Alto aims for $101M IPO to pave neuro development climb

Alto Neuroscience is looking to raise roughly $101 million from an initial public offering, the company disclosed Monday. 

The precision psychiatry biotech priced 6.7 million shares between $14 to $16, which, assuming a $15 midpoint price, could total $100.5 million. When including underwriting discounts and commissions, Alto expects to net $89 million. 

The company is on track to be the fourth biotech to raise a first tranche of public funds in 2024, following CG Oncology, ArriVent and most recently, Fractyl Health. The former two companies each snagged upsized financings, combing for more than $500 million in capital. 

Alto’s listing is made all the more interesting by the flurry of neuroscience M&A at the tail end of 2023. Bristol Myers Squibb bought Karuna Therapeutics for $14 billion while AbbVie bought Cerevel for $8.7 billion, thrusting the once-frosty therapeutic area onto the front burner. Both biotechs are working on schizophrenia treatments, with Karuna submitting a new drug application last year. Cerevel’s lead asset, tavapadon, is a phase 3 trial to treat Parkinson’s disease. 

Alto’s pipeline focuses on tackling depression, with three clinical-stage programs to boot. The lead program, ALTO-100, was acquired from Palisade Bio and is progressing through a phase 2b trial in patients with major depressive disorder, with topline data set for the second half of the year. 

A runner-up depression program, ALTO-300, launched into a phase 2b program last June with topline data expected in the first half of 2025. The biotech is honing in on treating patients who are positive for an EEG biomarker identified using machine learning, pointing to early data suggesting a larger benefit in that subset of patients. 

According to Alto’s S-1 filing, the biotech ended 2023 with $82.5 million in cash on hand. It received a boost last week after the California Institute for Regenerative Medicine greenlit a $15 million grant to help fund a phase 2b trial of ALTO-100 in patients with bipolar depression. The final details and timing of the grant are still being nailed down.