Collaboration with GlaxoSmithKline plc Sponsored ADR (GSK.US) drug fails to slow progress of dementia, Alector (ALEC.US) plummets nearly 60% in pre-market trading.

British pharmaceutical company GlaxoSmithKline plc Sponsored ADR (GSK.US) announced that its experimental drug latozinemab, developed in collaboration with the American biotech company Alector (ALEC.US), failed to slow the progression of dementia, marking another failure in the development of potential dementia treatments. The drug, developed by Alector, targeted a type of dementia called frontotemporal dementia. Following the announcement, Alector's stock plummeted nearly 60% in pre-market trading on Wednesday. GlaxoSmithKline plc Sponsored ADR stated that it will terminate the clinical trial and analyze the results. Alector had announced on Tuesday that its experimental drug did not slow the progression of a rare form of dementia in a late-stage clinical trial, leading the company to terminate the study and lay off nearly half of its employees. The drug, latozinemab, was being tested on patients with frontotemporal dementia caused by a mutation in the progranulin gene. Such gene mutations can lead to early and severe cognitive decline. The drug resulted from a partnership agreement between Alector and GlaxoSmithKline plc Sponsored ADR reached in 2021, with a potential value exceeding $2 billion. The trial was conducted jointly by Alector and its partner GlaxoSmithKline plc Sponsored ADR for 96 weeks. The results showed that, based on commonly used evaluation criteria, the drug did not provide clinical benefit in slowing disease progression, but did increase levels of a key protein in the patients' blood. Alector stated that the company will now focus on other experimental therapies for Alzheimer's and Parkinson's diseases, including related projects using its proprietary technology for drug delivery across the blood-brain barrier. The company reported that as of the end of September, its cash and investments amounted to approximately $291.1 million, enough to support its operations until 2027. Alector and GlaxoSmithKline plc Sponsored ADR are currently collaborating on the early development of a treatment for Alzheimer's disease, with clinical trials already initiated this year. In early London trading, GlaxoSmithKline plc Sponsored ADR's stock price fell by as much as 1.4%, but by the time of writing, GlaxoSmithKline plc Sponsored ADR's stock in the US was up by 0.59%. While this drug is not a key driver of future sales for GlaxoSmithKline plc Sponsored ADR, the failure of this trial has dealt a blow to the British pharmaceutical company's development goals, and setbacks in the overall efforts of the pharmaceutical industry to slow dementia progression. The Chief Medical Officer of GlaxoSmithKline plc Sponsored ADR stated that the insights gained from the development of latozinemab may help in understanding the mechanisms of neurodegenerative diseases being studied. Alector plans to lay off nearly half of its employees and announced that its head of R&D will resign. Within GlaxoSmithKline plc Sponsored ADR, outgoing CEO Emma Walmsley is facing investor pressure due to issues in the company's new drug development pipeline - investors are concerned whether GlaxoSmithKline plc Sponsored ADR has a suitable strategy in place to achieve its goal of surpassing 40 billion in sales by 2031. Her successor, Luke Miels, will take over in January next year.