Alector, Inc. Common Stock Investor update

Please go ahead. Good morning and welcome everyone.

As you heard, I'm Arnon, Alector CEO and co-founder. We don't see each other, but there are over 150 people registered to this seminar, so I'm looking forward to a lively Q&A session after the presentation. For the people who know Alector for the last 10 years, you should know that we are now a very different company than we were in the past. Our mission remains the same, our resilience remains the same, but our strategy had fundamentally changed. In the last 10 years, we have developed immune checkpoint therapies for the brain immune cells as a therapeutic strategy for neurodegeneration. We now have an emerging portfolio of bispecific antibodies, enzymes, and nucleic acid therapies that are all driven by our blood-brain barrier technologies and address more validated targets.

The probability of technical success of our second generation targets is significantly higher than the completely novel targets we have pursued in the past. Evidence for our change in trajectory and reinvention. The first evidence is the recent licensing agreement that we have just done with the Genentech Roche organization. This was on a brain-enabled lysosomal enzyme called GCase that was dedicated as a therapy for Parkinson's disease and ultimately Lewy body dementia. This was an engineering tour de force where we optimized the blood-brain barrier technology, our Alector Brain Carrier, with regard to affinity, configuration, binding kinetics, and in parallel, we spent several years engineering the enzyme itself, which is naturally a very unstable molecule, to make it up to 50 times more stable and more potent.

The combination of our engineered blood-brain barrier technology and the enzyme led to a unique drug that can be delivered peripherally, enter the brains, enter lysosomes, and can replenish missing GCase enzyme. To the best of our knowledge, we were the only one in the world who were able to achieve this feat, and the Roche Genentech organization recognized that. Despite the fact that they are the premier company for blood-brain barrier technology, and they have significant focus on Parkinson's disease, they decided to partner with us. This partnering really provide us both with validation of the technology and a significant runway extension that enables us to take multiple drugs to the clinic. The second evidence that we are reinventing our Alector as a new company is our increasing new pipeline.

We now have, as I mentioned, bispecific antibodies, and today we will discuss our brain-enabled anti-Aβ antibodies, as well as an increasing in size portfolio of brain-enabled siRNA. Today we will discuss our brain-enabled tau siRNA and our brain-enabled alpha-synuclein siRNA. Starting with our brain-enabled Alector Brain Carrier, AL137. You all know about Alzheimer's disease, but just to remind you, Cowen recently wrote a report about Alzheimer's disease where they assessed the future market of next generation Alzheimer's drug to be $70 billion. It's a pretty meaningful market. There's expected to be over 90 million Alzheimer's patients by 2050, and although Alzheimer's is considered a cognitive disorder, it's quite lethal. More than 2 million people die of Alzheimer's disease every year. Today, despite several approved drug, there are really no meaningful disease modifying therapies for this disorder.

As you know, the most significant cause of Alzheimer's disease, or one of the two main causes, is the pathological beta amyloid peptide. This is a 42 amino acid peptide, and this is the main target of Alzheimer's disease therapy now. There are two approved anti-Aβ antibody drugs and multiple additional antibody against the beta amyloid in the pipeline. We have developed a drug which we think contain the best in class features, to make it a very competitive drug in this crowded field. As you see on the left side, our drug recognizes a toxic version of the beta amyloid. This is the pyroglutamate 3 version of the Aβ peptide. This is a clinically validated epitope that was shown to be effective by donanemab, which is an approved drug made by Lilly, and by remternetug, which is a phase III drug, also by Lilly.

This is a clinically validated epitope. We also have what is called a full effector function. When I talk about effector functions, I mean amino acid sequences that are designed to recruit immune cells. As I'll discuss further, these amino acids and recruitment of immune cells are really critical in order to remove Aβ plaques. In addition, we have a unique Alector Brain Carrier, which recognizes the transferrin receptor as a Trojan horse. It leads to a very potent brain entry of the drug, and also because of the unique epitope that we are employing, has significantly reduced our ARIA risk, which is a main side effect of the transferrin-based brain shuttles. I will go over each of these features in more details in subsequent slides. But before I do that, I want to really articulate our understanding of how beta amyloid antibodies work in the brain.

If you look at the bottom three panels, what happens is that when you inject an anti-Aβ antibody into the bloodstream, it enters the brain. It has to recognize a toxic version of the beta amyloid plaque. It decorates it, and then it uses, again, the effector function, the amino acid sequence on the constant region of the antibody to recruit the immune cells of the brain, the microglia. The microglia then decorate the plaque and start digesting it, phagocytozing it, and removing it from the brain. An antibody has to have three features in order to be clinically effective. It has to be able to enter the brain at sufficient concentration. It has to recognize toxic versions of the beta amyloid plaques, and it has to be able to recruit the immune cells in the brains to clear the Aβ plaques.

The antibodies are just the surveyors. They just tag the regions where the plaque resides, but the actual excavators, the actual entities that remove the plaques, are the microglia, the immune cells. If you cannot recruit immune cells, as you see in the top three panels, you can enter the brain, you can tag the A-beta plaque, but if you do not recruit the excavators, you do not remove the plaques, and you do not impact the disease. Again, this will become very important in subsequent slides, where I discuss the importance of the ability to recruit immune cells to plaques. Going back to AL127, we systematically checked every feature of the drug to make sure that it has the potential to be first in class. Here you see staining of A-beta plaques on human AD brain sections by AL127. On the top, you see extensive recognition of A-beta plaques.

We consistently compare to the validated drug, to the donanemab and remternetug, and you see on the bottom very similar staining by remternetug. Again, this validates our argument that we have a clinically validated epitope on the drug. Our antibody not only recognizes A-beta plaque, it is also able to recruit immune cells to phagocytose, to digest A-beta plaques. On the left side, you see complex culture of human microglia neurons and astrocytes that were seeded with beta amyloid. You see if you just have beta amyloid and microglia on the top left, you see some digestion of beta amyloid as reflected by the red dots. But if you add our antibody on the bottom right under the subheading AL127, you see many more red dots, suggesting that a lot more A-beta peptide entered microglia with the assistance of the antibody and got digested.

The more red dots you see, the more A-beta digestion is happening. This can be quantified on the right side. You see a time-dependent digestions of A-beta plaques or A-beta. In blue, you see our antibody, 127, and in purple, you see the two validated antibodies, remternetug and donanemab, that show very similar time-dependent phagocytosis. Again, supporting the notion that we are targeting a clinically validated epitope. Going back now to the effector function. As I said, antibodies need to be able to recruit immune cells to remove beta amyloid plaques. This requirement was demonstrated clinically repeatedly over the last 10 or 15 years. Today, all the antibodies that show ability to extensively remove A-beta plaques and to show clinical benefits are antibodies that have full effector functions. The most potent effector function possible is present in this antibody subset IgG1.

IgG1 is able to actively recruit the immune cells in the brain through multiple, so-called Fc gamma receptors, and instruct them to remove A-beta plaques. The antibodies like lecanemab, donanemab, which are now on the market, aducanumab, which was approved but was removed from the market, and two phase III antibody, remternetug and trontinemab, all have full IgG1, unmodified, unchanged IgG1, and they all show extensive plaque removal exceeding 70%. This is more or less the threshold that you need in order to start eliciting clinical benefit. In context, on the right side, you see five different antibodies that have reduced effector functions. IgG4, IgG2 have weakened ability to recruit immune cells compared to IgG1, and all these antibodies failed clinical trials. The most recent one is the Acumen drug, which have, again, an IgG2A reduced effector function.

They were able to show reduction of 25% in plaque level with very high dose of an antibody of 60 mg per kg. We know very well from another antibody, gantenerumab from Roche, that 25% is not sufficient to elicit any clinical benefit. Gantenerumab reduced A-beta plaques by 60%, and this was not enough to elicit clinical benefit. Today, again, no anti-A-beta antibody with any type of modified effector function has shown to be able to extensively reduce A-beta plaque or to show clinical efficacy. The first generation reduction in effector function was designated to reduce the ARIA side effects, but basically it lead to lack of clinical benefit. Despite that, there are multiple antibodies with blood-brain barrier technology that are still being developed with modified effector function.