Alector 2025 Q3 Earnings Beats Estimates with 17.9% Narrowed Net Loss

Alector (ALEC) reported fiscal 2025 Q3 earnings on Nov 6, 2025, with a net loss of $0.34 per share, surpassing the Zacks estimate of $0.42. The company’s revenue of $3.26 million exceeded expectations, while its cash reserves of $291.1 million support operations through 2027.

Revenue

Alector’s total revenue declined by 78.8% to $3.26 million in 2025 Q3, compared to $15.34 million in 2024 Q3. The drop stemmed from completed performance obligations tied to prior programs and reduced collaboration revenue.

Earnings/Net Income

The company narrowed its per-share loss to $0.34 (a 20.9% improvement) and reduced its net loss to $34.67 million (-17.9% year-over-year). Despite these improvements, Alector has posted losses for eight consecutive years, underscoring persistent financial challenges.

The EPS improvement reflects cost-cutting measures, but sustained losses highlight structural risks.

Post-Earnings Price Action Review

A strategy of purchasing Alector shares on the earnings announcement date and holding for 30 days yielded a 11.78% cumulative return, albeit with a 12.58% maximum drawdown. The stock surged 20.59% post-earnings but faced a 14.07% pullback in the following 30 days, reflecting market volatility. This approach balances short-term momentum with risk management, offering a viable tactic for earnings-driven investors.

CEO Commentary

CEO Arnon Rosenthal emphasized Alector’s “well-resourced” position, citing the Alector Brain Carrier (ABC) platform as a key innovation driver. He highlighted progress on AL137 (Alzheimer’s) and AL050 (Parkinson’s), targeting IND submissions in 2026 and 2027. A 47% workforce reduction was announced to extend cash runway through 2027.

Guidance

Alector provided 2025 guidance: collaboration revenue of $13–18 million, R&D expenses of $130–140 million, and G&A expenses of $55–65 million. The company expects to fund operations through 2027 without external financing, with key milestones including an interim analysis of the PROGRESS-AD trial (nivisnebart) in 1H 2026.

Additional News

Alector announced a 47% workforce reduction to prioritize high-impact programs and extend cash runway through 2027. The company’s focus on the Alector Brain Carrier (ABC) platform remains central, with AL137 and AL050 advancing toward IND submissions. Collaboration with GSK on nivisnebart (AL101) continues, with an interim analysis planned for 1H 2026. Recent insider selling activity and a distressed Altman Z-Score of -3.32 signal potential liquidity risks. Analysts remain cautious, with a “hold” rating and a median price target of $1.50, reflecting mixed sentiment.

Guidance

Alector’s 2025 guidance underscores its reliance on collaboration revenue and cost discipline. The company’s cash runway through 2027 aligns with key IND submissions but faces risks from declining collaboration revenue and operational constraints. Investors should monitor quarterly cash burn versus guidance ranges and the PROGRESS-AD interim analysis in 2026.