Alector ( NASDAQ: ALEC ) stock fell ~12% on Sept. 9 after Morgan Stanley downgraded the company's stock to Equal Weight from Overweight with price target cut to $13 from $27 citing a long road ahead for neurological disorder drug AL001 to reach market.
The SA Quant Rating on ALEC is Buy , which takes into account factors such as growth and profitability, among others things. The average Wall Street Analysts' Rating concurs with its own Buy rating, wherein 6 out of 11 analysts tag it as a Strong Buy. YTD, the stock has slumped ~51.7%, see chart here .
Morgan Stanley Analyst Matthew Harrison said the firm remained encouraged by Alector management's approach of modulating the brain immune system to treat neurodegeneration, but thinks that there is potentially a long path to market for AL001 and positive data is required to get the efficacy for FDA approval.
The analyst added that the outlook for TREM2 was unclear but the firm continue to find value in Alector management's approach to modulating the activity of microglial cells. However, analyst sees the road to market being longer and despite the promising biomarker data in HV, it was uncertain whether there would be positive biomarker and efficacy data in patients with Alzheimer's disease (AD).
Alector's ( ALEC ) drug candidate ALN002 targets TREM2, a gene that gives instructions for making the protein triggering receptor found on myeloid cells. ALN002 works by improving TREM2 signaling, enhancing microglia activity.
The analyst noted that Alector's several pipeline programs are still in early stages which also need further clinical data to de-risk. The firm waits for more clinical de-risking of the pipeline assets but added that Alector is a quality company.
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Alector stock falls 12% as Morgan Stanley cuts rating on long path for AL001