Alto Neuroscience to sell 3.832M shares at $5.91 in private placement

Alto Neuroscience (ANRO) announced that it has entered into a securities purchase agreement with institutional and accredited investors to sell securities in a private placement financing for gross proceeds of approximately $50M, before deducting offering expenses. The financing was led by Perceptive Advisors, with participation by new and existing institutional investors, including Commodore Capital, Vestal Point Capital, Vivo Capital, and a large biotech dedicated investor. Alto intends to use the proceeds from the PIPE to accelerate the development of ALTO-207, a fixed-dose combination of pramipexole and ondansetron, following a successful FDA meeting regarding the development path of the program, as well as for working capital and general corporate purposes. Alto expects to initiate a Phase 2b study of ALTO-207 in treatment resistant depression by mid-2026, which has the potential to be a pivotal study. With the funding from the PIPE, the company now also expects to initiate a Phase 3 study of ALTO-207 in TRD patients by early 2027. In the PIPE, Alto is selling an aggregate of 3,832,263 shares of its common stock at a price of $5.914 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 4,622,251 shares of common stock at a purchase price of $5.9139 per pre-funded warrant. Each pre-funded warrant has an exercise price of $0.0001 per share of common stock, will be immediately exercisable, subject to certain conditions set forth in each pre-funded warrant, and will not expire. The PIPE is expected to close on October 21, subject to customary closing conditions. The financing was priced at-the-market under NYSE rules. Cooley LLP served as counsel to Alto for this transaction.