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November 7, 2018
Arnon Rosenthal, Ph.D.
Chief Executive Officer
Alector, Inc.
151 Oyster Point Boulevard
Suite 300
South San Francisco, CA 94080
Re: Alector, Inc.
Draft Registration Statement on Form S-1
Filed October 12, 2018
CIK No. 0001653087
Dear Dr. Rosenthal:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Overview, page 1
1. Please revise throughout to remove any inference regarding the efficacy
of your product
candidates, that your product candidates are more likely than others to
receive FDA or
foreign approval, or that your product candidates are more likely to
receive faster
approvals. Given that the determination of a product's safety and
efficacy is solely within
the FDA's authority and your product candidates have not yet completed
clinical trials,
these inferences are not appropriate. We note by way of example your
statement in the
Arnon Rosenthal, Ph.D.
FirstName LastNameArnon Rosenthal, Ph.D.
Alector, Inc.
Comapany 7, 2018
November NameAlector, Inc.
November 7, 2018 Page 2
Page 2
FirstName LastName
second bullet point on page 1 regarding your ability to "obtain
meaningful indications of
efficacy earlier than would otherwise be expected"; your statement in
the last full
paragraph that certain clinical trials "have the potential to
demonstrate clinical efficacy
more quickly"; your statement on page 101 regarding "efficacy in an
animal disease
model"; and similar statements elsewhere in the prospectus.
2. Refer to the clinical pipeline table on pages 2 and 88. Please include
columns for each of
Phase 1, 2, and 3 clinical trials and clarify that AL001 is in the
beginning of Phase 1.
3. Refer to the table captioned "Programs in R&D" on pages 2 and 88.
Please tell us why
you believe it is material to investors to include this table in the
prospectus summary. In
this regard, we note you have four product candidates that appear to
be significantly more
advanced in their development than the candidates in the "Programs in
R&D" table and
you are prioritizing the development of the more advanced candidates
over the
development of the other candidates. If you believe it is material to
retain the "Programs
in R&D" table, please further differentiate it from the pipeline table
appearing
immediately above it in order to reduce the risk of the tables being
viewed as a single
table.
4. Please balance the first paragraph following the tables on page 2 and
88 by clarifying that
orphan drug designation does not convey any advantage in or shorten
the duration of the
regulatory review and approval process.
5. In the first paragraph following the tables on page 2, please define
pharmacokinetic and
pharmacodynamic and briefly explain the different characteristics in
AL001 and AL101.
Implications of Being an Emerging Growth Company, page 5
6. Please provide us with copies of all written communications, as
defined in Rule 405 under
the Securities Act, that you, or anyone authorized to do so on your
behalf, present to
potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they
retain copies of the communications.
Use of Proceeds, page 63
7. Refer to the fourth and fifth bullet points. Please specify how far in
the development of
each of preclinical pipeline and Discovery Program you expect to reach
with the proceeds
of the offering. To the extent any material amounts of other funds are
necessary to
accomplish the specified purposes, state the amounts and sources of
other funds needed
for each specified purpose and the sources. Refer to Instruction 3 to
Item 504 of
Regulation S-K.
Arnon Rosenthal, Ph.D.
FirstName LastNameArnon Rosenthal, Ph.D.
Alector, Inc.
Comapany 7, 2018
November NameAlector, Inc.
November 7, 2018 Page 3
Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Estimates
Stock-Based Compensation, page 81
8. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Our Strategy, page 90
9. You state that you are focused on a biomarker-driven approach. Please
discuss whether
this approach may limit the potential market for your product
candidates and whether you
may be required to conduct additional clinical trials on a broader
patient population in
order to obtain approval. We note your disclosure on page 88 that you
anticipate initiating
a clinical trial in an additional genetic subset of FTD patients.
Our Pipeline Programs, page 94
10. For each of the PGRN, TREM2, and SIGLEC 3 preclinical trials discussed
in this section,
please expand the description of these trials to provide specific
details and results of the
studies, including, the date(s) of the trials and the location; the
identity of any trial
sponsor, as applicable; patient information (e.g., number of animals
modeled and treated
and the criteria for participation in the study); duration of
treatment and dosage
information (both amount and frequency); the specific endpoints
established by the trial
protocol; and actual results observed, including whether statistical
significance was
demonstrated and the p-values supporting statistical significance.
Similarly revise the
description of the Phase 1 trials to the extent this information is
available.
Anti-Takeover Effects of Certain Provisions of Delaware Law . . . .
Exclusive Forum, page 159
11. We note that the amended and restated Certificate of Incorporation
that will be effective
on closing of this offering and your disclosure here identifies the
Delaware Court of
Chancery as the exclusive forum for certain litigation, including "any
derivative action."
Please disclose whether this provision applies to actions arising
under the Exchange Act.
In this regard, we note that Section 27 of the Exchange Act creates
exclusive federal
jurisdiction over all suits brought to enforce any duty or liability
created by the Exchange
Act or the rules and regulations thereunder. If this provision does
not apply to actions
arising under the Exchange Act, please ensure that the exclusive forum
provision in your
governing documents states this clearly.
12. We note that the amended and restated Certificate of Incorporation
that will be effective
Arnon Rosenthal, Ph.D.
Alector, Inc.
November 7, 2018
Page 4
upon closing of this offering and your disclosure identify the federal
district courts as the
exclusive forum for claims arising under the Securities Act. Please
revise your disclosure
to state that a court may determine that the provision is unenforceable,
and to state that
shareholders will not be deemed to have waived the company's compliance
with the
federal securities laws and the rules and regulations thereunder.
Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Revenue recognition
Collaboration Revenue, page F-10
13. Regarding your collaboration with AbbVie, please provide us the
following:
An analysis with reference to the accounting literature on which you
relied supporting
your accounting for AbbVie's option to enter into a license and
collaboration
agreement with you.
The duration over which the Phase 2 clinical trials are expected to be
completed.
A description and amount by milestone, option-exercise fee or by type
for the $985.6
million in milestone payments and option-exercise fees.
General
14. Please provide us mockups of any pages that include any additional
graphics or artwork,
including accompanying captions. Please keep in mind, in scheduling
printing and
distributing the preliminary prospectus, that we may have comments after
reviewing the
materials. For guidance, refer to Securities Act Forms Compliance and
Disclosure
Interpretation 101.02.
15. We have received your application for confidential treatment for portions
of
certain exhibits. Please note we will provide under separate cover any
comments we may
have on your application.
You may contact Keira Nakada at (202) 551-3659 or Jim Rosenberg, Senior
Assistant
Chief Accountant, at (202) 551-3679 if you have questions regarding comments on
the financial
statements and related matters. Please contact J. Nolan McWilliams,
Attorney-Advisor, at (202)
551-3217 or Dietrich King, Attorney-Advisor, at (202) 551-8071 with any other
questions.
Sincerely,
FirstName LastNameArnon Rosenthal, Ph.D.
Division of
Corporation Finance
Comapany NameAlector, Inc.
Office of
Healthcare & Insurance
November 7, 2018 Page 4
cc: Tony Jeffries
FirstName LastName