ALTO-100

Alto Neuroscience’s stock tumbled 60% on Wednesday morning, the day after the company said a mid-stage trial for its oral small molecule failed to improve symptoms of major depressive disorder. In the Phase 2b trial, which the company described as a first-of-its-kind precision biomarker-based study in psychiatry, ALTO-100 didn’t show improvement over placebo in a change from baseline using the Montgomery-Åsberg Depression Rating Scale (MADRS) in 301 patients at the end of the six-week treatment period. The trial also didn’t hit “key” secondary endpoints that included efficacy versus placebo in MDD as measured using the Clinician Global Impression Scale-severity — a tool used to measure the severity of illness — and remission rates based on MADRS. Alto said the safety and tolerability profile was “favorable” and consistent with previous data. In a Phase 2a study last year, ALTO-100 hit the primary endpoint, with the treatment showing a greater improvement in both the monotherapy and adjunctive treatment groups. “We will move quickly to evaluate the full data set to better understand these findings and incorporate learnings from this large data set across our platform,” Alto CEO Amit Etkin said in a statement , adding that the company expects “our strong cash balance to support us through multiple near-term clinical milestones across our pipeline.” Alto $ANRO went public earlier this year, bringing in $129 million in February, above its original plans to raise $89 million. In its latest financial filing in August, the Eli Lilly-backed startup said it expects its existing cash to provide runway into 2027. ALTO-100 is still being investigated as an adjunctive treatment in a Phase 2b study in bipolar depression. Alto also has several upcoming data readouts for other assets that are expected next year. This includes ALTO-203, an H3 receptor inverse agonist, and ALTO-300 — both in major depressive disorder. In a note on Wednesday, TD Cowen analysts said they were disappointed by the newest slate of data but still “optimistic” about the drug. “We suspect the enrichment signal may have been seen in the adjunct MDD population,” TD Cowen’s Ritu Baral wrote. “Without additional detail on the Ph2b data, we hesitate to extend read-through to the rest of ANRO’s pipeline of agents paired with distinct biomarkers.” Others on Wall Street were more concerned. Jefferies analysts told investors they think the “study’s failure is driven by a lack of drug effect rather than [management] execution error” and that Tuesday’s data “raises questions around ANRO’s overall biomarker approach to CNS/psychiatry.”

Alto Neuroscience, a young biotechnology company developing medicines for the brain, lost much of its value Wednesday as negative results from a clinical trial raised doubts about the future of its most advanced research program.That program revolves around an experimental drug code-named ALTO-100, which Alto is testing against different kinds of depression. The new results, from a trial with just over 300 participants, show the drug was not significantly better than a placebo at improving symptoms of the most common type, known as major depression.Alto plans to analyze all the data from the study to determine the most appropriate next steps, if any, for ALTO-100 in major depressive disorder. Researchers are also evaluating the drug in mid-stage studies focused on post-traumatic stress disorder and bipolar depression, with high-level results in that latter indication expected in 2026.While the latest findings didnt align with the more positive data seen in earlier trials, we believe our approach to collecting and stratifying based on biomarkers represents an innovative approach to developing neuropsychiatric drugs, said Adam Savitz, Altos chief medical officer, in a statement Tuesday evening.Investors, though, may have lost some faith in Alto. The biotechs share price had sunk by two-thirds by Wednesday morning, to trade below $5.Founded in 2019 by current CEO Amit Etkin, Alto is attempting to make more precise brain drugs. Its a mission shared by other freshly launched startups like Nido Biosciences and Rapport Therapeutics, and one that has received sizable investments over the past few years. Neumora Therapeutics, for instance, raised $250 million late last summer through an initial public offering. And before that, it attracted more than $600 million from a lengthy list of investors that included Amgen and Arch Venture Partners.At Alto, the company aims to identify biological markers that can be used to design better brain drugs. One such biomarker, a verbal memory test, was used to enroll in the major depression study only participants with poor cognition who were most likely to respond to ALTO-100.To analysts, the studys failure, while disappointing, isnt a total indictment of Altos method of precision psychiatry drugmaking. Myles Minter, from the investment firm William Blair, wrote in a note to clients that the setback will surely cast investor doubt. Even so, we do not believe a single failure of the approach is indicative that the biomarker enrichment strategy is invalid.Ultimately our view is that the idea behind Alto Neuroscience still has a lot of merit, wrote Stifel analyst Paul Matties in his own note, adding that the companys other shots-on-goal for fundamentally different assets should not be written off.To be clear, we think other programs here are higher-risk, Matteis wrote. But from a company concept perspective, we still think what Alto is trying to do is highly logical and the failure of ALTO-100 shouldn't undermine this.Alto says it has enough cash to operate into 2027, by which point it will have data from other important studies, including two that are testing a couple of the companys other drugs. Data from those experiments should come in the first half of next year. The company reported having about $194 million worth of cash and cash equivalents as of June 30.The ALT-100 candidate is meant to enhance a protein that not only triggers the growth of new brain cells, but also regulates how those cells respond to stimulation. Alto thinks this effect could help people with depression, as research indicates that depressive disorders can actually shrink the brain especially parts like the hippocampus, which plays a vital role in learning, mood and memory. '