Alto Neuroscience has raised $100 million through an underwritten registered direct offering to accelerate the late-stage development of its lead candidate ALTO-207 for treatment-resistant depression.

The clinical-stage biotechnology company will use the proceeds alongside its existing cash and cash equivalents to fund an additional planned Phase 3 trial evaluating ALTO-207 as a monotherapy for adults with treatment-resistant depression, while also supporting general working capital.

The financing consists of 3,776,436 shares of common stock priced at $26.48 per share, with the offering expected to close on 14 July, subject to customary closing conditions.

The round was led by EcoR1 Capital, with participation from new and existing healthcare-focused investors.

Treatment-resistant depression affects millions of people worldwide and remains one of the greatest challenges in psychiatry. Although several medicines are available, many patients fail to achieve an adequate response, highlighting the need for new therapeutic approaches.

Alto is developing precision psychiatry medicines by using biological markers to identify patients who are more likely to respond to specific treatments. ALTO-207 is among the company’s most advanced clinical programmes and is being developed as a potential treatment for patients whose depression has not responded to existing therapies.

The company said: “Alto intends to use the proceeds from the offering, together with its current cash and cash equivalents, to accelerate and expand the clinical development of ALTO-207, including to conduct an additional planned Phase 3 trial of ALTO-207 as monotherapy for the treatment of treatment-resistant depression, and for general working capital purposes.”

The financing strengthens Alto’s balance sheet as it prepares for another late-stage clinical study. Raising additional capital before initiating a Phase 3 programme can help reduce development risk by ensuring sufficient funding for patient recruitment, trial operations and associated regulatory activities.

The offering was led by EcoR1 Capital and included participation from both new and existing specialist healthcare investors, reflecting continued interest in companies developing therapies for central nervous system disorders.

BofA Securities, Stifel, William Blair and Baird acted as joint book-running managers for the offering, while Jones acted as co-manager.

The shares are being offered under Alto’s existing shelf registration statement filed with the US Securities and Exchange Commission.

The latest financing gives Alto greater flexibility to advance ALTO-207 through late-stage clinical testing at a time when investment in neuroscience has become increasingly selective. If successful, the additional Phase 3 study could support the company’s efforts to bring a new treatment option to patients living with treatment-resistant depression.