Alector raises $133M in 5th VC round to push neuro-immunology drugs into Alzheimer’s trials

Role of hundred dollar bills on other bills
Why stay private for so long? With this much investor interest, a round like this keeps Alector's options open, CBO Sabah Oney says. (gawriloff/iStock/Getty Images Plus)

Previous Fierce 15 winner Alector has raised $133 million through a fifth round of venture capital financing, with plans to move at least three of its immune-modulating drugs into clinical testing against neurodegenerative disorders within the next year, including in Alzheimer’s disease and dementia.

The South San Francisco-based company also unveiled the first three targets for its pipeline, including two immune system receptors used in the brain: TREM2 and SIGLEC-3, which can act as the accelerator or the brake, respectively, on the body’s microglial response and clearance of beta amyloid proteins.

Alector’s hypothesis contends that a dysfunctional immune system can be linked to higher risks of Alzheimer’s disease and frontotemporal dementia, and the company hopes its immuno-neurology drugs will provide as much benefit as similar therapies have shown in cancer.

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“We are going to test both drugs as standalone modalities and in combination,” Alector CEO Arnon Rosenthal, Ph.D., who expects clinical trials to launch by the end of the year, told FierceBiotech. “You may need to both press the accelerator and release the brake for the car to move. So we are testing both to find the most optimal approach.”

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The company is aiming for fast data on whether their hypothesis is correct and is employing a suite of liquid and imaging biomarkers to gauge the drugs’ early activity against Alzheimer’s. The exploration of a third drug and target, in frontotemporal dementia, is expected sooner due to the faster progression of that disease.

In preclinical research, individuals that had no function in the TREM2 gene developed dementia by the age of 40 and died a few years later, Rosenthal said. In addition, patients with reduced activity could see triple the risk of Alzheimer’s disease, while patients with overexpressing mutations saw less risk than the general population.

“We feel it’s a very strongly validated target that is consistent with our hypothesis,” he said.

RELATED: AbbVie, Alector pair for Alzheimer’s in $205M pact

Alector’s AL002 is an agonistic antibody that increases TREM2 signaling, which causes the brain’s microglia to proliferate and counteract the disease. Meanwhile, AL003 targets the braking checkpoint receptor SIGLEC-3; patients with higher expression levels can carry a seven times higher risk for developing Alzheimer’s.

Both drugs could end up complementing other products being developed in the space, Rosenthal said, such as antibodies that bind to beta amyloid plaque and recruit passing immune cells to clear the complex from the brain.

“But if the microglia are not functioning, this approach is not going to work well,” he said. “We think that our drug would be beneficial whether or not there is a beta amyloid therapy on the market. If there is, our drug will synergize with this therapy.”

RELATED: Alzheimer's experts team up with Adimab, grab $10M to launch Alector

To fund Alector’s clinical trials, the series E financing round was backed by a syndicate of at least 17 high-profile investors, including the VC arms of AbbVie, Amgen and Lilly Asia.

Other investors included GV, the Dementia Discovery Fund, Section 32, OrbiMed, Deerfield Management, Polaris Partners, Federated Kaufmann Fund, Euclidean Capital, Foresite Capital, New Leaf Venture Partners, Perceptive Advisors, Casdin Capital, MRL Ventures, Mission Bay Capital and more.

Why remain private? “At this point, with the amount of investor interest we’ve had over the evolution of the company, we decided the private round would be the best option for us,” Chief Business Officer Sabah Oney told FierceBiotech.

Oney described how taking this opportunity to fund its pipeline once more keeps Alector’s future fundraising options open—including through partnerships, additional private rounds, or by potentially going public in the future, as the company continues to grow. Alector started this year with about 35 employees and aims to increase that number to 90 by January.

“There is no rush from our side into doing something just because everyone else is doing it,” Oney said.

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