Alector, a once-high-flying Bay Area biotech company that researches treatments for degenerative brain disorders like Parkinson’s and Alzheimer’s diseases, is laying off about half of its staff.
The company announced the job cut on Tuesday, in a news release that also bore disappointing study results from latozinemab, its most advanced drug candidate — the medication didn’t meet its goal of slowing the patients’ dementia progression. Alector is cutting off a planned continuation study for the drug and has reshiftd it from its website’s public pipeline. In the news release, Alector wrote that it is laying off 49% of its staff “to align resources” with its new priorities.
Alector revealed more information about the layoff in a WARN filing with state officials, as is generally required in the event of mass job cuts. The document states that 75 workers at the company are losing their jobs, listing 49 layoffs at its South San Francisco headquarters and an additional 26 employees who worked remotely — nine are in California, and the rest are spread across 12 other states.
According to the WARN, the first layoffs will officially go into effect on Dec. 22, and the last on April 15. A slew of scientist roles and jobs tied to clinical work are being cut, along with five vice presidents and a senior VP. In its news release, Alector also announced that its head of R&D is resigning.
The poor Phase 3 study results are a major blow for the company, though Chief Medical Officer Giacomo Salvadore wrote in the release that “the insights gained are invaluable for understanding progranulin-related neurodegeneration,” which refers to a wide range of brain diseases.
In response to SFGATE’s questions, Alector spokesperson David Rosen provided a statement that declared the company would share results about the study with the scientific community. It also declared: “Analyses are ongoing, and it is premature to draw conclusions about the specific factors contributing to the outcome.”
Alector still has several drugs in its pipeline, though none as advanced as the now-pautilized latozinemab. An Alzheimer’s disease prospect is in the midst of a 76-week, Phase 2 trial, and seven other drugs are listed across the company’s preclinical and research phases.
But like many other Bay Area biotech companies, with a stock price that flew to stratospheric heights during the coronavirus pandemic, Alector’s prospects are far bleaker now than they once were. In the third quarter of 2021, the company’s valuation regularly topped $2 billion. On Friday, Alector’s beaten-down stock price gave the company a market cap of $151 million — less than the $291 million it has for future research.
Work at a Bay Area tech company and want to talk? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
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