Alto Neuroscience preps IPO to push precision psychiatry therapies through the clinic

As Alto Neuroscience’s machine learning-derived, biomarker-based depression therapies accrue positive phase 2 data, the company is planning to join the growing trickle of biotechs aiming to IPO in early 2024.

The Los Altos, Calif.-based drug developer has applied to list on the New York Stock Exchange under the ticker “ANRO,” although the biotech has yet to reveal its expectations for how much it expects to make from the public offering, according to an SEC filing.

Alto’s precision psychiatry approach is backed by Eli Lilly and other investors, who pitched into a $45 million series C in November. At the time, the company said the cash would support four phase 2 trials that have readouts expected by early 2025.

Those trials include ALTO-300, a melatonergic agonist and serotonergic antagonist that was shown last month to improve depression symptoms when used as an adjunctive treatment in an eight-week phase 2a study of patients with major depressive disorder who had an inadequate response to antidepressants.

Alto used an electroencephalogram biomarker, a test that measures electrical activity in the brain, to determine which patients might benefit from treatment over others. Investigators found that patients with the EEG biomarker demonstrated clinical improvement on a scale that measures depression severity called the Montgomery–Åsberg Depression Rating Scale.

Alto said at the time that it also expects to advance its next two candidates, a phosphodiesterase 4 inhibitor called ALTO-101 and a histamine H3 receptor inverse agonist called ALTO-203, into phase 2 proof-of-concept trials for cognitive impairment associated with schizophrenia and major depressive disorder, respectively, with readouts in late 2024 and through the first half of 2025.

The company has also licensed a GluN2B antagonist from Cerecor, and is also hoping it can one day launch agomelatine—an antidepressant already available in Europe and Australia—in the U.S.

Most of the proceeds of the IPO would be used to push these various candidates through the clinic, the company said in the filing.

“We build upon and leverage vast data sets of longitudinal clinical and biomarker data from thousands of patients across CNS disorders, which we believe serves as a foundation for applying our approach across numerous patient populations,” Alto said in its IPO prospectus. “Ultimately, if we are successful, we believe our approach can substantially improve upon the traditional, all-comer approach to CNS drug development.”

By sketching out plans to go public this year, Alto is following in the footsteps of gene-editing Metagenomi, bladder cancer-focused CG Oncology and Arrivent Biopharma, which is focused on bringing China-developed drugs to Western markets. This initial handful of proposals lend some weight to PwC’s recent prediction that the IPO window will “gradually reopen” this year.