Alto Neuroscience Board Sued Over Study Result, 70% Stock Drop

Alto Neuroscience Inc. top officers and board members overhyped its antidepressant candidate before the biopharmaceutical company released disappointing trial results and had a 70% stock drop, a shareholder lawsuit said.

Alto’s initial public offering paperwork overstated the effectiveness and prospects for a major depressive disorder drug, ALTO-100. The company continued misleading shareholders about its abilities to treat MDD for almost another nine months, said the shareholder derivative complaint filed Tuesday in the US District Court for the Northern District of California.

Alto then said on Oct. 22, 2024, that ALTO-100 didn’t “demonstrate a statistically significant improvement in depressive symptoms ...