Alector, Inc.

AI-generated fair value estimate for this company.

Method: Risk-adjusted pipeline NPV plus net cash. Both of Alector's lead partnered programs failed within the past year: latozinemab (GSK-partnered) missed its Phase 3 primary endpoint in Oct 2025, ending the GSK alliance (terminates Jan 2, 2027, with most future milestone payments no longer expected); nivisnebart (also GSK) was halted in April 2026 on an interim futility analysis; AL002 (AbbVie-partnered) missed its Phase 2 endpoint in Jan 2025 and reverted to Alector with the $250M milestone forfeited. Remaining value: three wholly-owned, blood-brain-barrier-delivery preclinical/IND-stage candidates targeting Alzheimer's/Parkinson's, led by an anti-amyloid antibody with IND filing expected early 2027 - assumed $400M peak sales, 25% owned-economics margin ($100M/yr peak), valued via a 4.0x peak-annual-economics multiplier (~13% discount rate, 10-yr commercial curve) discounted ~9 years to an assumed ~2035 approval (DF ~0.333) = ~$133M unrisked x 6% preclinical-stage probability of success (CNS/Alzheimer's preclinical PoS is among the lowest of any indication) = ~$8M; the two less-advanced preclinical candidates are assigned a nominal combined $5M rNPV. Total pipeline rNPV ~$13M, plus net cash of ~$140M (cash $172.80M less debt $32.76M, June 2026). Total equity value ~$153M / 111.66M shares outstanding = ~$1.35/share.

Reasoning: Alector has essentially reverted to an early-stage biotech shell with no late-stage assets after both lead, externally-partnered programs failed within 12 months, so a standard FCF DCF is inapplicable; the right lens is net cash plus a heavily risk-adjusted value for the earliest-stage, wholly-owned pipeline. This intrinsic estimate sits below the current market cap, which may reflect the market assigning some speculative shell/optionality value the rNPV does not capture, or lag in re-rating; investors should also weigh real near-term dilution and financing risk (TTM cash burn of ~$158M against $172.8M cash), partly offset by the roughly 50% workforce reduction that followed the Oct 2025 failure, which should lower the forward burn rate.