Alto Neuroscience shares fell 8% on Wednesday after the company disclosed results from a Phase 2 proof-of-concept study of ALTO-101 targeting cognitive impairment associated with schizophrenia. The trial did not reach statistical significance for its pre-specified primary endpoints, which included both electroencephalography (EEG) and cognitive measures versus placebo.
While the primary endpoints were missed, the study produced directional improvements on several EEG measures. Notably, the full study population (n=83) showed a near-significant effect on theta inter-trial coherence (theta-ITC), a neurophysiological measure correlated with cognitive performance, with an effect size of d=0.34 and a p-value of 0.052.
In a pre-specified analysis limited to a subgroup of participants with greater cognitive impairment (n=59), ALTO-101 produced a nominally significant benefit on theta-ITC compared with placebo, registering an effect size of d=0.44 and a p-value of 0.03. These subgroup findings were presented as supportive signals but did not alter the overall outcome on the primary endpoints.
Tolerability in the trial was described as favorable. Rates of nausea and vomiting among participants receiving ALTO-101 were similar to those in the placebo arm. The study did record high rates of application site skin reactions; however, those reactions were observed at high rates across both the active and placebo groups.
Given the trial results, Alto said it does not intend to independently advance ALTO-101 for cognitive impairment associated with schizophrenia. Instead, the company will reprioritize resources toward ALTO-207, its lead program aimed at treatment-resistant depression. Alto has developed a modified-release, once-daily oral formulation of ALTO-101 and will explore partnering opportunities for that version of the compound.
The ALTO-207 program remains on schedule to begin a Phase 2b trial in the first half of 2026. The planned study is designed to evaluate ALTO-207 as an adjunctive treatment in approximately 178 adults with treatment-resistant depression who have experienced two to five prior treatment failures.
Alto also reported a cash position of $275 million. The company indicated the shift in development focus and the search for partnership options for the modified-release ALTO-101 formulation as part of its next steps following the Phase 2 results.
Key points
- ALTO-101 failed to meet primary EEG and cognitive endpoints in the Phase 2 study versus placebo.
- Directional EEG improvements were observed, including a near-significant theta-ITC effect in the full cohort (n=83, d=0.34, p=0.052) and a nominally significant theta-ITC effect in a more impaired subgroup (n=59, d=0.44, p=0.03).
- Alto will deprioritize independent development of ALTO-101 and prioritize ALTO-207, which is planned to enter Phase 2b in H1 2026; company cash totaled $275 million.
Risks and uncertainties
- Primary endpoints were not met, creating uncertainty about ALTO-101's efficacy in cognitive impairment associated with schizophrenia - this directly affects the biopharma and healthcare sectors.
- High rates of application site skin reactions occurred in both arms, introducing tolerability considerations for topical or application-based formulations - relevant to clinical development and regulatory review in biopharma.
- Alto's decision to shift resources to ALTO-207 and seek partners for a modified-release ALTO-101 means future development of ALTO-101 depends on external agreements and internal prioritization - impacting investors and the company's R&D strategy.
The company will pursue partnering options for the modified-release oral formulation of ALTO-101 while concentrating its internal development efforts on ALTO-207. The planned Phase 2b trial for ALTO-207 will assess adjunctive use in an estimated 178 adults with treatment-resistant depression who have seen two to five prior treatment failures.