Price Target on Psychiatric Drug Biotech Boosted 200%
Research Report

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Disclosures for Wedbush, Alto Neuroscience Inc., October 21, 2025

Our ANRO price target derives from a sum-of-parts DCF model which examines potential cash flows deriving from ALTO-101 and ALTO-207, discounted back by 40% per year. Company Description Alto Neuroscience, Inc. (ANRO) is a Mountain View, CA, based company whose efforts focus on developing novel treatments for CNS disorders. Risks to the Attainment of Our Price Target and Rating: ● Clinical. Data emerging from clinical studies can significantly impact shares in either a positive or negative direction. ● Regulatory. ANRO may employ accelerated strategies to gain approval. ANRO will also incorporate companion diagnostic development strategies. Regulators may require additional data or could alter their requirements for approval, necessitating additional or longer studies. ● Financial. ANRO will require additional funding to fully develop pipeline candidates. Shares may be negatively impacted if the company's ability to access the capital markets is limited. ● Commercial. Failure to execute commercially or inability to meet/exceed expectations can impact shares. ● Competitive. Updates from competitors may positively or negatively impact shares. Relevant competitors include companies such as AXSM, LLY, ABBV, NBIX and SAGE. Other competitors are likely to emerge over time. Analyst Certification I, Laura Chico, certifies that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this report. Mentioned Companies Investment Rating System: OUTPERFORM: Expect the total return of the stock to outperform relative to the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. NEUTRAL: Expect the total return of the stock to perform in-line with the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. UNDERPERFORM: Expect the total return of the stock to underperform relative to the median total return of the analyst's (or the analyst's team) coverage universe of the next 6-12 months. The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the other stocks in the analyst's coverage universe (or the analyst's team coverage).* Rating distribution (as of October 21, 2025) Investment Banking Relationships (as of October 21, 2025) OUTPERFORM: 72.58% OUTPERFORM: 8.33% NEUTRAL: 25.81% NEUTRAL: 4.69% UNDERPERFORM: 1.61% UNDERPERFORM: 0.00% The Distribution of Ratings is required by FINRA rules; however, WS' stock ratings of Outperform, Neutral, and Underperform most closely conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS' stock ratings are on a relative basis. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS' total revenues, a portion of which are generated by WS' investment banking activities. Company Specific Disclosures This information is subject to change at any time.

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Alto Neuroscience Inc. (ANRO:NYSE), having recently met with the U.S. Food and Drug Administration (FDA), announced it will accelerate development of its investigative drug, ALTO-207, in treatment-resistant depression (TRD), reported Wedbush Analyst Dr. Laura Chico in an October 21 research note.

Based on this news and Alto's recent capital raise, Wedbush raised its target price on Alto by 200%.

"Given the earlier Phase 2a data with ALTO-207, we do like the opportunity for efficacy in a TRD population," Chico wrote.

9% Return Implied

Chico explained how the new target was derived. Wedbush incorporated into its estimates on Alto the proceeds of its US$50M equity raise. Also, given the development of ALTO-207 in TRD is "largely paid for via the financing," the financial services firm assigned credit to this clinical program in its Alto valuation. These changes resulted in the higher target price of US$12 per share, previously US$4.

Compared to the new target, the U.S.-based biotech was trading at the time of the report at about US$11 per share. From this price, the return to target is 9%.

Alto remains rated Neutral. The company has 27.1 million (27.1M) shares outstanding, a market cap of US$165 million (US$165M) and a 52-week range of US$1.60–14.85 per share.

Possible Early 2029 Launch

Chico presented Alto's development timeline for ALTO-207 in TRD. ALTO-207 is a combination drug of Pramipexole and Ondansetron the biotech acquired from Chase Therapeutics in June. The start of a Phase 2b study is slated for mid-2026. The start of a Phase 3 study is planned for early 2027 because additional work on the study protocol must be done first.

"If the previously planned Phase 2b study (starting mid-2026) qualifies as a second pivotal trial, we do think a path to market can be secured," Chico wrote.

Based on Alto's timeline, Wedbush models a conservative early-2029 launch in the U.S. of ALTO-207 for TRD. Assuming the drug is priced in line with other branded antidepressants, the financial services firm estimates full-year 2031 revenue of US$485M.

Financing Completed

Alto's second new big development is that it completed a US$50M private placement and will use the capital to fund the two upcoming clinical trials of ALTO-207 in TRD, Chico reported. The financing, a Private Investment in Public Equity, or PIPE, included issuance of 3.8M shares at US$5.91 apiece, with additional prefunded warrants to purchase another 4.6M common stock shares.

Study Data Delayed

In a last bit of news, Alto pushed back the readout of ALTO-101 in CIAS (cognitive impairments associated with schizophrenia) to Q1/26 from H2/25 as it is still enrolling patients for the trial. However, in a positive development, an assessment of patient compliance with ALTO-101 as well as ALTO-100, via blinded pharmacokinetic sampling, showed 96–100% compliance rates.

"We see this as most important to ensure good trial execution," Chico wrote.