A Los Altos-based biotechnology startup has become one of the first Bay Area companies to set its sights on an initial public offering in 2024.
Alto Neuroscience Inc. applied last Friday to be listed on the New York Stock Exchange under the name "ANRO" and is looking to raise as much as $100 million in its IPO, according to a filing with the U.S. Securities and Exchange Commission. However, the company did not indicate how many shares of its common stock it plans to offer or give the price range.
"We aim to deeply understand brain function and match patients to the right medication more efficiently through the use of treatments that, if approved, are tailored to specific patient populations," read the regulatory filing. "As a result, we believe we can help patients avoid the often lengthy process of trying multiple ineffective treatments before finding one to which they respond, potentially helping patients get better faster."
Alto is developing a series of therapies aimed at addressing depression. Following the November announcement of 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.
Currently, two Alto treatments are in phase 2 clinical trials. The company said it plans to use the proceeds from its IPO to further fund trials, advance other treatments into clinical phases and conduct more research.
"We build upon and leverage vast data sets of longitudinal clinical and biomarker data from thousands of patients across (central nervous system_ disorders, which we believe serves as a foundation for applying our approach across numerous patient populations," Alto said in its IPO filing. "Ultimately, if we are successful, we believe our approach can substantially improve upon the traditional, all-comer approach to CNS drug development."
Headed by CEO Amit Etkin, who founded Alto while he was a psychiatry professor at Stanford University, the company 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 that may not be successful.
"As an organization, we have not yet demonstrated an ability to obtain regulatory approval," read the SEC filing. "We may encounter unforeseen expenses, difficulties, complications, delays, and other known or unknown factors in achieving our business objectives."
In addition to depression treatments, the company is also looking at advancing treatments for individuals experiencing schizophrenia and those who have post-traumatic stress disorder.
The company, which is not yet generating any revenue from treatments, posted a two-year net loss of $27.7 million for fiscal year 2021 and 2022, it reported in the regulatory filing.
By the end of last September, the company had accumulated a deficit of $65.7 million since its launch five years ago, according to the filing.
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%.
Alto is the second Bay Area company and the first in Silicon Valley to file for an IPO this year, according to the Nasdaq. In 2023, just four Bay Area companies went public — a notable decline from previous years.
