Alto Neuroscience, Inc. (ANRO) experienced a major setback on Tuesday when its Phase 2b clinical trial for ALTO-100, a potential treatment for major depressive disorder (MDD), failed to meet its primary endpoint. The study, designed to evaluate the drug’s efficacy in a biomarker-defined patient group, found no statistically significant improvement in depressive symptoms compared to placebo. This news sent shockwaves through the market, with ANRO stock plummeting a staggering 67.70% to $4.70 by Wednesday.
While the results of the Phase 2b trial are disappointing, Alto Neuroscience remains committed to its innovative approach to treating mental health disorders. The company’s Precision Psychiatry Platform leverages biomarkers to identify specific patient populations who may benefit most from their treatments. Despite the setback with ALTO-100, Alto believes that its biomarker enrichment strategy is still a valid approach.
The company is currently evaluating ALTO-100 as an adjunctive treatment in a Phase 2b study for bipolar depression. Additionally, it has other promising drug candidates in its pipeline, including ALTO-203 and ALTO-300, both of which are expected to have Phase 2b readouts in the first half of 2025. These upcoming trials will be crucial for Alto’s future, as investors closely watch to see if the company can achieve success with its other potential treatments.
Analysts at William Blair, while acknowledging the setback with ALTO-100, remain optimistic about Alto’s long-term prospects. They maintain an Outperform rating on the stock, emphasizing that the company has a strong cash position and is well-positioned to continue its research and development efforts. They are particularly interested in the results of the upcoming ALTO-300 Phase 2b trial in MDD, which could provide further insights into the potential of Alto’s Precision Psychiatry Platform.
The failure of the ALTO-100 Phase 2b trial is a significant setback for Alto Neuroscience, but it is not necessarily a death knell for the company. The company has a strong pipeline of potential treatments, and its commitment to biomarker-driven drug development remains a key differentiator. With the upcoming readouts for ALTO-203 and ALTO-300, the next few months will be critical for Alto as it seeks to regain investor confidence and demonstrate the promise of its innovative approach to treating mental health disorders.