Alto Neuroscience Shares Plunge 60% After Depression Drug ALTO-100 Fails to Beat Placebo in Phase 2b Trial

Only 9 Months After IPO, Alto Neuroscience's Stock Gets First Major Blow.

Alto is one of the first biopharmaceutical companies to go public in 2024.(Reference Reading:Spring Has Arrived? A Summary of Biopharmaceutical IPOs on the US Stock Market in the First Half of 2024）At that time, Alto Neuroscience, which owned the precision psychiatry platform and ALTO-100, the main asset developed by the platform, touted its platform as a way to develop highly personalized and effective psychiatric therapies, andUsing this as a gimmick, the company's stock began trading at $22 per share on February 2 and raised $128.6 million in early February.。

The more glorious it was at the time, the more embarrassing it is now. Recently, in the Phase 2b trial announced by Alto Neuroscience,Compared with placebo, ALTO-100 therapy failed to improve symptoms of severe depression, causing the biotech company's stock price to plummet 60% to $5.70 in after-hours trading on Tuesday night, just hours after closing at $14.53.

In a Phase 2b trial study surveying 301 adults in the United States, Alto Neuroscience used memory-based biomarkers to group patients, who were then randomly assigned to treatment and placebo groups. The primary endpoint was the patients' scores on the standard Montgomery-Asberg Depression Rating Scale (MADRS) at the end of the six-week treatment period compared to the placebo group.Compared with placebo, patients in the biomarker-defined group did not show statistically significant improvement in depressive symptoms. The treatment also did not stimulate improvement in other pre-specified key secondary endpoints, although safety and tolerability were as expected.Alto Neuroscience will conduct a comprehensive analysis of the dataset to determine the next steps.

Alto Neuroscience's ALTO-100 is currently in a Phase 2b trial for patients with bipolar disorder.

Of course, from the analyst's perspective, it was acknowledged that this experimental study was well-conducted, and the placebo performed consistently with historical data. However, the results of ALTO-100 missed the primary endpoint, fell short of expectations, and were even considered "not successful at all."

"While today's data points have drawn more scrutiny to the biomarker stratification approach, historically, placebo-controlled depression studies have always been high-risk, and this one seems no exception," said Alto Neuroscience.

However, from the perspective of the losing party, the press release provided fewer details on the data but was quite firm, as the trial had failed. Nevertheless, there is at least one praiseworthy aspect: Alto Neuroscience did not attempt to salvage the situation through any data mining or excessive post-hoc analysis.Overall, the attitude is still very positive, and the sincerity score can be high.

But the problems brought by the trial failure may not just be a one-time stock price drop; the poor performance of ALTO-100 will undoubtedly make investors question Alto Neuroscience's precision psychiatry treatment methods.The company is also developing ALTO-300, a drug for the treatment of depression, with clinical trial results expected to be released in the first quarter of 2025. The drug, also known as agomelatine, has already been approved for the treatment of depression in Europe and Australia.

ALTO-300 has completed a Phase 2a study, validating the EEG-based biomarkers to be used. Analysts stated,Given the existing approvals for this asset in other parts of the world, its risk is slightly lower than that of ALTO-100.

Etkin, CEO of Alto Neuroscience, said in a press release that despite the failure of this trial,But Alto Neuroscience still has a large amount of cash available for operations. As of June 30, the company reported that its cash had increased to $193.6 million, and with upcoming multiple readings, it is confident in extending its cash runway to 2027.In addition to the upcoming release of ALTO-300 readings next year, the readings from ALTO-203 in the field of depression will also be announced.

But in the field of psychiatry, depression itself is a difficult mountain to climb, and Sage Therapeutics is a recent example. Although the company received FDA approval for Zurzuvae in treating postpartum depression, the drug was not approved for depression because the FDA found that the company failed to provide "substantial evidence of efficacy" to support the approval.

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