Alto Neuroscience Inc. (ANRO:NYSE) provided an update on some of its clinical programs and its recent private placement, reported Dr. Myles Minter, analyst at William Blair, in an Oct. 20 research note.
About the biotech's prospects, the analyst wrote, "Ultimately, we see a diversified asset pipeline, mixed with a strong cash position through at least four clinical readouts, as increasing the likelihood of eventual clinical win(s) and the room for a several-fold price appreciation from current levels."
Stock Rated Outperform
William Blair reiterated its Outperform rating on the California-based firm, trading at the time of Minter's report at about $11.03 per share, the analyst noted. The financial services firm does not have a price target on Alto.
"Alto is early stage but uniquely positioned in the neuropsychiatry drug development landscape, and we see an attractive risk/reward profile," added Minter.
The life sciences company has 27.1 million shares outstanding, a market cap of $301 million ($301M) and a 52-week range of $2–15 per share.
Two Concurrent Studies
Following a recent U.S. Food and Drug Administration (FDA) meeting, Alto decided to fast track development of ALTO-207 in treatment-resistant depression (TRD) by starting a Phase 3 trial while the Phase 2b study is in progress versus carrying out the two consecutively, Minter reported.
The Phase 2b, already planned before the FDA meeting, is scheduled to start by mid-2026. Alto intends to commence the Phase 3 by early 2027, once it completes preparation work and finalizes the trial protocol with the FDA.
As such, Alto will have two pivotal studies happening at the same time and intends to keep the size and geography of both similar, management told Minter. This concurrent approach will move up filing of a new drug application by more than a year.
Minter pointed out that TRD is "a major market with significant unmet need." To put its size in context, he noted that in this indication, Johnson & Johnson's (JNJ:NYSE) Spravato recently annualized $1.84 billion, and this represented 62% year-over-year growth.
About the Asset
Earlier this year, in June, Alto acquired a portfolio of dopamine agonist combination candidates from private firm Chase Therapeutics, and ALTO-207, a combination of Pramiprexole and Ondansetron, was one of them. Pramipexole was shown in the PAX-D study to be efficacious in TRD, and data Chase generated suggested that combining it with the antiemetic Ondansetron could improve tolerability of the Pramipexole.
"We viewed the ALTO-207 acquisition as intriguing given promising PAX-D clinical trial data, and view the acceleration of the program to Phase 3 as a positive with the asset now in Alto's hands," Minter wrote.
Cashed Up for Program
Minter reported that Alto has runway into 2028, including the additional development activities for ALTO-207, according to management. The company just completed a $50M private placement at about $5.91 per share and as of June 30, 2025, had $148.1M in cash.
"We have updated our model to include the financing, and further updates are pending to include value for ALTO-207," noted Minter.
Positive Compliance Rates
Alto's recently completed blinded pharmacokinetic (PK) analysis of the ongoing Phase 2b study of ALTO-100 in bipolar depression (BPD) showed a 96% compliance rate. This rate is much higher than those generally seen in central nervous system studies. According to management, this is due to optimized trial design and execution and implies strong patient tolerability and treatment engagement. Topline data from this trial are expected in H2/26.
Alto's recent blinded PK analysis of the ongoing proof-of-concept Phase 2 study of ALTO-101 in cognitive impairment associated with schizophrenia (CIAS) showed a 100% compliance rate.
"PK updates from the ALTO-100 and ALTO-101 programs ensuring compliance comes from prior clinical trial learnings and is an incremental positive to management execution here," Minter wrote.
Topline data from ALTO-101 in CIAS now is expected in Q1/26 versus H2/25 previously, reported the analyst. This is because management chose to complete the study in the new year to avoid possible disruptions to in-clinic patch replacements during the holidays.
Precision Psychiatry Approach
In its method of developing psychiatric drugs, Alto employs a biomarker enrichment strategy. Yes, the Phase 2b trial of ALTO-100 in major depressive disorder (MDD) failed to show a statistically significant benefit over placebo as measured with the Montgomery-Asberg Depression Rating Scale, Minter acknowledged but added that one failure does not invalidate the entire approach. Also, he pointed out, compliance was a problem in that trial with a cognitive biomarker.
"We look to the next readout of ALTO-300 in MDD, which leverages electroencephalogram-based biomarkers identified by Alto Scope, combined with an already internationally approved commercial antidepressant (agomelatine)," the analyst wrote.
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