Alector 2025 Q3 Earnings EPS Narrows 20.9% as Revenue Misses Estimates

Alector (ALEC) reported fiscal 2025 Q3 results on Nov 6, 2025, with a net loss of $0.34 per share, narrowing its loss by 20.9% year-over-year. The company exceeded Wall Street’s EPS estimates but fell short of revenue projections, as collaboration income dropped 78.8% to $3.26 million. Despite the revenue decline, Alector reduced its net loss by 17.9% to $34.67 million and provided 2025 guidance aligning with its updated operational focus.

Revenue

The total revenue of Alector decreased by 78.8% to $3.26 million in 2025 Q3, down from $15.34 million in 2024 Q3. This sharp decline was driven by the completion of performance obligations tied to its AL002 program and the latozinemab FTD-C9orf72 Phase 2 trial in late 2024. The drop highlights the challenges of sustaining collaboration revenue amid shifting program priorities and reduced trial activity.

Earnings/Net Income

Alector narrowed losses to $0.34 per share in 2025 Q3 from a loss of $0.43 per share in 2024 Q3, reflecting a 20.9% improvement. Meanwhile, the company successfully narrowed its net loss to $-34.67 million in 2025 Q3, reducing losses by 17.9% compared to the $-42.22 million net loss reported in 2024 Q3. The Company has sustained losses for 8 years over the corresponding fiscal quarter, highlighting ongoing financial headwinds. While the reduction in per-share and absolute losses is a positive sign, the persistent net losses underscore the need for continued cost optimization and revenue diversification.

Post-Earnings Price Action Review

The strategy of buying Alector (ALEC) shares on the date of its revenue raise announcement and holding for 30 days resulted in a mixed performance over the past three years. Here’s a backtest analysis: The cumulative return over three years was -45.8%, indicating a significant loss. This reflects the challenging period for Alector, with negative margins and declining revenue growth. Quarterly returns showed volatility, with +33.33% in Q3 2023 (revenue beat), +19.05% in Q1 2024 (EPS beat), and losses of -10.53% in Q2 2024 and -15.15% in Q3 2024 (revenue shortfall). The strategy demonstrated inconsistency, with gains in two quarters but losses in two others. Holding ALEC for 30 days after earnings was beneficial when expectations were exceeded but exposed investors to downside risks during misses. While brief positive returns occurred, the overall loss and volatility suggest this approach may not suit long-term or steady-return-focused investors. A more cautious strategy, factoring in Alector’s strategic initiatives and market conditions, is warranted.

CEO Commentary

Arnon Rosenthal, Ph.D., CEO of Alector, emphasized the company’s focus on its Alector Brain Carrier (ABC) platform, a “key driver of innovation” for delivering therapies to the brain. He highlighted the advancement of AL137 (anti-amyloid beta antibody) and AL050 (GCase enzyme replacement therapy) toward IND-enabling studies, with IND submissions targeted in 2026 and 2027. The CEO noted the ABC platform’s versatility in delivering antibodies, enzymes, and siRNA, citing preclinical data showing robust brain penetration, favorable safety, and good pharmacokinetics. He also reiterated progress on the PROGRESS-AD Phase 2 trial for nivisnebart (AL101), with an independent interim analysis planned for 1H 2026. Despite a 47% workforce reduction, Rosenthal expressed confidence in the $291.1 million cash runway through 2027, enabling continued development of its neurodegenerative disease portfolio.

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 IND submissions for AL137 (2026) and AL050 (2027) and an interim analysis for the PROGRESS-AD trial in 1H 2026. Management confirmed that current cash, cash equivalents, and investments ($291.1 million as of September 30, 2025) will fund operations through 2027. No forward-looking statements beyond these explicit milestones or financial ranges were provided.

Additional News

Recent non-earnings updates include a 47% workforce reduction to streamline operations and a renewed focus on the Alector Brain Carrier (ABC) platform. The company announced IND submissions for AL137 and AL050 in 2026 and 2027, respectively, and plans for an independent interim analysis of the PROGRESS-AD trial in 1H 2026. Alector also secured $20 million in equity raises via ATM offerings in September and October 2025 to bolster its $291.1 million cash runway. These steps aim to enhance operational efficiency while advancing its neurodegenerative disease pipeline.

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