Alto Neuroscience's trial misses main goal in depression

On Wednesday morning, Alto Neuroscience experienced a significant stock drop of 60%, following the announcement that its mid-stage clinical trial for an oral small molecule did not yield positive results for improving symptoms of major depressive disorder (MDD).

The Phase 2b trial aimed to evaluate ALTO-100 using a unique precision biomarker approach in psychiatry. However, the drug did not demonstrate significant improvement over a placebo in reducing depressive symptoms, as measured by the Montgomery-Åsberg Depression Rating Scale (MADRS), in 301 patients after six weeks of treatment.

Additionally, the trial did not meet its “key” secondary endpoints. This included demonstrating efficacy compared to a placebo using the Clinician Global Impression Scale-severity, a tool that measures the severity of illness, and remission rates based on MADRS. Despite these setbacks, Alto reported that the safety and tolerability profile of ALTO-100 was favorable and consistent with previous data.

The disappointment was stark, considering that in a Phase 2a study conducted the previous year, ALTO-100 met its primary endpoint. The treatment showed significant improvement in both monotherapy and adjunctive treatment groups. Alto’s CEO, Amit Etkin, expressed that the company would promptly analyze the complete data set from the study to understand the outcomes better and integrate the insights across their platform. He emphasized that their robust cash reserves would support the company through several upcoming clinical milestones.

Earlier this year, Alto Neuroscience went public, generating $129 million in February, which exceeded their initial target of $89 million. As of the last financial update in August, the startup, which is backed by Eli Lilly, indicated that its current funds should sustain the company until 2027.

Despite the recent trial's outcome, ALTO-100 continues to be evaluated as an adjunctive treatment in an ongoing Phase 2b study for bipolar depression. Moreover, Alto has multiple data readouts expected next year for other assets, such as ALTO-203, an H3 receptor inverse agonist, and ALTO-300, both targeting major depressive disorder.

Analysts from TD Cowen expressed disappointment over the recent data but remained hopeful about the drug’s potential. Ritu Baral from TD Cowen suggested that the positive signal might have been more evident in the adjunctive MDD population. However, without further details on the Phase 2b data, she hesitated to make broader assumptions about Alto’s pipeline of agents paired with specific biomarkers.

In contrast, analysts from Jefferies were more skeptical. They communicated to investors that the trial’s failure likely stemmed from a lack of drug efficacy rather than any errors in management execution. They raised concerns about the broader implications of Alto’s biomarker approach to central nervous system and psychiatric conditions.

While the recent trial results were disappointing, Alto Neuroscience remains committed to its research and development efforts. The company continues to pursue its mission of developing innovative treatments for mental health disorders, leveraging its biomarker-based precision psychiatry strategy. The industry will be closely watching the upcoming data readouts and further developments in Alto’s journey towards providing new solutions for patients with psychiatric conditions.