Alector Announces Second Round of Layoffs Amid Strategic Realignment

Alector, a San Francisco-based biotech company, has disclosed plans for a second round of layoffs in 2025, affecting approximately 13% of its workforce. This decision comes as part of the company's ongoing efforts to streamline operations and focus on key strategic priorities in neurodegenerative disease research.

Workforce Reduction and Financial Implications

The latest cuts, expected to be completed during the third quarter of 2025, will result in the termination of about 25 employees. This follows a previous round of layoffs announced in late 2024, which affected 17% of the company's staff. After the current reduction, Alector's workforce is projected to shrink to just under 170 employees.

According to an SEC filing, Alector anticipates one-time restructuring charges of approximately $2.4 million associated with this workforce reduction. Despite these costs, the company reports that its existing cash, cash equivalents, and investments should be sufficient to fund operating expenses and capital expenditure requirements through 2026.

Strategic Focus on Neurodegenerative Disease Programs

Alector's CEO, Arnon Rosenthal, emphasized the company's commitment to advancing its preclinical and research pipeline, with a particular focus on programs targeting frontotemporal dementia and Alzheimer's disease. Key developments include:

1. The INFRONT-3 Phase III trial of latozinemab, a progranulin drug for frontotemporal dementia, with topline data expected by the fourth quarter of 2025.

2. The PROGRESS-AD Phase II trial of AL101/GSK4527226, another progranulin candidate for early Alzheimer's disease, which is expected to complete enrollment by mid-2025.

3. Ongoing work on a preclinical and early research pipeline aimed at removing toxic proteins, replacing deficient proteins, and restoring immune and nerve cell function.

Financial Performance and Future Outlook

Alector's recent financial results show signs of improvement, with a net loss of $119 million in 2024, compared to $130 million in 2023. As of December 31, 2024, the company reported cash, cash equivalents, and investments totaling $413.4 million.

The company's strategic realignment follows disappointing Phase II findings for its Alzheimer's antibody AL002, which led to the discontinuation of a long-term extension study. Despite these setbacks, Alector remains focused on advancing its key neurodegenerative disease programs and optimizing its resource allocation to support long-term growth and innovation in the challenging field of neurological disorders.