Cautious Hold on Alector Amid Strategic Shift and Long-term Focus

TD Cowen analyst Yaron Werber has maintained their neutral stance on ALEC stock, giving a Hold rating on November 5.

Yaron Werber has given his Hold rating due to a combination of factors surrounding Alector’s current strategic position and future prospects. The company’s recent Q3 report highlights a pivot towards its preclinical Alector Brain Carrier (ABC) platform, following the failure of the Phase 3 INFRONT-3 trial, which led to the discontinuation of latozinemab. This shift indicates a focus on long-term projects, with significant clinical data expected only in the coming years, such as the IND filing for AL137 in 2026 and AL050 in 2027.
Despite the potential of the ABC platform, the lack of immediate catalysts and the uncertainty surrounding the PGRN mechanism after the INFRONT-3 miss contribute to a cautious outlook. The company’s financials show a runway through 2027 with $291 million in cash, but the 47% workforce reduction and lowered operating expense estimates reflect a narrowing of the pipeline. Given these circumstances, Werber prefers a wait-and-see approach, opting to remain on the sidelines until further validation of the company’s strategies and clinical data emerges.

In another report released on November 5, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $1.50 price target.

Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ALEC in relation to earlier this year.