Mizuho reiterates Alector stock rating at Neutral on Roche deal
Mizuho has maintained a Neutral rating and a $1.50 price target on Alector Inc. (NASDAQ: ALEC) following the company's announcement of a partnership with Genentech, a subsidiary of Roche. The stock is currently trading at $1.99, which is above the analyst's target, with a market capitalization of $222 million. The agreement involves AL050, a preclinical blood-brain-barrier technology-enabled GCase enzyme replacement therapy for Parkinson's disease.
This partnership provides Alector with significant pharmaceutical validation and cash flow. However, Alector has been experiencing an 83% revenue decline and is currently operating with a negative free cash flow of $158 million over the past year, according to InvestingPro data. Mizuho sees this as an opportunity for Alector to move into a new phase ("Alector v2.0") following prior late-stage clinical disappointments. The firm remains optimistic about the potential of blood-brain-barrier-enabled drug candidates.
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