Alector Inc. has filed for an initial public offering seeking to raise up to $150 million, although that figure is a placeholder and could likely change. According to its preliminary prospectus on the U.S. Securities and Exchange Commission website, the company plans to list on Nasdaq Global Select Market under the symbol “ALEC.”
Alector is involved in clinical trials for Alzheimer’s and frontotemporal dementia. Founders of the company hope to develop drugs that will address the failure of the human immune system to clear plaque from the brain, which they believe is the root cause of dementia. The San Francisco-based company is also aiming to develop therapies that can be used to counter other neurodegenerative diseases.
In November, Alector started an early-stage clinical trial of a drug (AL-002) that is targeted at Alzheimer’s disease. The company also launched a Phase 1 study in patients that have a mutation believed to trigger frontotemporal dementia.
Alector currently generates its revenue from a collaboration agreement with AbbVie, Inc. and a government grant. The company has never posted profit since it was founded five years ago. As of September 30, 2018, it had a net loss of $34.9 million on revenue of $18.5 million. In the same period of 2017, net loss totaled to $22.7 million on revenue of $676,000.
Alector has also warned that it does not “expect to generate revenue from product sales for several years, if at all,” according to its filing with the SEC. As such, people planning to put their money in the company should brace for higher operating losses for the foreseeable future.
However, Alector enjoys the backing of several large pharmaceutical companies including AbbVie Inc., Merck & Co., Amgen Inc., Polaris Partners, MRL Ventures, and OrbiMed Advisors. Polaris Partners owns 22% pre-IPO shares of Alector, while OrbiMed Advisors and MRL Ventures Fund own 21% and 6%, respectively.
Another notable investor that has an interest in Alector is Dementia Discovery Fund, which was established with backing from several of the largest biopharmaceutical companies in the world and the United Kingdom government. Alector has named Bank of America Merrill Lynch, Barclays, Morgan Stanley and Cowen to underwrite the deal.
Alector led by Founder and Chief Executive Officer Arnon Rosenthal. Rosenthal is also the co-founder of Rinat Neuroscience, which developed novel medicines for neuroendocrine, neurodegenerative, and pain disorders. Rinat Neuroscience was later acquired by Pfizer Inc. in 2006. Mr. Rosenthal was previously working at Genentech Inc. before starting Alector Inc, which currently employs 100 people.