An Alto Neuroscience investor claims CEO Amit Etkin and other directors overstated the efficacy of the psychiatric biotech company’s lead drug candidate for treating major depressive disorder, according to a lawsuit filed Tuesday in California federal court that alleges the company’s stock price plummeted when the truth came out. From
the time of Alto’s $120 million initial public offering in February 2024, the company’s officers issued false and misleading statements about its drug candidate, ALTO-100, by overstating its commercial prospects and its efficacy for the treatment of mood disorders, according to the derivative complaint. But following the drug’s Phase 2b clinical trial for the treatment of major depressive disorder, or MDD, the truth emerged that ALTO-100″‘did not meet its primary endpoint, assessed by a change from baseline in Montgomery-Åsberg Depression Rating Scale (MADRS), compared to placebo,'” the suit states. On that news, Alto’s stock price dropped almost 70%, from a close of $14.53 per share on Oct. 22, 2024, to a close of $4.36 per share on Oct. 23, 2024.
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