Alector, Inc. Q2 FY2023 earnings call

• Alector's key initiatives in the first half of 2023 were highlighted. - Progress in immuno-neurology research was discussed, including ADP027 targeting GPNMD for Parkinson's disease. - Late-stage clinical programs updates: INVOKE-2 Phase II trial for AL002 nearing full enrollment, INFRONT-3 Phase III trial for latozinemab in frontotemporal dementia near complete enrollment, AL002 well-tolerated in Phase I, and key highlights from AAIC presentation on AL002.

In the second quarter of 2023, collaboration revenue was $56.2 million compared to $79.9 million in the same period of 2022. Total research and development expenses were $46.2 million vs $54.5 million in 2022. Total general and administrative expenses were $13.6 million vs $15.8 million in 2022. Net income was $1.4 million or $0.02 per share vs $9.9 million or $0.12 per share in 2022. For 2023, collaboration revenue estimate is between $90 million and $100 million. Total research and development expenses are between $210 million and $220 million. Total general and administrative expenses are between $60 million and $65 million.

• Collaboration revenue estimate increased to $90M-$100M. - Total research and development expenses reduced to $210M-$220M. - Total general and administrative expenses tightened to $60M-$65M. - Plan to complete enrollment in INVOKE-2 Phase II trial in Alzheimer's disease in Q3 2023. - Anticipate completing enrollment in INFRONT-3 Phase III trial in FTD-GRN in Q4 2023.

Q: Could you add additional color behind your GPNMD research program in Parkinson’s disease? And maybe as a follow-up, could this target be used in other neurodegenerative diseases?

A: Sara Kenkare-Mitra explained about ADP027 targeting GPNMD for Parkinson’s disease, its hypothesis, and that it's in early portfolio.

Q: Just double checking timing to data readout for AL001. I think previously you said early ‘25. But with this reestimated primary analysis amplifies and enrollment completing in Q4, I just wanted to double check if there’s any latest updates on timing to data.

A: Marc Grasso and Gary Romano discussed that they anticipate completing enrollment in the pivotal study in Q4 2023, with data readout shortly thereafter.

Q: Just regards to your discussions with the FDA and the European regulatory authorities and kind of the changes that you're announcing with the Phase III trial. And I'm just curious as to whether the topic of looking at biomarkers was specifically discussed in the agency's view around whether you could look at biomarkers as perhaps a surrogate end point to maybe also take a look at efficacy?

A: Gary Romano said they discussed the trial with agencies, it's a biomarker-rich study, primary analysis is for clinical treatment effect but they will look at biomarker data for accelerated approval if needed.

Q: Just share more details just on the blood barrier technology, blood-brain barrier technology that you're advancing. And maybe with a lens on how your approach might differ versus others, including neighbors in your backyard and others on the East Coast.

A: Arnon Rosenthal said they have a versatile blood barrier technology that can be tailored to specific cargo, unique for its versatility.

Q: You guys seem cautious about calling your effects for TREM2 REA. Is it somehow different? Or are you just being cautious because it's new. And also, are you taking beta scans in this trial? I think you said you were going to. Is that something we will see? Did you take baseline scans?

A: Gary Romano said they're being cautious as it's a different mechanism, but the trial includes A-beta PET and other scans, and they do have baseline scans.

Q: Just on the INFRONT-3 analysis here, just on a blinded basis, are you seeing the same variability on a symptomatic patient population as what you saw or what they saw in GENFI2, specifically looking at the analysis that you did with the [indiscernible] INFRONT-2 patient population versus the 10 patients you picked from GENFI2?

A: Gary Romano and others discussed variability in the studies, with focus on symptomatic populations and how variance was less than originally anticipated.