Alto Neuroscience, a clinical-stage biopharmaceutical company, is at the forefront of redefining the way we approach psychiatric disorders. With a mission to leverage neurobiology and data analytics, Alto is developing a pipeline of innovative product candidates that target specific patient populations characterized by distinct biomarkers.
Company Overview
Founded in 2019, Alto has quickly established itself as a leader in the field of precision psychiatry. The company's approach is rooted in the belief that by identifying and targeting the underlying neurobiological drivers of psychiatric conditions, they can deliver more effective and personalized treatments. This strategy sets Alto apart from traditional approaches that often rely on one-size-fits-all pharmacological interventions.
Operations and Funding
Since its inception, Alto has been focused on the research and development of its product candidates by conducting clinical trials and preclinical studies, building its Precision Psychiatry Platform, and recruiting management and technical staff to support these operations. The company has funded its operations primarily through the aggregate net proceeds of approximately $275.6 million from equity financings, including its initial public offering, and pre-IPO sales of its convertible preferred stock, as well as borrowings under a loan and security agreement. It's worth noting that Alto has not generated any revenue from product sales and has incurred recurring losses since its inception, with net losses of $9.1 million and $25.1 million for the three and nine months ended September 30, 2023, respectively.
Product Portfolio
Alto's portfolio currently consists of five clinical-stage assets, each targeting major depressive disorder (MDD), bipolar depression, schizophrenia, and other neuropsychiatric indications. The company's lead program, ALTO-100, recently completed a Phase 2b trial in MDD, although the study did not meet its primary endpoint. However, the data revealed a clinically meaningful effect in a pre-specified secondary analysis of the adjunctive treatment population, providing valuable insights and a path forward.
ALTO-300 is currently being evaluated in a 200-patient Phase 2b trial for MDD characterized by an EEG biomarker, with topline data expected in the first half of 2025. ALTO-101, a novel PDE4 inhibitor for patients with cognitive impairment associated with schizophrenia, is in a Phase 2 proof-of-concept trial with topline data expected in the second half of 2025. ALTO-203, a novel histamine H3 receptor inverse agonist, is in a Phase 2 proof-of-concept trial for MDD patients with higher levels of anhedonia, with topline data expected in the first half of 2025. Additionally, Alto plans to develop ALTO-202, a novel, oral N-methyl-D-aspartate (NMDA) receptor antagonist, for the treatment of patients with MDD.
Precision Psychiatry Platform
Underpinning Alto's approach is its proprietary Precision Psychiatry Platform, which leverages advanced data analytics and machine learning to identify patient-specific biomarkers. This platform has enabled the company to design its clinical trials with a focus on biomarker-defined patient populations, increasing the likelihood of clinical success.
Pipeline Development
In addition to ALTO-100, Alto's pipeline includes ALTO-300, a compound being evaluated in a Phase 2b trial for MDD, ALTO-101, a novel treatment for cognitive impairment associated with schizophrenia in a Phase 2 proof-of-concept study, and ALTO-203, a histamine H3 receptor inverse agonist in a Phase 2 trial for MDD with higher levels of anhedonia.
Strategic Collaborations and Licensing
Alto's commitment to innovation is further exemplified by its strategic collaborations and licensing agreements. In July 2024, the company entered into a convertible loan agreement with The Wellcome Trust Limited, providing up to $11.7 million in funding to support the development of ALTO-100 in bipolar depression. Additionally, Alto has expanded its intellectual property portfolio through various licensing agreements with third parties, such as Stanford University, Sanofi, and MedRx, to acquire rights to technologies and product candidates relevant to its platform and development programs.
Financials and Liquidity
Financially, Alto is well-positioned to advance its pipeline. As of September 30, 2024, the company had $182.2 million in cash, cash equivalents, and restricted cash, which is expected to fund planned operations into 2027 and through at least four additional clinical study readouts. For the most recent quarter (Q3 2024), Alto reported no revenue, a net loss of $16,783,000, an operating cash flow of -$11,726,000, and a free cash flow of -$12,731,000. The company's current ratio and quick ratio both stand at 13.09, indicating strong short-term liquidity.
Alto's debt/equity ratio as of December 31, 2023, was approximately -0.14, with $10 million in total debt and negative $71.7 million in stockholders' equity. The company has a $35 million loan and security agreement with K2 HealthVentures, of which $10 million was drawn as of the most recent quarter. Additionally, Alto has a $11.7 million convertible loan agreement with Wellcome Trust, of which $1.3 million was drawn as of the most recent quarter.
Future Outlook
Despite the recent setback with the ALTO-100 MDD trial, Alto remains committed to its mission and confident in the potential of its Precision Psychiatry Platform. The company's upcoming catalysts include topline data from the Phase 2b trial of ALTO-300 in MDD and the Phase 2a trial of ALTO-203 in MDD patients with anhedonia, both expected in the first half of 2025.
In a landscape where traditional approaches to psychiatric disorders have often fallen short, Alto Neuroscience is poised to redefine the standard of care. By harnessing the power of precision medicine and data-driven insights, the company aims to unlock new avenues for effectively treating some of the most challenging neuropsychiatric conditions. As Alto continues to advance its pipeline and leverage its Precision Psychiatry Platform, it remains focused on delivering innovative solutions to patients in need, while navigating the challenges of clinical development in the complex field of neuropsychiatry.