Alector launches $208m fundraiser for Alzheimer’s R&D with AbbVie

Alector has launched an $208 million stock market offering as it ramps up clinical trials with AbbVie into a drug that aims to tackle Alzheimer’s by modifying the brain’s immune system.

The California biotech was the first biotech IPO to get off the ground after last year’s government shutdown, and it has started 2020 in similarly bullish fashion.

While the first IPO raise $176 million with shares priced at $19 each, the latest offering is upsized at 8,350,000 shares of common stock at $25 each.

Alector is hoping to use immunotherapy to treat neurodegenerative diseases such as Alzheimer’s – an approach that has produced sometimes stunning results in cancer but is not yet proven in neurology.

Alector began the latest offering just as the phase 1b portion of its INTERCEPT clinical study of its Alzheimer’s drug AL003 began recruiting its first patients.

The trial study will assess the safety of several doses of AL003 in approximately 12 patients with mild to moderate Alzheimer’s disease.

Its main goal is to measure safety and tolerability, and will also assess how the drug moves around the body, and engages with targets based on biomarkers in plasma and cerebrospinal fluid.

AL003 targets a genetic risk factor in Alzheimer’s known as sialic acid binding Ig-like lectin 3 (SIGLEC 3).

SIGLEC 3 is an inhibitory receptor expressed primarily on cells of myeloid lineage including microglia, which constitute the brain’s immune system.

AL003 is a monoclonal antibody that works by blocking the function of SIGLEC 3 to increase the activity of microglia and that is intended to treat Alzheimer’s disease.

Under an agreement signed in 2017 AbbVie has an exclusive option to global development and marketing for AL003 and Alector’s TREM2 targeting monoclonal antibody, AL002.

Alector will design and conduct trials up to phase 2, with AbbVie taking responsibility for some development activities should it exercise its option.

AbbVie paid $205 million up front in cash and $20m in equity, and if the big pharma takes its option for either or both drugs Alector could receive additional option exercise and milestone payments of up to $986 million.

Alector and AbbVie will share development costs and split global profits equally after marketing approval.

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