more adaptable for diverse therapeutic applications.
Our platform employs several types of binding domains, including Fab, a fragment of an antibody that binds to its target, and single-chain variable fragments (scFvs), which are engineered antibody fragments that link the variable regions of an antibody into a single chain, making them smaller and more adaptable for diverse therapeutic applications.
We combine our bioinformatic approaches with in-house functional genomics to discover and validate genetic mutations and targets of interest.
We combine our bioinformatic approaches with in-house functional genomics to validate genetic mutations and targets of interest.
Under the current regime, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies: the National Competent Authority (NCA), and one or more Ethics Committees (ECs).
Under the current regime, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies: the National Competent Authority (NCA), and one or more ECs.
In 2022, we presented results from our randomized, double-blind, placebo-controlled Phase 1 clinical trial testing the safety, tolerability, pharmacokinetics, pharmacodynamics, and bioavailability of single and multiple doses of intravenously (IV) or subcutaneously (SC) administered AL101/GSK457226 in 88 healthy volunteers. AL101/GSK457226 was found to be generally well tolerated at all doses administered.
In 2022, we presented results from our randomized, double-blind, placebo-controlled Phase 1 clinical trial testing the safety, tolerability, pharmacokinetics, pharmacodynamics, and bioavailability of single and multiple doses of intravenously (IV) or subcutaneously (SC) administered nivisnebart in 88 healthy volunteers. Nivisnebart was found to be generally well tolerated at all doses administered.
Multiple IV doses of AL101 at 30 mg/kg increased and maintained the levels of PGRN at approximately 160% to 200% (2.6- to 3-fold) above baseline in plasma and approximately 80% (1.8-fold) above baseline in the CSF.
Multiple IV doses of nivisnebart at 30 mg/kg increased and maintained the levels of PGRN at approximately 160% to 200% (2.6- to 3-fold) above baseline in plasma and approximately 80% (1.8-fold) above baseline in the CSF.
An application for licensure of a biosimilar product must include information demonstrating biosimilarity based upon the following, unless the FDA determines otherwise: • analytical studies demonstrating that the proposed biosimilar product is highly similar to the approved product notwithstanding minor differences in clinically inactive components; • animal studies (including the assessment of toxicity); and • a clinical trial or trials (including the assessment of immunogenicity and pharmacokinetic or pharmacodynamic) sufficient to demonstrate safety, purity, and potency in one or more conditions for which the reference product is licensed and intended to be used. • In addition, an application must include information demonstrating that: o the proposed biosimilar product and reference product utilize the same mechanism of action for the condition(s) of use prescribed, recommended or suggested in the proposed labeling, but only to the extent the mechanism(s) of action are known for the reference product; o the condition or conditions of use prescribed, recommended or suggested in the labeling for the proposed biosimilar product have been previously approved for the reference product; o the route of administration, the dosage form and the strength of the proposed biosimilar product are the same as those for the reference product; and o the facility in which the biological product is manufactured, processed, packed or held meets standards designed to assure that the biological product continues to be safe, pure, and potent.
An application for licensure of a biosimilar product must include information demonstrating biosimilarity based upon the following, unless the FDA determines otherwise: • analytical studies demonstrating that the proposed biosimilar product is highly similar to the approved product notwithstanding minor differences in clinically inactive components; • animal studies (including the assessment of toxicity); and • a clinical trial or trials (including the assessment of immunogenicity and pharmacokinetic or pharmacodynamic) sufficient to demonstrate safety, purity, and potency in one or more conditions for which the reference product is licensed and intended to be used. • In addition, an application must include information demonstrating that: o the proposed biosimilar product and reference product utilize the same mechanism of action for the condition(s) of use prescribed, recommended or suggested in the proposed labeling, but only to the extent the mechanism(s) of action are known for the reference product; o the condition or conditions of use prescribed, recommended or suggested in the labeling for the proposed biosimilar product have been previously approved for the reference product; o the route of administration, the dosage form and the strength of the proposed biosimilar product are the same as those for the reference product; and o the facility in which the biological product is manufactured, processed, packed or held meets standards designed to assure that the biological product continues to be safe, pure, and potent. 23 Biosimilarity means that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components; and that there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.
Three volunteers received MD IV placebo. MD administration of AL101 increased plasma and CSF PGRN levels, with a higher elevation observed in the AL101 30 mg/kg MD IV group than in the AL101 300 mg MD SC group.
Three volunteers received MD IV placebo. MD administration of nivisnebart increased plasma and CSF PGRN levels, with a higher elevation observed in the nivisnebart 30 mg/kg MD IV group than in the nivisnebart 300 mg MD SC group.
Using our drug discovery capabilities to identify targets that are validated by human genetics, disease biomarkers, and responsive patient populations, we believe that we are positioned for greater probability of technical success on more efficient timelines relative to historical drug development in neurodegeneration. 6 Our Pipeline Programs Figure 1.
Using our drug discovery capabilities to identify targets that are validated by human genetics, disease biomarkers, and suitable patient populations, we believe that we are positioned for greater probability of technical success on more efficient timelines relative to historical drug development in neurodegeneration. Our Pipeline Programs Figure 1.
Additionally, AL101/GSK457226 was measurable in the CSF following single and multiple IV and SC doses. In the two multiple-dose (MD) cohorts, 27 healthy volunteers received either AL101/GSK457226 30 mg/kg IV every four weeks (q4w) for a total of four doses [n=11] or AL101/GSK457226 300 mg SC every two weeks (q2w) for a total of seven doses [n=13].
Additionally, nivisnebart was measurable in the CSF following single and multiple IV and SC doses. In the two multiple-dose (MD) cohorts, 27 healthy volunteers received either nivisnebart 30 mg/kg IV every four weeks (q4w) for a total of four doses [n=11] or nivisnebart 300 mg SC every two weeks (q2w) for a total of seven doses [n=13].
These results highlight the critical role of both TfR and cargo binding: the TfR arm is essential for driving brain uptake, and the final biodistribution is influenced by both components of the molecule. 19 Figure 19. TfR-ABC Drives Widespread Biodistribution in Mouse Brain. In the hippocampus, the Target3 antibody shows minimal penetration without ABC technology.
These results highlight the critical role of both TfR and cargo binding: the TfR arm is essential for driving brain uptake, and the final biodistribution is influenced by both components of the molecule. 11 Figure 8. TfR-ABC Drives Widespread Biodistribution in Mouse Brain. In the hippocampus, the Target3 antibody shows minimal penetration without ABC technology.
In certain circumstances, a regulatory exclusivity period can extend beyond the life of a patent, and thus block biosimilarity applications from being approved on or after the patent expiration date.
In certain circumstances, a regulatory exclusivity period can extend beyond the life of a patent, and thus block biosimilar applications from being approved on or after the patent expiration date.
According to the FDA’s FY 2025 fee schedule for prescription drug user fees, which became effective on October 1, 2024, and will remain in effect through September 30, 2025, the user fee for an application requiring clinical data, such as an NDA or BLA, is approximately $4.3 million.
According to the FDA’s FY 2026 fee schedule for prescription drug user fees, which became effective on October 1, 2025, and will remain in effect through September 30, 2026, the user fee for an application requiring clinical data, such as an NDA or BLA, is approximately $4.68 million.
Some of the pharmaceutical and biotechnology companies that are currently pursuing the development of products for the treatment of the neurodegenerative disease indications for which we have research programs, including FTD, Alzheimer’s disease, and Parkinson’s disease, include large companies with significant financial resources, such as Biogen, Eli Lilly, Merck, Roche Holding AG, and Eisai.
Some of the pharmaceutical and biotechnology companies that are currently pursuing the development of products for the treatment of the neurodegenerative disease indications for which we have research programs, including Alzheimer’s disease, and Parkinson’s disease, include large companies with significant financial 17 resources, such as Biogen, Eli Lilly, Merck, Roche, and Eisai.
We therefore encourage our investors and others interested in our company to review the information that we make available on our website. 43
We therefore encourage our investors and others interested in our company to review the information that we make available on our website. 32
In May 2023, we and GSK amended the GSK Agreement to provide that we are responsible for funding up to $140.5 million for the conduct of the initial Phase 2 trial for AL101 in Alzheimer’s disease.
Subsequently, in May 2023, we and GSK amended the GSK Agreement to provide that we are responsible for funding up to $140.5 million for the conduct of the initial Phase 2 trial for nivisnebart in Alzheimer’s disease.
Our latozinemab and AL101 product candidates were discovered and optimized, and our AL002 product candidate was optimized, under the 2014 Adimab Agreement.
Our latozinemab and nivisnebart product candidates were discovered and optimized, and our AL002 product candidate was optimized, under the 2014 Adimab Agreement.
We have a formal process and policy for the submission and treatment of complaints. 41 Employee Compensation and Benefits The principal purpose of our compensation program is to attract, retain, and reward employees who share our vision and are deeply connected to our mission.
We have a formal process and policy for the submission and treatment of complaints. Employee Compensation and Benefits Our compensation program is designed to attract, retain, and reward employees who share our vision and are deeply connected to our mission.
PDUFA also imposes an annual program fee for each marketed human drug or biologic ($403,889 in 2025) and an annual establishment fee on facilities used to manufacture prescription drugs and biologics. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.
PDUFA also imposes an annual program fee for each marketed human drug or biologic ($442,213 in 2026) and an annual establishment fee on facilities used to manufacture prescription drugs and biologics. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.
We believe that our future success depends, in part, on our ability to continue to identify, recruit, retain, incentivize, and integrate our employees, advisors, and consultants. Employee Profile As of December 31, 2024, we had 238 full-time employees, 76% of whom were engaged in research and development activities.
We believe that our future success depends, in part, on our ability to continue to identify, recruit, retain, incentivize, and integrate our employees, advisors, and consultants. Employee Profile As of December 31, 2025, we had 103 full-time employees, 70% of whom were engaged in research and development activities.
AL101/GSK457226 is currently being studied in PROGRESS-AD, a randomized, double-blind, placebo-controlled Phase 2 clinical trial of AL101 enrolling approximately 282 patients with early Alzheimer’s disease at multiple sites globally. The 76-week study is designed to assess the safety and efficacy of two dose levels of AL101 15 compared to placebo.
Nivisnebart is currently being studied in PROGRESS-AD, a randomized, double-blind, placebo-controlled Phase 2 clinical trial, having enrolled approximately 282 patients with early Alzheimer’s disease at multiple sites globally. The 76-week study is designed to assess the safety and efficacy of two dose levels of nivisnebart compared to placebo.
This appellate court decision created uncertainty in the application of orphan drug exclusivity. In January 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the applicable court ruling, it intends to continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved.
In January 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the applicable court ruling, it intends to continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved.
We leverage in vitro and in vivo functional tools to validate the activity of our product candidates and their ability to cross the blood brain barrier in sufficient quantity to be therapeutically effective, with select candidates enhanced for deeper brain penetration by our ABC technology platform. • Biomarker Selection .
We leverage in vitro and in vivo functional tools to validate the activity of our product candidates and their ability to cross the blood-brain barrier in sufficient quantity to be therapeutically effective, with our candidates being enhanced for deeper brain penetration through our ABC technology platform.
None of our employees are represented by a labor union or party to a collective bargaining agreement. Diversity and Inclusion Our employees represent a broad range of backgrounds and bring a wide array of perspectives and experiences to the company.
None of our employees are represented by a labor union or party to a collective bargaining agreement. Fair Employment Practices Our employees represent a broad range of backgrounds and bring a wide array of perspectives and experiences to the company.
ABC utilizes receptor-mediated transport, a process in which therapeutic molecules are transported across the BBB by binding to specific receptors on the endothelial cells. This approach enhances the delivery of therapeutics to the brain, aiming to achieve deeper brain penetration and optimize therapeutic efficacy.
ABC utilizes receptor-mediated transport, a process in which therapeutic molecules are transported across the BBB by binding to specific receptors on endothelial cells and using these receptors as a “Trojan Horse” to enter the brain. This approach enhances the delivery of therapeutics to the brain, aiming to achieve deeper and homogeneous brain penetration and optimize therapeutic efficacy.
Our patent portfolio is intended to cover our product candidates and related components, their methods of use and processes for their manufacture, our proprietary reagents, assays and platforms, and any other inventions that are commercially important to our business.
Our patent portfolio is intended to cover our product candidates, their methods of use and processes for their manufacture, our proprietary methodologies and platforms, and any other inventions that are commercially important to our business.
In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA. 30 Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the drug or biologic, findings from animal or in vitro testing that suggest a significant risk for human volunteers and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the drug or biologic, findings from animal or in vitro testing that suggest a significant risk for human volunteers and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
ADP037-ABC ADP037-ABC is our proprietary anti-amyloid beta (Aβ) antibody paired with our proprietary ABC for the treatment of AD. It is designed to remove brain Aβ plaques, with the potential to reduce the incidence and/or severity of amyloid-related imaging abnormalities (ARIA) and enable subcutaneous delivery.
AL137 Program AL137 is our proprietary anti-amyloid beta (Aβ) antibody paired with our proprietary ABC in preclinical development for the potential treatment of AD. It is designed to remove brain Aβ plaques, with the potential for minimal treatment related incidence and/or severity of amyloid-related imaging abnormalities (ARIA) and the potential to enable subcutaneous delivery.
Versatility The versatility of the ABC platform is driven by its use of engineered antibody fragments that target specific receptors on the BBB to enhance therapeutic delivery.
Versatility The versatility of the ABC platform is driven by its use of engineered antibody fragments that target the TfR at the BBB to enhance therapeutic delivery.
Participants are randomized to one of three treatment groups, receiving AL101 or placebo intravenously. The primary endpoint of the study is disease progression as measured by the Clinical Dementia Rating Sum of Boxes (CDR ® -SB). The trial also employs other clinical and functional outcome assessments.
Participants are randomized to one of three treatment groups, receiving nivisnebart or placebo intravenously. The primary endpoint of the study is disease progression as measured by the Clinical Dementia Rating Sum of Boxes (CDR ® -SB). The trial also employs other clinical and functional outcome assessments. In April 2025, enrollment was completed in PROGRESS-AD.
These binding domains may be linked to various therapeutic cargo types, including antibodies, proteins, enzymes, and nucleic acids, in multi-specific formats designed for efficient transport. Importantly, these formats preserve key antibody properties, such as extended half-life, achieved through recycling at the neonatal Fc receptor (FcRn). This receptor extends the duration of therapeutic molecules in circulation by preventing rapid clearance.
These binding domains may be linked to various therapeutic cargo types, including antibodies, proteins, enzymes, and nucleic acids, in multi-specific formats designed for efficient transport across the BBB. Importantly, these formats preserve key antibody properties, such as extended half-life achieved through recycling at the neonatal Fc receptor (FcRn).
Alector and GSK are co-developing AL101/GSK4527226 for the potential treatment of early Alzheimer’s disease (AD), and it may also be evaluated for other indications, including Parkinson’s disease (PD). LOF mutations in the GRN gene, which moderately reduce PGRN levels, have been shown to increase the risk of developing AD and PD.
We and GSK are co-developing nivisnebart for the potential treatment of early AD, and it may also be evaluated for other indications, including PD. Loss of function (LOF) mutations in the GRN gene, which moderately reduce PGRN levels, have been shown to increase the risk of developing AD and PD.
In May 2023, we and GSK amended the GSK Agreement (the GSK Amendment). Under the terms of the GSK Amendment, we are responsible for funding GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 trial of AL101 in early AD.
Under the current terms of the GSK Agreement, we are responsible for funding and sharing GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 trial of nivisnebart in early AD.
The key tenets of our business strategy to achieve this goal include: • Building a leading, fully-integrated company focused on delivering innovative therapies, validated by human genetics, for the treatment of neurodegeneration.
The key tenets of our business strategy to achieve this goal include: • Building a leading, fully-integrated company focused on delivering innovative therapies, validated by human genetics, and propelled by our expertise in neuroscience, protein engineering and drug development for the treatment of neurodegeneration.
GSK will also conduct the initial Phase 2 trial for AL101 in Alzheimer’s disease. Development costs will be shared 60% by GSK and 40% by us, except that the parties will share manufacturing development costs equally, and we will solely bear the development costs of the initial Phase 2 clinical trials under the development plan.
We agreed that development costs will be shared 60% by GSK and 40% by us, except that the parties will share manufacturing development costs equally, and we will solely bear the development costs of the initial Phase 2 clinical trials under the development plan.
We utilize state of the art techniques such as CRISPR Activation and Inhibition, single cell transcriptomics, proteomics, metabolomics, microscopic and biochemical readouts in relevant in vitro systems such as hiPSC microglia and in vivo systems such as mouse/rat models to elucidate the immune dysfunction caused by these mutations.
We utilize state of the art techniques such as hiPSC microglia and neurons and organoids carrying disease risk mutations, CRISPR Activation and Inhibition, single cell transcriptomics, proteomics, metabolomics, microscopic and biochemical readouts in relevant in vitro systems such as hiPSC microglia and neurons, and in vivo systems such as rodent models that carry relevant genetic mutations to elucidate the dysfunction caused by these mutations.
The above table highlights our clinical, preclinical, and research programs, Alector Brain Carrier blood-brain barrier technology platform, and IP portfolio. Latozinemab and AL101 are our current clinical programs. In addition, we continue to pursue a number of preclinical and research programs in our pipeline for indications including Alzheimer’s disease, Parkinson’s disease, and Lewy body dementia.
The above table highlights our clinical, preclinical, and research programs, including our Alector Brain Carrier (ABC) blood-brain barrier technology platform. 6 Nivisnebart is currently in clinical development. In addition, we continue to pursue a number of preclinical and research programs in our pipeline for indications including Alzheimer’s disease, Parkinson’s disease, and Lewy body dementia.
In the United States, the parties will be jointly responsible for commercialization of latozinemab and AL101, with us leading the commercialization for orphan indications and GSK leading the commercialization for Alzheimer’s disease and Parkinson’s disease and other non-orphan indications. Outside of the United States, GSK will be solely responsible for commercialization of latozinemab and AL101 for all indications.
In the United States, the parties agreed to be jointly responsible for commercialization of latozinemab and nivisnebart, with us leading the commercialization for orphan indications and GSK leading the commercialization for Alzheimer’s disease and Parkinson’s disease and other non-orphan indications.
Latozinemab has been granted orphan drug designation by FDA for treatment of FTD, and AL101 also had orphan drug designation until we withdrew the IND for FTD and decided to pursue larger indications, such as Alzheimer's disease and Parkinson’s disease, for that product candidate.
Prior to stopping the INFRONT-3 open label and continuation studies, latozinemab had been granted orphan drug designation by FDA for treatment of FTD. Nivisnebart also had orphan drug designation until we withdrew the IND for FTD and decided to pursue larger indications, such as Alzheimer's disease and Parkinson’s disease, for that product candidate.
In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.
In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA. 26 Market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.
If one of our products designated as an orphan drug receives marketing approval for an indication for which it has not been granted orphan drug designation, it will not have orphan drug exclusivity in that non-orphan indication.
If one of our products designated as an orphan drug receives marketing approval for an indication for which it has not been granted orphan drug designation, it will not have orphan drug exclusivity in that non-orphan indication. Orphan drug status in the European Union has similar, but not identical, requirements and benefits.
The workforce has subsequently been reduced as we have initiated the reduction-in-force of approximately 17% that was announced in November 2024. The majority of our employees work out of our headquarters location in South San Francisco; and the remainder of our team members work remotely.
The workforce has subsequently been reduced in connection with the reduction-in-force (of approximately 47% of our employees) that was announced and initiated in October 2025. The majority of our employees work out of our headquarters location in South San Francisco; and the remainder of our team members work remotely.
We are focused on maximizing the probability of success of our product candidates by leveraging an understanding of genetics and neuronal, immune, and lysosomal pathways, as well as our state-of-the-art bioinformatics, to enable better and earlier target selection.
We are focused on maximizing the probability of success of our product candidates by leveraging an understanding of genetics and neuronal, immune, and lysosomal pathways, as well as our state-of-the-art bioinformatics, to enable better and earlier target selection. We apply our capabilities in antibody and protein engineering combined with our blood-brain barrier technology, ABC, to optimize our product candidates.
We leverage our advanced antibody engineering capabilities to design and optimize biotherapeutics. We employ gene expression profiling, proteomics, brain imaging, and data on disease pathology as well as our own preclinical and clinical data to continually refine our proprietary algorithms and methodologies.
We employ gene expression profiling, proteomics, brain imaging, and data on disease pathology as well as our own preclinical and clinical data to continually refine our methodologies.
Market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of a NDA for a new chemical entity.
The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.
SORT1 binds to extracellular PGRN in the plasma and brain and transports it into cells for degradation by the lysosome resulting in decreasing levels of extracellular PGRN. SORT1 deficiency increases PGRN plasma and brain levels by two to three-fold in mouse models, while variants that modestly reduce expression of SORT1 increase the level of PGRN in humans.
SORT1 deficiency increases PGRN plasma and brain levels by two- 7 to three-fold in mouse models, while variants that modestly reduce expression of SORT1 increase the level of PGRN in humans.
These studies and others have indicated to us that blocking SORT1 with a pharmacological agent could be a safe and effective approach in increasing the level of functional PGRN in the brain. We have developed two distinct product candidates that target SORT1, latozinemab and AL101/ GSK4527226, designed to increase PGRN levels in the brain.
These studies and others have indicated to us that blocking SORT1 with a pharmacological agent could be a safe and effective approach to increase the level of functional PGRN in the brain.
The impact of these judicial challenges as well as future legislative, executive, and administrative actions under the new presidential administration, including significant leadership changes at HHS, CMS and FDA, and new agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.
The impact of future legislative, executive, and administrative actions under the current presidential administration and new agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.
Orphan drug status in the European Union has similar, but not identical, requirements and benefits. 32 In litigation in 2021, a court disagreed with the FDA’s longstanding position that orphan drug exclusivity only applies to the approved use or indication within an eligible disease, and not to all uses or indications within the entire designated disease or condition.
In litigation in 2021, a court disagreed with the FDA’s longstanding position that orphan drug exclusivity only applies to the approved use or indication within an eligible disease, and not to all uses or indications within the entire designated disease or condition. This appellate court decision created uncertainty in the application of orphan drug exclusivity.
The first patent family is expected to expire in 2043, the second patent family, assuming that the necessary non-provisional patent applications are timely filed and all other applicable requirements are satisfied for the U.S. provisional patent applications, is expected to expire in 2045, the third patent family is expected to expire in 2043, and the fourth patent family is expected to expire in 2045, in all cases excluding any patent term adjustments and any patent term extensions.
Tau siRNA Program We own one patent family directed to our ABC-enabled tau siRNA program. That patent family, assuming that the necessary non-provisional patent applications are timely filed and all other applicable requirements are satisfied for U.S. provisional patent applications, is expected to expire in 2046, in all cases excluding any patent term adjustments and any patent term extensions.
We may opt out of the sharing of development costs and of profit and losses from commercialization in the United States on a product-by-product basis.
Outside of the United States, we agreed that GSK is solely responsible for commercialization of latozinemab and nivisnebart for all indications. We may opt out of the sharing of development costs and of profit and losses from commercialization in the United States on a product-by-product basis.
In August 2024, CMS released the first set of negotiated prices for ten drugs under the Medicare Drug Price Negotiation Program for 2026. Various industry stakeholders, including pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional.
Various industry stakeholders, including pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail to successfully identify and develop additional product candidates from our research and drug discovery platform, our commercial opportunity may be limited. • We may not be successful in our efforts to carry out our obligations under our collaborations for our product development and research programs; for instance, without limitation, we may not complete in a timely manner or at all our contractual obligations to GSK. • We may not be successful in our efforts to obtain approval for additional or expanded indications for any product candidates that receive approval for a given indication. • We have concentrated a substantial portion of our research and development efforts on the treatment of neurodegenerative diseases, a field that has seen both limited success in drug development and evolving standards for regulatory approval. 44 • We may not accurately predict the time and cost of development and subsequent regulatory approval for our product candidates, which are based on innovative approaches and technologies to address the complex mechanisms underlying neurodegeneration. • We may not be successful in developing product candidates that effectively compete with therapeutics that are developed or commercialized by our competitors, including therapeutics that affect the same biological targets or pathways. • We may encounter substantial delays in our clinical trials or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all. • Our clinical trials may reveal significant adverse events, toxicities, or other side effects and may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, which would prevent, delay, or limit the scope of regulatory approval and commercialization. • Our operations and financial results could be adversely impacted by the effects of worldwide economic conditions, including macroeconomic downturns stemming from increased inflation, supply chain and other economic impacts of pandemics or other public health outbreaks and geopolitical events and conflicts. • We are highly dependent on our key personnel, and if we are not successful in attracting, motivating, and retaining highly qualified personnel, including as a result of layoffs and furloughs, pausing of recruiting efforts, or regrettable employee attrition, we may not be able to successfully implement our business strategy. • The market price of our common stock has been, and may continue to be, volatile, which could result in substantial losses for investors and could negatively impact our ability to conduct additional fundraising in the public markets. • Our existing cash, cash equivalents, and marketable securities may not be sufficient to fund our future operating expenses and capital expenditure requirements. • Our existing or future indebtedness and any associated debt covenants on our business and growth prospects.
Biggest changeIf any such collaborations are not successful, we may not be able to realize the market potential of those product candidates. • We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing. • We may not be successful in our efforts to carry out our obligations under our collaborations for our product development and research programs; for instance, without limitation, we may not complete in a timely manner or at all our contractual obligations to GSK. • Our operations, financial results, and the market price of our common stock could be adversely impacted by the effects of worldwide economic conditions, including macroeconomic downturns, global recessions, increased inflation, supply chain disruptions, trade tariffs or other disruptions in global trade, pandemics or other public health outbreaks, and geopolitical events and conflicts. • We are highly dependent on our key personnel, and if we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. • Our existing or future indebtedness and any associated debt covenants may impact our business and growth prospects. • Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates.
If we do not have sufficient funds, we may not be able to further develop product candidates or bring them to market and generate product revenue.
If we do not have sufficient funds, we may not be able to further develop product candidates or bring them to market and generate revenue.
As a result, our intellectual property may not provide us with rights to exclude others for sufficient period of time from commercializing products similar or identical to ours. Some of our patents and patent applications may be co-owned with third parties.
As a result, our intellectual property may not provide us with rights to exclude others for a sufficient period of time from commercializing products similar or identical to ours. Some of our patents and patent applications may be co-owned with third parties.
Market conditions and changing circumstances, some of which may be beyond our control, could impair our ability to access our existing cash, cash equivalents and investments and to timely pay key vendors and others.
Market conditions and changing circumstances, some of which may be beyond our control, could impair our ability to access our existing cash, cash equivalents and investments and to timely pay key vendors and others.
Some of the factors that may cause the market price of our common stock to fluctuate or decline include: • the success of existing or new competitive products or technologies; • the timing and results of clinical trials for our current product candidates and any future product candidates that we may develop; • commencement or termination of collaborations for our product development and research programs; • failure to achieve development, regulatory, or commercialization milestones under our collaborations; • failure or discontinuation of any of our product development and research programs; • results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders, such as if we use our at-the-market facility; • expiration of market standoff or lock-up agreements; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, political, industry, and market conditions, including a rising rate of inflation or a period of economic recession; and • the other factors described in this “Risk Factors” section.
Some of the factors that may cause the market price of our common stock to fluctuate or decline include: • the success of existing or new competitive products or technologies; • the timing and results of clinical trials for our current product candidates and any future product candidates that we may develop; • commencement or termination of collaborations for our product development and research programs; • failure to achieve development, regulatory, or commercialization milestones under our collaborations; • failure or discontinuation of any of our product development and research programs; 86 • results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders, such as if we use our at-the-market facility; • expiration of market standoff or lock-up agreements; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, political, industry, and market conditions, including a rising rate of inflation or a period of economic recession; and • the other factors described in this “Risk Factors” section.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: 64 • regulatory authorities may withdraw approvals of such product and cause us to recall our products; • regulatory authorities may require additional warnings on the label; • we may be required to change the way the product is administered, monitor patients over the course of treatment, or conduct additional clinical trials or post-approval studies; • we may be required to create a Risk Evaluation and Mitigation Strategy plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, pre-prescription screening or ongoing monitoring for adverse events (such as ARIA-like events), and/or other elements, such as boxed warning on the packaging (for example, as required for lecanemab), to assure safe use; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may withdraw approvals of such product and cause us to recall our products; • regulatory authorities may require additional warnings on the label; • we may be required to change the way the product is administered, monitor patients over the course of treatment, or conduct additional clinical trials or post-approval studies; • we may be required to create a Risk Evaluation and Mitigation Strategy plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, pre-prescription screening or ongoing monitoring for adverse events (such as ARIA-like events), and/or other elements, such as boxed warning on the packaging (for example, as required for lecanemab), to assure safe use; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
The degree of market acceptance of any product candidate we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety as demonstrated in clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; • sufficient third-party coverage or reimbursement; 59 • the ability to offer appropriate patient access programs, such as co-pay assistance; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA, EMA, or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA, or other comparable foreign regulatory authorities, including any limitations, contraindications, or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidate we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety as demonstrated in clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; • sufficient third-party coverage or reimbursement; • the ability to offer appropriate patient access programs, such as co-pay assistance; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA, EMA, or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA, or other comparable foreign regulatory authorities, including any limitations, contraindications, or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and • the prevalence and severity of any side effects.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. • The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and their respective implementing regulations, impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security, and transmission of individually identifiable health information without appropriate authorization. • The federal Physician Payment Sunshine Act, created under the ACA, and its implementing regulations, require applicable manufacturers of drugs, devices, biologicals, and medical supplies for 71 which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the U.S.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. • The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and their respective implementing regulations, impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security, and transmission of individually identifiable health information without appropriate authorization. • The federal Physician Payment Sunshine Act, created under the ACA, and its implementing regulations, require applicable manufacturers of drugs, devices, biologicals, and medical supplies for 61 which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the U.S.
Applications for our product candidates could fail to receive regulatory approval in an initial or subsequent indication for many reasons, including but not limited to the following: • the FDA, EMA, or comparable foreign regulatory authorities may disagree with the design, implementation, or the interpretation of the results of our clinical trials; • the FDA, EMA, or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately or insufficiently effective or have undesirable or unintended side effects, toxicities, or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • the FDA, EMA, or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA, BLA, or other submission or to obtain regulatory approval in the United States or elsewhere; • we may be unable to demonstrate to the FDA, EMA, or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio, on its own or when compared to the standard of care, is acceptable; • the FDA, EMA, or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures, and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and 63 • the approval policies or regulations of the FDA, EMA, or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval or resulting in delays in our regulatory approval, as seen, for example, in connection with the FDA’s approval of Biogen’s Aduhelm in Alzheimer’s disease amid questions regarding the underlying data, as well as the government investigation of the FDA’s approval process for Aduhelm.
Applications for our product candidates could fail to receive regulatory approval in an initial or subsequent indication for many reasons, including but not limited to the following: • the FDA, EMA, or comparable foreign regulatory authorities may disagree with the design, implementation, or the interpretation of the results of our clinical trials; • the FDA, EMA, or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately or insufficiently effective or have undesirable or unintended side effects, toxicities, or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • the FDA, EMA, or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA, BLA, or other submission or to obtain regulatory approval in the United States or elsewhere; • we may be unable to demonstrate to the FDA, EMA, or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio, on its own or when compared to the standard of care, is acceptable; • the FDA, EMA, or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures, and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA, EMA, or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval or resulting 53 in delays in our regulatory approval, as seen, for example, in connection with the FDA’s approval of Biogen’s Aduhelm in Alzheimer’s disease amid questions regarding the underlying data, as well as the government investigation of the FDA’s approval process for Aduhelm.
Even if we are able to establish agreements with third-party manufacturers, reliance on CDMOs entails additional risks, including: • the possible breach of the manufacturing agreement by the third party; • the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; 77 • the possible site closure or other change by the third party that would require adjustments to our production processes, location or otherwise; • reliance on the third party for regulatory compliance, quality assurance, safety, and pharmacovigilance and related reporting; and • the inability to produce required volume in a timely manner and to quality standards.
Even if we are able to establish agreements with third-party manufacturers, reliance on CDMOs entails additional risks, including: • the possible breach of the manufacturing agreement by the third party; • the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; • the possible site closure or other change by the third party that would require adjustments to our production processes, location or otherwise; • reliance on the third party for regulatory compliance, quality assurance, safety, and pharmacovigilance and related reporting; and • the inability to produce required volume in a timely manner and to quality standards.
Among other things, our charter documents: • establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving staggered three-year terms; 98 • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • provide that our directors may only be removed for cause; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; and • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above.
Among other things, our charter documents: • establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving staggered three-year terms; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • provide that our directors may only be removed for cause; • eliminate cumulative voting in the election of directors; 90 • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; and • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above.
If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations 97 by NASDAQ, the SEC, or other regulatory authorities, which would require additional financial and management resources.
If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources.
The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: • the demand for our product if we obtain regulatory approval; • our ability to receive or set a price that we believe is fair for our products; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: • the demand for our product if we obtain regulatory approval; 59 • our ability to receive or set a price that we believe is fair for our products; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
Our competitors also may obtain FDA, EMA, or other regulatory approval for their products more rapidly than we may obtain approval for ours, including through fast track 57 designation, priority review, accelerated approval or breakthrough therapy designation, and may obtain orphan drug exclusivity from the FDA for indications our product candidates are targeting, which could result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors also may obtain FDA, EMA, or other regulatory approval for their products more rapidly than we may obtain approval for ours, including through fast track designation, priority review, accelerated approval or breakthrough therapy designation, and may obtain orphan drug exclusivity from the FDA for indications our product candidates are targeting, which could result in our competitors establishing a strong market position before we are able to enter the market.
Factors that may inhibit our efforts to commercialize any approved product on our own include: • our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products; • our inability to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors; • the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability, and our ability to recognize revenue from such prices; • restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent commercialization organization.
Factors that may inhibit our efforts to commercialize any approved product on our own include: • our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products; • the inability to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors; • the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability, and our ability to recognize revenue from such prices; 48 • restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent commercialization organization.
Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. Risks Related to Regulatory Approval and Other Legal Compliance Matters The regulatory approval processes of the FDA, EMA, and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable.
Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. 52 Risks Related to Regulatory Approval and Other Legal Compliance Matters The regulatory approval processes of the FDA, EMA, and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable.
Such initiatives and legislation may affect the prices we may obtain or demand for any of our product candidates for which we may obtain regulatory approval. Further, in April 2022, CMS released a national policy for coverage of aducanumab and any future monoclonal antibodies directed against amyloid approved by the FDA with an indication for use in treating Alzheimer’s disease.
Such initiatives and legislation may affect the prices we may obtain or demand for any of our product candidates for which we may obtain regulatory approval. In April 2022, CMS released a national policy for coverage of aducanumab and any future monoclonal antibodies directed against amyloid approved by the FDA with an indication for use in treating Alzheimer’s disease.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
It is possible that a 91 court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
Such a license may not be available on commercially reasonable terms or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our 87 competitors gaining access to the same intellectual property.
Such a license may not be available on commercially reasonable terms or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability in particular in non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs, and trade barriers; • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • shipping of biologics/drugs; • trade protection measures, import or export licensing requirements, or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; (including the provisions of the recently enacted federal tax legislation titled the Inflation Reduction Act); • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; 93 • workforce uncertainty in countries where labor unrest is more common than in the United States; • difficulties associated with staffing and managing international operations, including differing labor relations; • potential liability under the FCPA, UK Bribery Act, or comparable foreign laws; and • business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods, droughts, extreme temperatures, and fires.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including recession, inflation, or political instability in non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs, and trade barriers; • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • shipping of biologics/drugs; • trade protection measures, import or export licensing requirements, trade tariffs, or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; (including the provisions of the recently enacted federal tax legislation titled the Inflation Reduction Act); • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is more common than in the United States; • difficulties associated with staffing and managing international operations, including differing labor relations; • potential liability under the FCPA, UK Bribery Act, or comparable foreign laws; and • business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods, droughts, extreme temperatures, and fires.
In addition, the manufacturing process for any products that we may develop is subject to FDA, EMA, and other foreign regulatory authority approval processes, and continuous oversight, and we will need to contract with manufacturers who can meet all applicable FDA, EMA, and other foreign regulatory authority requirements, including complying with cGMPs on an ongoing basis.
In addition, the manufacturing process for any products that we may develop is subject to FDA, EMA, and other foreign regulatory authority approval processes, and continuous oversight, and we will need to contract with manufacturers who can meet all applicable FDA, EMA, and other foreign regulatory authority requirements, including complying with current cGMPs on an ongoing basis.
The U.S. government may exercise its march-in rights if it determines that action is necessary because we fail to achieve the practical application of the government funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements for public use 81 under federal regulations, or to give preference to U.S. industry.
The U.S. government may exercise its march-in rights if it determines that action is necessary because we fail to achieve the practical application of the government funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements for public use under federal regulations, or to give preference to U.S. industry.
Any acquisition, collaboration, or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • volatility with respect to the financial reporting related to such arrangements, such as our expected variability in the recognition of revenue each quarter from the AbbVie and GSK Agreements based on the percentage-of-completion basis under the applicable accounting rules; • assumption of indebtedness or contingent liabilities; • potential goodwill impairment resulting from such acquisitions; • issuance of our equity securities which would result in dilution to our stockholders; • assimilation of operations, intellectual property, products, and product candidates of an acquired company by our partners, including difficulties associated with integrating new personnel; • diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition, collaboration or strategic partnership; • retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals, that may impact their ability to fulfill their obligations under such transaction; • risks that the other party to such a transaction may exercise its rights under the applicable agreement in a way that negatively impacts us; and • our inability to generate revenue from acquired or partnered intellectual property, technology, and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.
Any acquisition, collaboration, or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; 81 • volatility with respect to the financial reporting related to such arrangements, such as our expected variability in the recognition of revenue each quarter from the GSK Agreement based on the percentage-of-completion basis under the applicable accounting rules; • assumption of indebtedness or contingent liabilities; • potential goodwill impairment resulting from such acquisitions; • issuance of our equity securities which would result in dilution to our stockholders; • assimilation of operations, intellectual property, products, and product candidates of an acquired company by our partners, including difficulties associated with integrating new personnel; • diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition, collaboration or strategic partnership; • risks of retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals, that may impact their ability to fulfill their obligations under such transaction; • risks that the other party to such a transaction may exercise its rights under the applicable agreement in a way that negatively impacts us; and • our inability to generate revenue from acquired or partnered intellectual property, technology, and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.
Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster, geopolitical events, global pandemics, or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
Our ability to obtain supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster, geopolitical events, global pandemics, or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our preclinical studies or clinical trials of our product candidates may not be successfully completed or may not establish sufficient efficacy or safety to merit further clinical development or regulatory approval; 50 • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to have an acceptable safety profile or be sufficiently effective or otherwise does not meet applicable regulatory criteria; • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop and commercialize therapeutics that achieve greater market acceptance than our product candidates, including therapeutics that affect the same biological targets or pathways as our product candidates; • the product candidates that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights; • the product candidates that we develop may be covered by third parties’ patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in sufficient quantities for development or commercialization at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate, to gain market acceptance; and • a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors, if applicable.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our preclinical studies or clinical trials of our product candidates may not be successfully completed or may not establish sufficient efficacy or safety to merit further clinical development or regulatory approval; • a product candidate may upon further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to have an acceptable safety profile or be sufficiently effective or otherwise does not meet applicable regulatory criteria; 39 • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop and commercialize therapeutics that achieve greater market acceptance than our product candidates, including therapeutics that affect the same biological targets or pathways as our product candidates; • the product candidates that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights; • the product candidates that we develop may be covered by third parties’ patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in sufficient quantities for development or commercialization at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate, to gain market acceptance; and • a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors, if applicable.
For example, we may have inventorship disputes arise from conflicting obligations of employees, consultants, or others who are involved in developing our product candidates or other technologies. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership of our patents, trade secrets, or other intellectual property.
For example, we may have inventorship disputes arise from conflicting obligations of employees, consultants, or others who are or were involved in developing our product candidates or other technologies. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership of our patents, trade secrets, or other intellectual property.
Collectively, efforts by biopharmaceutical companies in the field of neurodegenerative diseases have seen limited success in drug development. There are currently limited approved therapeutic options available for patients with FTD, Alzheimer’s disease, Parkinson’s disease, and other neurodegenerative diseases. Recently approved therapies for the treatment of Alzheimer’s disease target a specific pathology (amyloid plaques).
Collectively, efforts by biopharmaceutical companies in the field of neurodegenerative diseases have seen limited success in drug development. There are currently limited approved therapeutic options available for patients with Alzheimer’s disease, Parkinson’s disease, and other neurodegenerative diseases. Recently approved therapies for the treatment of Alzheimer’s disease target a specific pathology (amyloid plaques).
Such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval. Any legal proceedings or claims involving or against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome.
Such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval. 51 Any legal proceedings or claims involving or against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome.
However, we may experience difficulties in patient enrollment in other clinical trials for a variety of reasons, including: • the size and nature of the patient population; • the patient eligibility criteria defined in the protocol, including biomarker-driven identification and/or certain highly specific criteria related to stage of disease progression, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication that do not have biomarker-driven patient eligibility criteria; • the size of the study population required for analysis of the trial’s primary endpoints; • the proximity of patients to a trial site; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • delays in enrolling patients in our clinical trials caused by worldwide economic conditions, including pandemics or other public health outbreaks and other geopolitical events; • competing clinical trials for similar therapies or targeting patient populations meeting our patient eligibility criteria; • availability of approved products that target the patient populations that we are seeking to enroll; • clinicians’ and patients’ perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies and product candidates; • our ability to obtain and maintain patient consents; and 55 • the risk that patients enrolled in clinical trials will not complete such trials or that we may not be able to collect data from such patients for any reason.
We may experience difficulties in patient enrollment in other clinical trials for a variety of reasons, including: • the size and nature of the patient population; • the patient eligibility criteria defined in the protocol, including biomarker-driven identification and/or certain highly specific criteria related to stage of disease progression, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication that do not have biomarker-driven patient eligibility criteria; • the size of the study population required for analysis of the trial’s primary endpoints; • the proximity of patients to a trial site; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; 44 • delays in enrolling patients in our clinical trials caused by worldwide economic conditions, including pandemics or other public health outbreaks and other geopolitical events; • competing clinical trials for similar therapies or targeting patient populations meeting our patient eligibility criteria; • availability of approved products that target the patient populations that we are seeking to enroll; • clinicians’ and patients’ perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies and product candidates; • our ability to obtain and maintain patient consents; and • the risk that patients enrolled in clinical trials will not complete such trials or that we may not be able to collect data from such patients for any reason.
Further, as product candidates are developed through preclinical studies to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize processes and results.
Further, as product candidates are developed through preclinical studies to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to scale processes and optimize results.
This 10-year marketing exclusivity period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical 61 benefits compared with existing therapies.
This 10-year marketing exclusivity period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies.
In certain circumstances, we rely on our collaborators or licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. 83 government agencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process.
In certain circumstances, we rely on our collaborators or licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process.
Although we maintain property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances, and our business may be seriously harmed by such delays and interruption. Our business is subject to economic, political, regulatory, and other risks associated with international operations.
Although we maintain property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances, and our business may be seriously harmed by such delays and interruption. 84 Our business is subject to economic, political, regulatory, and other risks associated with international operations.
If any of the foregoing occurs, the development, testing, and clinical trials of that product candidate may be delayed or become infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained in any or all jurisdictions in which such approval or launch is intended, which could significantly harm our business.
If any of the foregoing occurs, the development, testing, and clinical trials of that product candidate may be 47 delayed or become infeasible, and/or regulatory approval or commercial launch of any resulting product may be delayed or not obtained in any or all jurisdictions in which such approval or launch is intended, which could significantly harm our business.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any approved product for which we 58 retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval 55 process in others.
Misconduct by these parties could include intentional, reckless, and negligent conduct that fails to: • comply with the laws of the FDA, EMA, and other comparable foreign regulatory authorities; • provide true, complete, and accurate information to the FDA, EMA, and other comparable foreign regulatory authorities; • comply with clinical or manufacturing standards; • comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or • report financial information or data accurately or disclose unauthorized activities to us. 70 If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.
Misconduct by these parties could include intentional, reckless, and negligent conduct that fails to: • comply with the laws of the FDA, EMA, and other comparable foreign regulatory authorities; • provide true, complete, and accurate information to the FDA, EMA, and other comparable foreign regulatory authorities; • comply with clinical or manufacturing standards; • comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or • report financial information or data accurately or disclose unauthorized activities to us. 60 If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.
We do not expect to generate revenue from product sales for several years, if at all. The revenue we have generated from our collaboration arrangements with AbbVie and GSK has been, and from our collaboration arrangement with GSK is expected to continue to be, variable and limited in amount.
We do not expect to generate revenue from product sales for several years, if at all. The revenue we have generated from our collaboration arrangements with GSK, and previously, AbbVie, has been, and from our collaboration arrangement with GSK, is expected to continue to be, variable and limited in amount.
We borrowed $10,000,000 principal amount of the initial tranche of Term Loans on the closing date of the Loan Agreement. Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval.
We borrowed $10,000,000 principal amount of the initial tranche of Term Loans on the closing date of the Loan Agreement. 88 Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our product candidates or other technologies, or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our product candidates or other 78 technologies, or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.
In many jurisdictions outside the United States, a product candidate 65 must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to regulatory approval.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to regulatory approval.
In recent years, the stock market in general, and the market for pharmaceutical and biotechnology companies in particular, has experienced significant price and volume fluctuations that have often been unrelated or 95 disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.
In recent years, the stock market in general, and the market for pharmaceutical and biotechnology companies in particular, has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.
To obtain regulatory approval in countries outside the United States, we must comply with numerous and varying regulatory requirements of such countries regarding safety, efficacy, manufacturing and controls, clinical trials, commercial sales, pricing, and distribution of our product 51 candidates.
To obtain regulatory approval in countries outside the United States, we must comply with numerous and varying regulatory requirements of such countries regarding safety, efficacy, manufacturing and controls, clinical trials, commercial sales, pricing, and distribution of our product candidates.
They can be initiated through harmful websites or by leveraging phishing strategies, social engineering tactics, or credential stuffing. This might also include brute force attacks, along with other contemporary malicious methods which are always changing.
They can be initiated through harmful websites or 82 by leveraging phishing strategies, social engineering tactics, or credential stuffing. This might also include brute force attacks, along with other contemporary malicious methods which are always changing.
We do not have any manufacturing facilities. We currently rely on CDMOs for the manufacture of our materials for preclinical studies and clinical trials and expect to continue to do so for preclinical studies, clinical trials, and for commercial supply of any product candidates that we may develop.
We do not have any manufacturing facilities. We currently rely on CDMOs for the manufacture of our materials for research, preclinical studies and clinical trials and expect to continue to do so for research, preclinical studies, clinical trials, and for commercial supply of any product candidates that we may develop.
These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds 99 favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.
These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.
We conduct our operations at our facility in South San Francisco, California, a region that is headquarters to many other biotechnology companies as well as many academic and research institutions, which may limit our ability to hire competitively and retain highly qualified personnel from or outside of our region. 89 To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided and will continue to provide restricted stock units, stock option grants, and/or other equity awards that vest over time.
We conduct our operations at our facility in South San Francisco, California, a region that is headquarters to many other biotechnology companies as well as many academic and research institutions, which may limit our ability to hire competitively and retain highly qualified personnel from or outside of our region. 80 To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided and will continue to provide restricted stock units, stock option grants, and/or other equity awards that vest over time.
We have engaged in strategic collaborations in the past, such as our strategic collaborations with AbbVie and GSK, and we may engage in various acquisitions, collaborations, and strategic partnerships in the future, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses.
We have engaged in strategic collaborations in the past, such as our strategic collaborations with GSK, and previously, AbbVie, and we may engage in various acquisitions, collaborations, and strategic partnerships in the future, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses.
In addition, changing circumstances, including periods of rising inflation, may cause us to increase our spending significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of 48 circumstances beyond our control.
In addition, changing circumstances, including periods of rising inflation, may cause us to increase our spending significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.
We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be 62 able to obtain, sufficient capital to pay such amounts.
We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
Many of the risks relating to product development, regulatory approval, and commercialization described in this “Risk Factors” 76 section also apply to the activities of our collaborators and any negative impact on our collaborators may adversely affect us.
Many of the risks relating to product development, regulatory approval, and commercialization described in this “Risk Factors” section also apply to the activities of our collaborators and any negative impact on our collaborators may adversely affect us.
We anticipate that our expenses will increase substantially if and as we: • continue our research and drug discovery activities; • advance our research and development pipeline, including our target, indication, patient, and biomarker selections; • continue to develop and apply our ABC technology to potentially enhance our current and future product candidates’ penetration of the blood-brain barrier; • progress our current and any future product candidates through preclinical and clinical development; • initiate and conduct additional preclinical, clinical, or other studies for our product candidates and future commercial products; • work with our CDMOs to scale up the manufacturing processes for our product candidates or, in the future, establish and operate a manufacturing facility; • change or add contract manufacturers or suppliers for our product candidates and future commercial products; • seek regulatory approvals and marketing authorizations for our product candidates; 46 • establish sales, marketing, and distribution infrastructure to commercialize any products for which we obtain approval; • make milestone, royalty, or other payments due under any license or collaboration agreements; • take steps to seek protection of our intellectual property and defend our intellectual property against challenges from third parties; • obtain, maintain, protect, and enforce our intellectual property portfolio, including intellectual property obtained through license and collaboration agreements; • attract, hire, and retain qualified personnel • provide additional internal infrastructure to support our continued research and development operations and any planned commercialization efforts in the future; • implement additional internal systems and infrastructure related to cybersecurity; • make required payments under the Loan Agreement (defined below); • meet the requirements and demands of being a public company; • withstand periods of high rates of inflation; and • defend against any product liability claims or other lawsuits related to our products.
We anticipate that our expenses will increase substantially if and as we: • continue our research and drug discovery activities; • advance our research and development pipeline, including our target, indication, patient, and biomarker selections; • continue to develop and apply our ABC technology to potentially enhance our current and future product candidates’ penetration of the blood-brain barrier; • progress our current and any future product candidates through preclinical and clinical development; • initiate and conduct additional preclinical, clinical, or other studies for our product candidates and future commercial products; • work with our CDMOs to develop and scale up the manufacturing processes for our product candidates or, in the future, establish and operate a manufacturing facility; • change or add contract manufacturers or suppliers for our product candidates and future commercial products; • seek regulatory approvals and marketing authorizations for our product candidates; • establish sales, marketing, and distribution infrastructure to commercialize any products for which we obtain approval; • make milestone, royalty, or other payments due under any license or collaboration agreements; • take steps to seek protection of our intellectual property and defend our intellectual property against challenges from third parties; 35 • obtain, maintain, protect, and enforce our intellectual property portfolio, including intellectual property obtained through license and collaboration agreements; • attract, hire, and retain qualified personnel; • provide additional internal infrastructure to support our continued research and development operations and any planned commercialization efforts in the future; • implement additional internal systems and infrastructure related to cybersecurity; • make required payments under the Loan Agreement; • meet the requirements and demands of being a public company; • withstand high rates or sustained periods of inflation; and • defend against any product liability claims or other lawsuits related to our products.
We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
We are unable to predict the future course of federal or state healthcare legislation or actions in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction.
There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent 74 application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction.
Developing our product candidates and conducting clinical trials for the treatment of neurodegenerative diseases, including FTD, Alzheimer’s disease, and Parkinson’s disease, will require substantial amounts of capital.
Developing our product candidates and conducting clinical trials for the treatment of neurodegenerative diseases, including Alzheimer’s disease, and Parkinson’s disease, will require substantial amounts of capital.
Our actual or perceived failure to adequately comply with applicable laws and regulations relating to security, privacy, and data protection, to protect our systems, personal data, and other data we process or maintain, or to obtain appropriate consent with respect to our use, processing, disclosure or transfer of personal data, including data obtained in our clinical trials, could result in regulatory fines, investigations and enforcement actions, penalties and other liabilities, claims for damages by affected individuals, and damage to our reputation, and could impact our ability to use, process, disclose, or transfer data obtained in our clinical trials, any of which could materially affect our business, financial condition, results of operations, and prospects.
Our actual or perceived failure to adequately comply with applicable laws, regulations, or other actual or asserted obligations relating to security, privacy, and data protection, to protect our systems, personal data, and other data we process or maintain, or to obtain appropriate consent with respect to our use, processing, disclosure or transfer of personal data, including data obtained in our clinical trials, could result in regulatory fines, investigations and enforcement actions, penalties and other liabilities, claims for damages by affected individuals, and damage to our reputation, and could impact our ability to use, disclose, transfer, or otherwise process data obtained in our clinical trials, any of which could materially affect our business, financial condition, results of operations, and prospects.
We are continually working to comply with these laws, and we have devoted, and anticipate needing to continue to devote, significant additional resources to our compliance efforts.
We are continually working to comply with these laws and regulations, and we have devoted, and anticipate needing to continue to devote, significant additional resources to our compliance efforts.
Therefore, we cannot be certain that we or our collaborators were first to file for patent protection of such inventions. 79 If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected.
Therefore, we cannot be certain that we or our collaborators were first to file for patent protection of such inventions. 70 If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by clinical-stage biotechnology companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by biotechnology companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.
In addition, we may need the 80 cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
In addition, we may need the 71 cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our 72 current or past facilities and at third-party facilities.
In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our 62 current or past facilities and at third-party facilities.
The Loan Agreement provides for an initial $25.0 million tranche of Term Loans available through June 30, 2026, $10.0 million of which we borrowed at closing. Our ability to borrow an additional tranche of $25.0 million is subject to agreement on the terms and conditions thereof and the sole discretion of the Lenders.
The Loan Agreement provides for an initial $25.0 million tranche of Term Loans available through June 30, 2026, $10.0 million of which we borrowed at closing. Our ability to borrow an additional tranche of $25.0 million is subject to the terms and conditions of the Loan Agreement and at the sole discretion of the Lenders.
These laws and regulations include the General Data Protection Regulation (GDPR) in the European Union and similar requirements in other jurisdictions, as well as privacy laws within the United States. These security and data protection and privacy-related laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.
These laws and regulations include the General Data Protection Regulation (GDPR) in the European Union and similar requirements in other jurisdictions, as well as privacy laws and regulations within the United States. These laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.
Litigation may be necessary to defend against these claims. If we fail in defending any such 86 claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. 77 Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
On January 17, 2024, we entered into an underwriting agreement with Cantor Fitzgerald & Co. (Cantor), pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor.
On January 17, 2024, we entered into an underwriting agreement with Cantor, pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor.
Our operations, and those of our collaborators, CROs, CDMOs, suppliers, and other contractors and consultants, could be subject to pandemic events and other events beyond our control, such as the spread of disease, earthquakes, power shortages, telecommunications failures, software outages or other system failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, pandemics, regional health issues, political unrest, including the ongoing conflicts between Russia and Ukraine and in the Middle East, and other natural or man-made disasters or business interruptions, for which we are either totally or partly uninsured.
Our operations, and those of our collaborators, CROs, CDMOs, suppliers, and other contractors and consultants, could be subject to events beyond our control, such as pandemics or the spread of disease, earthquakes, power shortages, telecommunications failures, software outages or other system failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, pandemics, regional health issues, geopolitical events, including the ongoing conflicts between Russia and Ukraine and in the Middle East, and other natural or man-made disasters or business interruptions, for which we are either totally or partly uninsured.
If we are unable to successfully identify, acquire, develop, and commercialize additional product candidates, our commercial opportunity may be limited. For example, we are developing our proprietary BBB technology platform (Alector Brain Carrier, or ABC) to support selected next-generation product candidates.
If we are unable to successfully identify, acquire, develop, and commercialize additional product candidates, our commercial opportunity may be limited. For example, we are developing our proprietary BBB technology platform (Alector Brain Carrier, or ABC) to support selected product candidates.
Our decisions concerning the allocation of research, development, collaboration, management, and financial resources toward particular technology, product candidates or therapeutic areas may not lead to the development of any viable commercial product and may divert resources away from better opportunities.
Our decisions concerning the allocation of research, development, collaboration, management, and financial resources toward particular technologies, product candidates or therapeutic areas may not lead to the development of any viable commercial product and may divert resources away from better opportunities.
We cannot predict the success of our current collaborations or any collaboration that we may enter into. 74 Collaborations involving our research programs, or any product candidates we may develop, pose risks to us, including the following: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may decide to not pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs, for example, based on clinical trial results, changes in the collaborator’s strategic focus or available funding, the collaborator’s assessment regarding the commercial viability of the product candidate, or external factors such as an acquisition that diverts resources or creates competing priorities or collaborators may elect to fund or commercialize a competing product; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, provide insufficient quantities of materials for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; • collaborators may not properly obtain, maintain, enforce, or defend intellectual property or proprietary rights relating to our product candidates or research programs or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity, and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates or research and development programs that results from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates or research programs; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our product candidates; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our product candidates or research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may restrict us from researching, developing, or commercializing certain products or technologies without their involvement; • collaborators with manufacturing, marketing, or distribution rights to one or more product candidates may not commit sufficient resources to the manufacture, marketing, or distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may grant sublicenses to our technology or product candidates or undergo a change of control, and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; 75 • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how, or intellectual property of the collaborator relating to our products, product candidates, or research programs; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; • if our collaborators do not satisfy their obligations under our agreements with them, if they terminate our collaborations with them, or if we fail to satisfy our obligations to our collaborators, we may not be able to develop or commercialize product candidates as planned; • the terms of a collaboration agreement may be amended in a manner that could negatively impact us; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control, and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; and • if a present or future collaborator of ours were to be involved in a business combination, such as a merger or acquisition, the continued pursuit and emphasis on our development or commercialization program under such collaboration could be delayed, diminished, or terminated.
Collaborations involving our research programs, or any product candidates we may develop, pose risks to us, including the following: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may decide to delay or not pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs, for example, based on clinical trial results, changes in the collaborator’s strategic focus or available funding, the collaborator’s assessment regarding the commercial viability of the product candidate, or external factors such as an acquisition that diverts resources or creates competing priorities or collaborators may elect to fund or commercialize a competing product; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, provide insufficient quantities of materials for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; • collaborators may not properly obtain, maintain, enforce, or defend intellectual property or proprietary rights relating to our product candidates or research programs or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity, and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates or research and development programs that results from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates or research programs; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our product candidates; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our product candidates or research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may restrict us from researching, developing, or commercializing certain products or technologies without their involvement; • collaborators with manufacturing, marketing, or distribution rights to one or more product candidates may not commit sufficient resources to the manufacture, marketing, or distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; 65 • collaborators may grant sublicenses to our technology or product candidates or undergo a change of control, and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how, or intellectual property of the collaborator relating to our products, product candidates, or research programs; • significant reductions in federal funding, such as research grants, to academic and other institutions may result in reduced opportunities to collaborate with such institutions; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; • if our collaborators do not satisfy their obligations under our agreements with them, if they terminate our collaborations with them, or if we fail to satisfy our obligations to our collaborators, we may not be able to develop or commercialize product candidates as planned; • the terms of a collaboration agreement may be amended in a manner that could negatively impact us; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control, and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; and • if a present or future collaborator of ours were to be involved in a business combination, such as a merger or acquisition, the continued pursuit and emphasis on our development or commercialization program under such collaboration could be delayed, diminished, or terminated.
Should the FDA or other government agency issue additional guidance that mandates material changes to our clinical trials in response to a pandemic or other public health outbreak, the costs of such clinical trials may increase.
Should the FDA or other government agency issue additional guidance that mandates material changes to our clinical trials, e.g., in response to a pandemic or other public health outbreak, the costs of such clinical trials may increase.
Additionally, GSK is conducting the PROGRESS-AD Phase 2 trial with AL101/GSK4527226, and Alector is responsible for up to $140.5 million of the costs of such study. As such, the timing at which such costs are incurred, and the day-to-day operations of conducting such study are not within Alector’s control. We may face significant competition in seeking appropriate collaborations.
Additionally, GSK is conducting the PROGRESS-AD Phase 2 trial with nivisnebart, and Alector is responsible for up to $140.5 million of the costs of such study. As such, the timing at which such costs are incurred, and the day-to-day operations of conducting such study are not within Alector’s control. We may face significant competition in seeking appropriate collaborations.
There can be no assurance that the services of these independent organizations, advisors, and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements.
There can be no assurance that the services of these independent contractors, advisors, and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements.
There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all.
There can be no assurance that we will be able to manage our existing independent contractors, advisors or consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Changes at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, lack of adequate funding to continue the clinical trial, and impacts of worldwide economic conditions, and other public health outbreaks and geopolitical events.
Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, decreases in regulatory agency funding, staffing, or operations, lack of adequate funding to continue the clinical trial, and impacts of worldwide economic conditions, including trade tariffs, public health outbreaks and geopolitical events.
The regulations that govern marketing approvals, pricing, and reimbursement for new drugs vary widely from country to country. In the United States, recently enacted or potential future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals.
The regulations that govern marketing approvals, pricing, and reimbursement for new drugs vary widely from country to country. In the United States, recently enacted or potential future legislation or other government action may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals.
We will be required to report certain adverse reactions and production problems, if any, to the FDA, EMA, and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to ensure compliance.
We will be required to report certain adverse reactions and production problems, if any, to the FDA, EMA, and comparable foreign regulatory authorities. Any new legislation or other government action addressing drug safety issues could result in delays in product development or commercialization, or increased costs to ensure compliance.
In an infringement proceeding, a court may decide that a patent in which we have an interest is invalid or unenforceable, the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1), or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
In an infringement proceeding, a court may decide that a patent in which we have an interest is invalid or unenforceable, the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1), or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question and are therefore not infringed.
In addition, there 88 could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.
In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or 79 trademarks that incorporate variations of our registered or unregistered trademarks or trade names.
We have product candidates in development, and all will require significant additional clinical development, management of preclinical, clinical, and manufacturing activities, regulatory approval, adequate manufacturing supply, a commercial organization, and significant marketing efforts before we generate any revenue from product sales, if at all. We have never completed a clinical development program.
We have product candidates in development, and all will require significant additional clinical development, management of preclinical, clinical, and manufacturing activities, regulatory approval, adequate manufacturing supply, a commercial organization, and significant marketing efforts before we generate any revenue from product sales, if at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn the event of a cybersecurity incident, the Head of Cybersecurity implements an incident response plan. This plan includes immediate actions to mitigate the impact of incidents and strategies for remediation of future incidents. The Head of Cybersecurity is responsible for reporting information about cybersecurity risks and incidents to our Chief Financial Officer and other members of executive management.
Biggest changeIn the event of a cybersecurity incident, the Head of Cybersecurity, together with our external service 92 providers, implements an incident response plan. This plan includes immediate actions to mitigate the impact of incidents and strategies for remediation of future incidents.
Our Head of Cybersecurity is regularly informed about developments in cybersecurity, including potential threats and innovative risk management techniques in the interest of effective prevention, detection, mitigation, and 100 remediation of cybersecurity incidents. The Head of Cybersecurity oversees the processes for monitoring our information systems, including periodic system audits to identify potential vulnerabilities and third-party audits and evaluations.
Our Head of Cybersecurity is regularly informed about developments in cybersecurity, including potential threats and innovative risk management techniques in the interest of effective prevention, detection, mitigation, and remediation of cybersecurity incidents. The Head of Cybersecurity oversees the processes for monitoring our information systems, including periodic system audits to identify potential vulnerabilities and third-party audits and evaluations.
We also maintain a team of cybersecurity professionals who are responsible for security operations and report to the Head of Cybersecurity, who has more than 20 years’ experience in cybersecurity and information technology infrastructure and operations.
We also maintain a team of cybersecurity professionals who are responsible for security operations and report to the Head of Cybersecurity, who has more than 18 years’ experience in cybersecurity and information technology infrastructure and operations.
Our board of directors oversees our enterprise risk management, including our management of cybersecurity risks. The audit committee of our board of directors has primary responsibility for the oversight of risks from cybersecurity threats.
The audit committee of our board of directors has primary responsibility for the oversight of risks from cybersecurity threats.
Governance Our Vice President, Technology and Digital Health, serves as our Head of Cybersecurity and is responsible for developing and executing our cybersecurity strategy and program.
Governance Our Associate Director of IT serves as our Head of Cybersecurity and is responsible for developing and executing our cybersecurity strategy and program. This individual, who reports to our Chief People and Places Officer, works closely with external cybersecurity and information technology service providers who support our security operations.
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The Head of Cybersecurity is responsible for reporting information about cybersecurity risks and incidents to our Chief People and Places Officer and other members of executive management. Our board of directors oversees our enterprise risk management, including our management of cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also subleased approximately 9,300 square feet of our corporate headquarters in February 2023 with a lease term that will expire in July 2025. We lease approximately 18,700 square feet of additional office and laboratory space in Newark, California.
Biggest changeWe also subleased approximately 13,000 square feet of the corporate headquarters in February 2025 and expanded the sublease to 15,200 square feet in August 2025, with a lease term that will expire in March 2029. We also subleased approximately 7,700 square feet of the corporate headquarters in December 2025, with a lease term that will expire in July 2027.
The lease agreement also provides us a right of first offer to expand into available office space in the building. We subleased approximately 7,100 square feet of our corporate headquarters in November 2021 with a lease term that expired in December 2022.
The lease agreement also provides us a right of first offer to expand into available office space in the building. We subleased approximately 9,300 square feet of our corporate headquarters in February 2023 with a lease term that expired in July 2025.
In August 2024, we approved a plan to transition operations from our laboratory and office space in Newark, California to our South San Francisco headquarters. Our intention is to sublease the Newark facility. We believe that our South San Francisco facilities will be adequate for our near-term needs.
We lease approximately 18,700 square feet of additional office and laboratory space in Newark, California. In August 2024, we approved a plan to transition operations from our laboratory and office space in Newark, California to our South San Francisco headquarters. Our intention is to sublease the Newark facility.
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Additionally, we subleased approximately 13,150 square feet of our corporate headquarters in May 2022 with a lease term that expired in November 2023. We also subleased approximately 13,250 square feet of the Headquarters in November 2023 with a lease term that expired in November 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation, or other legal proceedings can have an adverse impact on us because of legal fees and settlement costs, diversion of management resources, and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 101 PART II
Biggest changeRegardless of outcome, litigation, or other legal proceedings can have an adverse impact on us because of legal fees and settlement costs, diversion of management resources, and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 93 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe are also prohibited from declaring or paying any cash dividends under our Loan Agreement.
Biggest changeWe are also prohibited from declaring or paying any cash dividends under our Loan Agreement. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved].
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol ”ALEC.” Holders of Record As of February 21, 2025, there were approximately 5 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol ”ALEC.” Holders of Record As of February 20, 2026, there were approximately 6 stockholders of record of our common stock.
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Stock Performance Graph This graph is not “soliciting material” or deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities under that Section, and shall not be deemed incorporated by reference into any filing of Alector, Inc. under the Securities Act of 1933, as amended (the Securities Act), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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The following graph compares the cumulative total return to stockholder return on our common stock relative to the cumulative total returns of the NASDAQ Composite Index and the NASDAQ Biotechnology Index.
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An investment of $100 is assumed to have been made in our common stock and each index on February 7, 2019 (the first day of trading of our common stock) and its relative performance is tracked through December 31, 2024.
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Pursuant to applicable Securities and Exchange Commission rules, all values assume reinvestment of the full amount of all dividends, however no dividends have been declared on our common stock to date.
Removed
The stockholder returns shown on the graph below are based on historical results and are not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 102 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved].

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+14 added−26 removed23 unchanged
Biggest changeTo pursue this aim, we are advancing a portfolio of programs that address genetically validated targets. These programs leverage our deep understanding of the genetic underpinnings of these diseases, combined with our expertise in drug development, proprietary protein engineering, antibody discovery, and our innovative Alector Brain Carrier (ABC) technology for blood-brain barrier transport.
Biggest changeWe are advancing a portfolio of programs focused on genetically validated targets, supported by our experience in drug development, protein engineering, and antibody discovery. A key component of our strategy is the development and application of our Alector Brain Carrier (ABC) platform, a proprietary blood-brain barrier (BBB) delivery technology designed to improve central nervous system exposure across multiple therapeutic modalities.
Research and development expenses consist primarily of costs incurred for the discovery and development of our product candidates, which include: • expenses incurred under agreements with third-party contract organizations, preclinical testing organizations, and consultants; • costs related to production of clinical materials, including fees paid to contract manufacturers; • laboratory and vendor expenses related to the execution of preclinical studies and clinical trials; • personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel engaged in research and development functions; • costs related to the preparation of regulatory submissions; • third-party license fees; and • facilities and other expenses, which include expenses for rent and maintenance of facilities, depreciation and amortization expense, and other supplies.
Research and development expenses consist primarily of costs incurred for the discovery and development of our product candidates, which include: • expenses incurred under agreements with third-party contract organizations, preclinical testing organizations, and consultants; • costs related to production of research, preclinical, and clinical materials, including fees paid to contract manufacturers; • laboratory and vendor expenses related to the execution of research, preclinical studies and clinical trials; • personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel engaged in research and development functions; • costs related to the preparation of regulatory submissions; • third-party license fees; and • facilities and other expenses, which include expenses for rent and maintenance of facilities, depreciation and amortization expense, and other supplies.
Additionally, on November 14, 2024, we entered into the Loan Agreement with our subsidiary, Alector LLC, as a co-borrower, the Lenders, and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and the Lenders, pursuant to which we may access up to two tranches of Term Loans in an aggregate principal amount of up to $50,000,000.
Additionally, on November 14, 2024, we entered into a loan agreement with our subsidiary, Alector LLC, as a co-borrower, the Lenders, and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and the Lenders (the Loan Agreement), pursuant to which we may access up to two tranches of Term Loans in an aggregate principal amount of up to $50,000,000.
Investing Activities For the year ended December 31, 2024, cash provided by investing activities of $107.1 million was primarily related to the maturities of marketable securities of $573.6 million offset by purchases of marketable securities of $467.7 million.
For the year ended December 31, 2024, cash provided by investing activities of $107.1 million was primarily related to the maturities of marketable securities of $573.6 million offset by purchases of marketable securities of $467.7 million.
Financing Activities For the year ended December 31, 2024, cash provided by financing activities of $81.5 million was primarily from the issuance of common stock of $71.1 million upon a public offering and the debt issuance of $9.4 million.
For the year ended December 31, 2024, cash provided by financing activities of $81.5 million was primarily from the issuance of common stock of $71.1 million upon a public offering and the debt issuance of $9.4 million.
General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees paid for accounting, auditing, consulting, and tax services, insurance costs, and facility costs not otherwise included in research and development expenses. 105 Other Income, Net Other income, net consists primarily of interest earned on our cash equivalents and marketable securities.
General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees paid for accounting, auditing, consulting, and tax services, insurance costs, and facility costs not otherwise included in research and development expenses. Other Income, Net Other income, net consists primarily of interest earned on our cash equivalents and marketable securities.
We recognize revenue from the upfront payments from GSK at a point in time for a development license and over time for research and development services. Revenues for research and development services are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation.
We recognize revenue from the upfront payments from GSK at a point in time for a development license and over time for research and development services. Revenues for research and development services are recognized as the program 95 costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation.
The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods.
The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred 100 during the reporting periods.
To date, we have not had any products approved for sale and have not generated any revenue from product sales. Further, we do not expect to generate revenue from product sales until such time, if ever, that we are able to successfully complete the development and obtain marketing approval for one of our product candidates.
To date, we have not had any products approved for sale and have not generated any product or royalty revenue from product sales. Further, we do not expect to generate revenue from product sales until such time, if ever, that we are able to successfully complete the development and obtain marketing approval for one of our product candidates.
Liquidity and Capital Resources Since our inception through December 31, 2024, our operations have been financed primarily by our collaborations with AbbVie and GSK and the issuance and sale of convertible preferred stock and of common stock upon the completion of our IPO and follow-on equity and debt financings.
Liquidity and Capital Resources Since our inception through December 31, 2025, our operations have been financed primarily by our collaborations with AbbVie and GSK and the issuance and sale of convertible preferred stock and of common stock upon the completion of our IPO and follow-on equity and debt financings.
If we were unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.
If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.
We borrowed $10,000,000 principal amount of the initial tranche of Term Loans on the closing date of the Loan Agreement. We expect to obtain substantial additional funding in the future for our research and development activities and continuing operations.
We borrowed $10,000,000 principal amount of the initial tranche of Term Loans on the closing date of the Loan Agreement. We will need to obtain substantial additional funding in the future for our research and development activities and continuing operations.
Our future capital requirements will depend on many factors, including: • the timing and progress of preclinical and clinical development activities; including, without limitation, our collaboration efforts with GSK; • the number and scope of preclinical and clinical programs we decide to pursue; • successful enrollment in and completion of clinical trials; • our ability to establish agreements with third-party manufacturers for clinical supply for our clinical trials and, if our product candidates are approved, commercial manufacturing; • our ability to maintain our current research and development programs and establish new research and development programs; • addition and retention of key research and development personnel; • our efforts to enhance operational, financial, and information management systems, and hire additional personnel, including personnel to support development of our product candidates; • the costs associated with workforce reductions; • negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations; • the timing and amount of milestone and other payments we may receive under our collaboration arrangements; • the costs and timing of regulatory approvals; • our eventual commercialization plans for our product candidates; • the effects of inflationary pressures; and 108 • the costs involved in prosecuting, defending, and enforcing patent claims and other intellectual property claims.
Our future capital requirements will depend on many factors, including: • the timing and progress of preclinical and clinical development activities; including, without limitation, our collaboration efforts with GSK; • the number and scope of preclinical and clinical programs we decide to pursue; • successful enrollment in and completion of clinical trials; • our ability to establish agreements with third-party manufacturers for clinical supply for our clinical trials and, if our product candidates are approved, commercial manufacturing; • the timing and progress of our current research and development programs and our ability to establish new research and development programs; • addition or retention of key research and development personnel; • our efforts to maintain or enhance operational, financial, and information management systems, and hire or retain personnel, including personnel to support development of our product candidates; • the costs associated with workforce reductions; • negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations; • the timing and amount of milestone and other payments we may receive under our collaboration arrangements; • the costs and timing of regulatory approvals; • our eventual commercialization plans for our product candidates; 99 • the effects of macroeconomic conditions, including inflationary pressures and economic impacts of tariffs and global trade disruptions; and • the costs involved in prosecuting, defending, and enforcing patent claims and other intellectual property claims.
Our revenue to date has been primarily related to the AbbVie Agreement and GSK Agreement for the license and co-development of product candidates with those parties. We recognize revenue from the upfront payments and the milestone payment received from AbbVie over time as services are provided.
Our revenue to date has been primarily related to the AbbVie Agreement and GSK Agreement for the license and co-development of product candidates with those parties. We recognized revenue from the upfront payments and the milestone payment received from AbbVie over time as services were provided.
On November 7, 2023, we entered into an at-the-market sales agreement with TD Cowen pursuant to which we may offer and sell from time to time through TD Cowen up to $125,000,000 of shares of our common stock, in such share amounts as we may specify by notice to TD Cowen.
On November 7, 2023, we entered into an at-the-market sales agreement with TD Securities (USA) LLC (TD Securities, formerly known as Cowen and Company, LLC) pursuant to which we may offer and sell from time to time through TD Securities up to $125,000,000 of shares of our common stock, in such share amounts as we may specify by notice to TD Securities (the Sales Agreement).
In such case, we will no longer conduct development or commercialization of that product and we will receive royalties on net sales of the product in the United States instead of a share of profits.
In such case, we will no longer conduct development or commercialization of that product, we will receive royalties on net sales of the product in the United States instead of a share of profits, and certain milestones will be reduced.
We may also choose to seek additional financing opportunistically. We may seek to raise capital through public equity or debt financings, license agreements, collaborative agreements or other arrangements with other companies, asset sales, or through other sources of financing.
We may seek to raise capital through public equity or debt financings, license agreements, collaborative agreements or other arrangements with other companies, asset sales, or through other sources of financing.
Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. 106 Research and Development Expenses Research and development expenses were $185.9 million for the year ended December 31, 2024, compared to $192.1 million for the year ended December 31, 2023.
Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. 97 Research and Development Expenses Research and development expenses were $123.1 million for the year ended December 31, 2025, compared to $185.9 million for the year ended December 31, 2024.
We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable 103 future. We have incurred net losses in each year since inception and we expect to continue to incur net losses for the foreseeable future.
We will continue to require additional capital to develop our product candidates, advance our research and preclinical programs, and fund operations for the foreseeable future. We have incurred net losses in each year since inception, and we expect to continue to incur net losses for the foreseeable future.
We expect our expenses will increase substantially in connection with our ongoing activities, as we: • advance product candidates through preclinical studies and clinical trials; • pursue regulatory approval of product candidates; • hire additional personnel; • acquire, discover, validate, and develop additional product candidates; • require the manufacture of supplies for our preclinical studies and clinical trials; and • obtain, maintain, expand, and protect our intellectual property portfolio.
We expect our expenses will increase substantially in connection with our ongoing activities, as we: • advance product candidates through preclinical studies and clinical trials; • pursue regulatory approval of product candidates; • discover, validate, and develop additional product candidates; • require the manufacture of drug supply for our research, preclinical studies and clinical trials; and • obtain, maintain, and protect our intellectual property portfolio.
This was mainly due to the net loss of $119.0 million. We also had a decrease in deferred revenue of $100.6 million and a decrease in refund liability of $46.0 million. This was offset by a non-cash charge of $39.5 million for stock-based compensation. For the year ended December 31, 2023, cash used in operating activities was $184.2 million.
This was mainly due to the net loss of $119.0 million. We also had a decrease in deferred revenue of $100.6 million and a decrease in refund liability of $46.0 million. This was offset by a non-cash charge of $39.5 million for stock-based compensation.
Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $119.0 million, $130.4 million, and $133.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $829.1 million.
Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $142.9 million and $119.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $972.1 million.
As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $413.4 million, which we anticipate provides runway through 2026. Components of Results of Operations Revenue We have not generated any revenue from product sales and do not expect to do so in the near future.
As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $256.0 million, which we anticipate provides runway at least through 2027. Components of Results of Operations Revenue We have not generated any product or royalty revenue from product sales and do not expect to do so in the near future.
In the United States, Alector and GSK will equally share profits and losses from commercialization of latozinemab and AL101. We may opt out of the sharing of development costs and of profit and losses from commercialization in the United States on a product-by-product basis.
We may opt out of the sharing of development costs and of profit and losses from commercialization in the United States on a product-by-product basis.
On January 17, 2024, we entered into an underwriting agreement with Cantor, pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor.
(Cantor), pursuant to which we offered and sold 10,869,566 shares of the Company’s common stock at a price per share of $6.57 paid by Cantor.
We have an omnibus shelf registration statement on Form S-3 with the SEC, which became effective on May 1, 2023, which permits us to issue up to $400 million in common stock, other equity securities and/or debt securities.
We have an omnibus shelf registration statement on Form S-3 with the SEC, which became effective on May 1, 2023, which permits us to issue up to $400 million in common stock, other equity securities and/or debt securities. We will need to obtain substantial additional funding in the future for our research and development activities and continuing operations.
Our operations have been financed primarily through our collaborations with AbbVie and GSK and the issuance and sale of convertible preferred stock and of common stock upon the completion of our initial public offering (IPO) and follow-on equity and debt financings.
Our operations have been financed primarily through our collaboration with GSK, our previous collaboration with AbbVie, entered into in October 2017 and terminated in February 2025, the issuance and sale of convertible preferred stock and of common stock upon the completion of our initial public offering (IPO), and follow-on equity financings.
Other Income, Net Other income, net was $26.1 million for the year ended December 31, 2024, compared to $26.6 million for the year ended December 31, 2023. The decrease of $0.5 million was due to lower interest income from a reduction in marketable securities used to fund our operations.
The decrease of $12.9 million was due to lower interest income from a reduction in marketable securities used to fund our operations. Income Tax Expense Income tax expense was $0.2 million for the year ended December 31, 2025, compared to $0.1 million for the year ended December 31, 2024.
Specific program expenses include expenses associated with the development of our most advanced product candidates: latozinemab, which is being studied in a pivotal Phase 3 clinical trial, INFRONT-3; and AL101, which is being studied in a PROGRESS-AD Phase 2 clinical trial.
Specific program expenses include expenses associated with the development of our most advanced product candidate, nivisnebart, which is being studied in the PROGRESS-AD Phase 2 clinical trial.
For the year ended December 31, 2023, cash provided by investing activities of $101.9 million was primarily related to the maturities of marketable securities of $652.5 million offset by purchases of marketable securities of $551.7 million.
Investing Activities For the year ended December 31, 2025, cash provided by investing activities of $196.6 million was primarily related to the maturities of marketable securities of $465.5 million offset by purchases of marketable securities of $271.9 million.
On November 25, 2024, we committed to a plan to reduce our workforce by approximately 17% to better align our resources with our strategic priorities. We initiated such reduction in force impacting approximately 41 employees across the organization.
On March 7, 2025, we committed to a plan to reduce our workforce by approximately 13% to better align our resources with our strategic priorities including advancing our preclinical and research pipeline. We initiated such reduction in force impacting approximately 25 employees across the organization.
As of December 31, 2024, we had $413.4 million of cash, cash equivalents, and marketable securities. As of December 31, 2024, we had an accumulated deficit of $829.1 million.
As of December 31, 2025, we had $256.0 million of cash, cash equivalents, and marketable securities. As of December 31, 2025, we had an accumulated deficit of $972.1 million.
We expect our expenses to continue to increase in connection with our ongoing activities, in particular as we continue to advance our product candidates and our discovery programs.
We expect our expenses to continue to increase in connection with our ongoing activities, in particular as we continue to advance our product candidates and our discovery and research programs. In addition, we expect to incur additional costs associated with operating as a public company.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “Risk Factors” included elsewhere in this report. Overview We are a late-stage clinical biotechnology company with a mission to make degenerative brain disorders history.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “Risk Factors” included elsewhere in this report. Overview We are a clinical-stage biotechnology company developing therapies for neurodegenerative diseases, with a focus on areas of high unmet medical need.
This was mainly due to the net loss of $130.4 million. We also had a decrease in deferred revenue of $66.8 million and a decrease in refund liability of $24.5 million. This was offset by a non-cash charge of $42.8 million for stock-based compensation. For the year ended December 31, 2022, cash used in operating activities was $20.3 million.
This was mainly due to the net loss of $142.9 million. We also had a decrease in deferred revenue of $21.0 million and a decrease in refund liability of $50.0 million. This was offset by a non-cash charge of $26.7 million for stock-based compensation. For the year ended December 31, 2024, cash used in operating activities was $230.0 million.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Cash used in operating activities $ (229,905 ) $ (184,162 ) $ (20,329 ) Cash provided by (used in) investing activities 107,131 101,918 (159,014 ) Cash provided by financing activities 81,540 2,550 4,514 Operating Activities For the year ended December 31, 2024, cash used in operating activities was $230.0 million.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Cash used in operating activities $ (184,031 ) $ (229,905 ) Cash provided by investing activities 196,597 107,131 Cash provided by financing activities 20,215 81,540 Operating Activities For the year ended December 31, 2025, cash used in operating activities was $184.0 million.
For the year ended December 31, 2024, we recorded an increase to collaboration revenue under the AbbVie Agreement due to changes in estimated costs to satisfy the performance obligations resulting from the termination of the AL002 program. Accrued Research and Development Expenses We record accrued expenses for estimated preclinical study and clinical trial expenses.
For the year ended December 31, 2025, we recorded an $8.9 million increase to collaboration revenue under the GSK Agreement due to a decrease in total expected costs to satisfy the performance obligations for the nivisnebart program. Accrued Research and Development Expenses We record accrued expenses for estimated preclinical study and clinical trial expenses.
We also have expenses related to the discovery and development of future product candidates and separately tracked expenses related to programs that we expect to move out of preclinical studies and into Phase 1 clinical trials. These expenses primarily relate to salaries and benefits, stock-based compensation, facility expenses, including depreciation, and lab consumables.
We also have expenses related to the research and development of future product candidates and separately tracked expenses related to programs that we expect to move out of preclinical studies and into Phase 1 clinical trials.
Where we share costs with our collaboration partners, such as in our GSK Agreement, research and development expenses may include cost sharing reimbursements from, or payments to, our partner.
These expenses primarily relate to salaries and benefits, stock-based compensation, facility expenses, including depreciation, and lab consumables. 96 Where we share costs with our collaboration partners, such as in our GSK Agreement, research and development expenses may include reimbursements from, or payments to, our partner.
Alector and GSK are jointly developing latozinemab and AL101. In May 2023, we and GSK amended the GSK Agreement. Under the terms of the GSK Amendment, we are responsible for funding GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 clinical trial of AL101 in AD.
Under the current terms of the GSK Agreement, we are responsible for funding GSK’s and our development costs up to $140.5 million for the conduct of the initial Phase 2 clinical trial of nivisnebart in AD. In the United States, Alector and GSK agreed to equally share profits and losses from commercialization of product candidates under the agreement.
If we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates.
If we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. To date, we have not experienced significant changes in our estimates of preclinical studies and clinical trial accruals.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, for our personnel in executive, legal, finance and accounting, information technology, human resources, and other administrative functions.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, for our personnel in executive, legal, finance and accounting, information technology, human resources, and other administrative functions.
The deferred revenue is expected to be recognized over the research and development period of the programs through the completion of the initial Phase 2 clinical trials for specified indications for latozinemab and AL101. Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses. We record research and development expenses as incurred.
The balance of deferred revenue was $171.2 million as of December 31, 2025, related to the GSK Agreement. The deferred revenue is expected to be recognized over the research and development period of the programs through the completion of the initial Phase 2 clinical trials for specified indications for latozinemab and nivisnebart.
We reduced our workforce to better align our resources with our current strategic priorities and maintain our expectations with respect to our ability to fund our operations. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We may also choose to seek additional financing opportunistically.
Year Ended December 31, Dollar 2024 2023 Change (In thousands) Direct research and development expenses Latozinemab $ 13,909 $ 14,511 $ (602 ) AL101 4,656 4,403 253 AL002 50,222 51,490 (1,268 ) Other programs 16,908 21,096 (4,188 ) Indirect research and development expenses Personnel related (including stock-based compensation) 75,909 76,956 (1,047 ) Facilities and other unallocated research and development expenses 24,336 23,659 677 Total research and development expenses $ 185,940 $ 192,115 $ (6,175 ) General and Administrative Expenses General and administrative expenses were $59.6 million for the year ended December 31, 2024, compared to $56.7 million for the year ended December 31, 2023.
Year Ended December 31, Dollar 2025 2024 Change (In thousands) Direct research and development expenses Latozinemab $ 14,824 $ 13,909 $ 915 Nivisnebart 6,418 4,656 1,762 AL002 6,429 50,222 (43,793 ) Other programs 20,204 16,908 3,296 Indirect research and development expenses Personnel related (including stock-based compensation) 52,256 75,909 (23,653 ) Facilities and other unallocated research and development expenses 22,934 24,336 (1,402 ) Total research and development expenses $ 123,065 $ 185,940 $ (62,875 ) General and Administrative Expenses General and administrative expenses were $54.0 million for the year ended December 31, 2025, compared to $59.6 million for the year ended December 31, 2024.
Outside of the United States, GSK will be responsible for commercialization of latozinemab and AL101 for all indications, and we will be eligible for double-digit tiered royalties. Under the terms of the AbbVie Agreement, we received upfront payments.
Outside of the United States, GSK agreed to responsible for commercialization of latozinemab and nivisnebart for all indications, and we will be eligible for double-digit tiered royalties. We expect that our revenue for the next several years will be derived primarily from the GSK Agreement.
Under the terms of the GSK Agreement, we received $700 million in upfront payments, of which $500 million was received in August 2021 and $200 million was received in January 2022. In addition, we will be eligible to receive up to an additional $1.5 billion in clinical development, regulatory, and commercial launch-related milestone payments for latozinemab and AL101.
Under the terms of the GSK Agreement, we received $700 million in upfront payments, of which $500 million was received in August 2021 and $200 million was received in January 2022.
Comparison of the Years Ended December 31, 2024 and 2023 Year Ended December 31, Dollar 2024 2023 Change (In thousands) Collaboration revenue $ 100,558 $ 97,062 $ 3,496 Operating expenses: Research and development 185,940 192,115 (6,175 ) General and administrative 59,615 56,687 2,928 Total operating expenses 245,555 248,802 (3,247 ) Loss from operations (144,997 ) (151,740 ) 6,743 Other income, net 26,076 26,561 (485 ) Loss before income taxes (118,921 ) (125,179 ) 6,258 Income tax expense 128 5,212 (5,084 ) Net loss $ (119,049 ) $ (130,391 ) $ 11,342 Revenue Collaboration revenue was $100.6 million for the year ended December 31, 2024, compared to $97.1 million for the year ended December 31, 2023.
Comparison of the Years Ended December 31, 2025 and 2024 Year Ended December 31, Dollar 2025 2024 Change (In thousands) Collaboration revenue $ 21,045 $ 100,558 $ (79,513 ) Operating expenses: Research and development 123,065 185,940 (62,875 ) General and administrative 53,987 59,615 (5,628 ) Total operating expenses 177,052 245,555 (68,503 ) Loss from operations (156,007 ) (144,997 ) (11,010 ) Other income, net 13,246 26,076 (12,830 ) Loss before income taxes (142,761 ) (118,921 ) (23,840 ) Income tax expense 168 128 40 Net loss $ (142,929 ) $ (119,049 ) $ (23,880 ) Revenue Collaboration revenue was $21.0 million for the year ended December 31, 2025, compared to $100.6 million for the year ended December 31, 2024.
Income Tax Expense Income tax expense was $0.1 million for the year ended December 31, 2024, compared to $5.2 million for the year ended December 31, 2023. The decrease was due to the full recognition of GSK revenue for tax purposes in 2023.
The decrease of $5.6 million was mainly due to a decrease in personnel related costs as a result of the reductions in force. Other Income, Net Other income, net was $13.2 million for the year ended December 31, 2025, compared to $26.1 million for the year ended December 31, 2024.
For the year ended December 31, 2023, cash provided by financing activities of $2.6 million was primarily from the exercise of options to purchase common stock and the issuance of stock from the 2019 Employee Stock Purchase Plan. 109 For the year ended December 31, 2022, cash provided by financing activities of $4.5 million was primarily from the exercise of options to purchase common stock.
Financing Activities For the year ended December 31, 2025, cash provided by financing activities of $20.2 million was primarily from the proceeds from the sale of securities pursuant to the sales agreement with TD Securities.
The increase of $3.5 million was mainly due to a $15.9 million increase in revenue recognized for the AL002 program and a $9.8 million increase in revenue recognized for the latozinemab programs, offset by a $22.2 million decrease in revenue recognized for the AL101 programs.
The decrease of $62.8 million was mainly due to a decrease in research and development expenses for the AL002 program as well as a decrease in personnel related costs as a result of the reductions in force.
Removed
Our robust portfolio of therapies is focused on counteracting the devastating progression of neurodegenerative diseases, particularly in areas of high unmet need where therapeutic options are limited.
Added
Our work is informed by advances in disease biology, including the roles of misfolded or deficient proteins, lysosomal dysfunction, and immune and neuronal pathway disruption. Our objective is to develop product candidates that address disease through targeted mechanisms, such as removing pathogenic proteins, replacing deficient proteins, and restoring normal cellular function.
Removed
We are at the forefront of a scientific and clinical revolution, committed to understanding the complex mechanisms that drive neurodegenerative diseases, including the roles of toxic misfolded proteins, deficient proteins, and lysosomal, immune system, and neuronal dysfunction. We aim to develop product candidates that remove toxic proteins, replace critical deficient proteins, and restore immune and nerve cells to normal function.
Added
We continue to refine and expand this platform to enable effective brain delivery at clinically practical doses of antibodies, enzymes, and siRNA therapeutics.
Removed
We are advancing ABC, our proprietary, versatile blood-brain barrier (BBB) technology platform and selectively applying it within our portfolio. ABC aims to enhance the delivery of therapeutics, achieve deeper brain penetration and efficacy at lower doses, and ultimately improve patient outcomes while reducing costs.
Added
In parallel, we are investing in biomarkers and biomarker assays to guide patient selection, demonstrate target and pathway 94 engagement, and assess biological impact in the clinic, with the goal of improving development efficiency and the likelihood of technical success.
Removed
With a singular focus on transforming brain health, our research and drug discovery engine enables us to identify targets and develop a broad portfolio of product candidates validated by human genetics.
Added
Our portfolio includes nivisnebart (formerly AL101/GSK4527226), an investigational PGRN-elevating antibody that has completed enrollment in a placebo-controlled, double-blinded Phase 2 study in early Alzheimer’s disease under our July 2021 Collaboration and License Agreement (GSK Agreement) with Glaxo Wellcome UK Limited, a subsidiary of GlaxoSmithKline plc (GSK).
Removed
These candidates, including those utilizing ABC technology, are designed to cross the BBB in sufficient quantity and potency to enable efficacious delivery to the brain and engage the intended targets.
Added
In addition, our wholly owned programs include lead candidates in preclinical development for a brain-penetrant anti-amyloid beta antibody for Alzheimer’s disease (AD) and a brain-penetrant GCase enzyme replacement therapy for Parkinson’s disease (PD). We are also advancing brain-penetrant siRNA programs targeting tau for Alzheimer’s disease, α-synuclein for Parkinson’s disease, and NLRP3, with potential applications across multiple neurodegenerative conditions.
Removed
We seek to identify and develop biomarkers and biomarker assays that can accurately identify signs of a disease or condition, assist us in selecting the right patient population, demonstrate target and pathway engagement, and measure the impact on disease progression of our product candidates. We believe this may improve the probability of technical success over shorter development timelines.
Added
On October 21, 2025, we initiated a reduce in force that impacted approximately 47% our workforce in order to align resources with the Company’s strategic priorities following the results of the Phase 3 INFRONT-3 clinical trial evaluating the safety and efficacy of latozinemab in individuals with frontotemporal dementia due to a progranulin gene mutation (FTD- GRN ).
Removed
Our clinical development portfolio includes latozinemab (AL001) and AL101/GSK4527226, while our preclinical and research pipeline features several candidates, including ADP037-ABC, ADP050-ABC, ADP056, and ADP063-ABC/ADP064-ABC.
Added
In addition, we may be eligible to receive up to an additional $1.5 billion in clinical development, regulatory, and commercial launch-related milestone payments, subject to successful advancement and commercialization of product candidates in multiple indications under the agreement. Alector and GSK are conducting development jointly.
Removed
Under the terms of the AbbVie Amendment signed in February 2023, the Company received a $17.8 million milestone payment in March 2023 for the dosing of the first patient in the LTE trial and $12.5 million payment in the second half of 2023 for the enrollment of additional patients.
Added
Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses. We record research and development expenses as incurred.
Removed
In January 2025, AbbVie decided to terminate the TREM2 collaboration program, which resulted in termination of the AbbVie Agreement. 104 We expect that our revenue for the next several years will be derived primarily from the GSK Agreement. The balance of deferred revenue was $195.8 million as of December 31, 2024, related to the GSK Agreement.
Added
We expect our research and development expenses relating to latozinemab and AL002 to decrease in the foreseeable future as a result of the discontinuation and wind-down of clinical trials for latozinemab and AL002.
Removed
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, and incur expenses associated with hiring additional personnel to support our research and development efforts.
Added
However, we continue to invest in research and development activities related to programs in our research and preclinical pipeline and to the advancement of those programs into clinical trials.
Removed
A discussion of our results of operations for the comparison of the years ended December 31, 2023 and 2022 can be found on page 103 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 27, 2024.
Added
The decrease of $79.6 million in revenue was primarily due to the satisfaction of the performance obligations associated with the AL002 program and the latozinemab FTD- C9orf72 Phase 2 trial in the fourth quarter of 2024, resulting in lower revenue recognized in 2025.
Removed
The decrease of $6.2 million was mainly due to the Company’s strategy to prioritize selected programs.
Added
As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $256.0 million, which we anticipate provides runway at least through 2027. We reduced our workforce to better align our resources with 98 our current strategic priorities and maintain our expectations with respect to our ability to fund our operations.
Removed
The increase of $2.9 million was mainly due to the impairment of the right-of-use asset and the leasehold improvements as we approved a plan to transition operations from our laboratory and office space in Newark, California to our South San Francisco headquarters.
Added
As of December 31, 2025, we have issued 7,110,162 shares and received approximately $20.0 million in net proceeds from the sale of securities pursuant to the Sales Agreement. On January 17, 2024, we entered into an underwriting agreement with Cantor Fitzgerald & Co.
Removed
In addition, we expect to incur additional costs associated with operating as a public company. 107 As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $413.4 million, which we anticipate provides runway through 2026.
Added
If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.
Removed
This was due to the net loss of $133.3 million offset by an increase in deferred revenue of $66.4 million from the $200 million upfront payment received less revenue recognized. In addition, we had non-cash charges of $46.1 million for stock-based compensation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDue to the generally short-term maturities of our cash equivalents and marketable securities, and the low risk profile of our marketable securities, an immediate 100 basis point increase or decrease in interest rates would cause a change in fair value of approximately $1.8 million as of December 31, 2024.
Biggest changeAn immediate 100 basis point increase or decrease in interest rates would not have a material effect on the fair value of our cash, cash equivalents and marketable securities. 101 Foreign Currency Risk Our expenses are generally denominated in U.S. dollars.
To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not had a formal hedging program with respect to foreign currency. A 10% increase or decrease in current exchange rates would not have a material effect on our financial results. 112
To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not had a formal hedging program with respect to foreign currency. A 10% increase or decrease in current exchange rates would not have a material effect on our financial results. 102
Removed
We had cash, cash equivalents, and marketable securities of $413.4 million as of December 31, 2024, which consisted primarily of bank deposits, money market funds, and government marketable securities. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations in interest income have not been significant for us.
Removed
We deposit cash and cash equivalents with high credit quality financial institutions to minimize risk with respect to any amounts in excess of insurance limitations. Cash and cash equivalents held at these deposit accounts 111 are currently insured by the Federal Deposit Insurance Corporation (FDIC) up to a maximum of $250,000.
Removed
As of December 31, 2024, approximately $1.1 million exceeded the FDIC limit, and the significant majority of the Company’s operating cash is held at JPMorgan Chase & Co. Foreign Currency Risk Our expenses are generally denominated in U.S. dollars.

Other ALEC 10-K year-over-year comparisons