Startup Alto Neuroscience — which focused on what it calls “precision psychiatry” — has set terms for the first initial public offering so far in 2024 in Silicon Valley.
The Los Alto-based company was the first biotechnology company in the region to apply for an IPO earlier this month and now plans to raise upwards of $103 million through the deal, according to a regulatory filing.
The startup plans to sell 6.7 million shares for between $14 and $16 a piece, according to an updated document filed with the Securities and Exchange Commission. Alto is also setting aside 1.01 million shares for its underwriters — William Blair & Company L.L.C., Jefferies, TD Comen and Truist Securities, Stifel Nicolaus & Co, Robert W. Baird & Co. Incorporated
At the middle of its range, the offering would give Alto an initial market capitalization of $363 million, assuming the underwriters don't exercise their option on its shares. The company plans to list its stock on the Nasdaq under the ticker ANRO.
Alto is developing a series of therapies aimed at addressing hard-to-treat depression. Following a $45 million Series C funding round, the company released an internal study that said one of its therapies, ALTO-300, improved depression symptoms in patients who had little to no improvement in their symptoms using antidepressants.
Additionally, two Alto treatments are in phase 2 clinical trials. According to the filing, the company plans to use the proceeds from its IPO to further fund trials, advance other treatments into clinical phases and conduct more research.
The company — headed by CEO Amit Etkin, who founded Alto while he was a psychiatry professor at Stanford University — warned potential investors of the risks of investing as Alto is a clinical-stage biotechnology company. In the event the company achieves having a viable product, it said it would have to transition Alto from a “development focus” to one that is “capable of supporting commercial activities”, a feat it acknowledged may not be successful.
The company has yet to generate any revenue from treatments and posted a net loss of $27.7 million for fiscal year 2021 and 2022. By the end of last September, the company had accumulated a $65.7 million deficient since its founding five years ago.
To date, the company has raised $147 million in funding at a $220 million valuation, according to PitchBook Data. Its largest investors are Alpha Wave Ventures, which holds a 17.8% stake; affiliates with Apeiron Investment Group Ltd, which holds 15.2%; and two individuals, which collectively hold 13.4%.
