Alector 2025 Q3 Earnings Narrowed Net Loss of 17.9% Despite 78.8% Revenue Drop

Alector (ALEC) reported fiscal 2025 Q3 earnings on November 6, 2025, with results narrowly beating expectations on EPS and revenue. The company reduced its net loss by 17.9% year-over-year and provided guidance aligned with its current operational trajectory.

Revenue

Collaboration revenue, Alector’s primary income source, plummeted by 78.8% year-over-year to $3.26 million in Q3 2025, significantly lower than the $15.34 million recorded in Q3 2024. The decline stemmed from the completion of performance obligations tied to the AL002 program and the latozinemab FTD-C9orf72 Phase 2 trial in late 2024.

Earnings/Net Income

Alector narrowed its net loss to $34.67 million (or $0.34 per share) in Q3 2025, a 17.9% improvement from the $42.22 million (or $0.43 per share) loss in Q3 2024. The reduction reflects cost-cutting measures, including a 47% workforce reduction and lower R&D expenses. The improved EPS reflects effective cost management, though ongoing losses underscore the need for continued operational efficiency.

Post-Earnings Price Action Review

The strategy of buying Alector shares on revenue raise announcements and holding for 30 days yielded a -26.1% return over three years, despite the company surpassing revenue estimates by 24.19% in its latest quarter. The stock’s performance was influenced by broader market volatility and timing challenges, with the 30-day holding period failing to offset long-term declines. Investors are advised to consider adjusting strategies based on market conditions and the company’s progress on its ABC platform.

CEO Commentary

Arnon Rosenthal, Ph.D., emphasized Alector’s focus on advancing the Alector Brain Carrier (ABC) platform for neurodegenerative therapies, with key candidates AL137 and AL050 progressing toward IND submissions in 2026 and 2027. The CEO highlighted a $291.1 million cash runway through 2027 and robust preclinical data for ABC-enabled programs, including brain penetration and safety.

Guidance

Alector expects 2025 collaboration revenue of $13–18 million, R&D expenses of $130–140 million, and G&A expenses of $55–65 million. The company targets IND submissions for AL137 (2026) and AL050 (2027) and anticipates an interim analysis for the PROGRESS-AD trial in 1H 2026.

Additional News

1. Phase 3 Trial Discontinuation: Alector halted the INFRONT-3 Phase 3 trial for latozinemab after it failed to demonstrate clinical benefit, marking a significant setback.

2. Workforce Reduction: The company announced a 47% workforce reduction to optimize resources, impacting program timelines but reducing quarterly cash burn.

3. Cash Runway Extension: Alector confirmed $291.1 million in cash and investments, sufficient to fund operations through 2027, supported by $20 million in ATM equity raises since September.