Please ensure Javascript is enabled for purposes of website accessibility

Why Alector Shares Are Diving Today

By Eric Volkman – Sep 8, 2021 at 3:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There has been a major shakeup in the C-suite.

What happened

Having dropped from the lofty heights it reached only a few short months ago, Alector (ALEC -0.57%) stock was having another bad day on Wednesday. The biotech's shares were down nearly 17% in mid-afternoon trading following some news from the C-suite.

So what

After market hours on Tuesday, Alector announced the departure of two high-level executives. It said that chief operating officer Shehnaaz Suliman and chief medical officer Robert Paul will step down following a "transition period," and should continue to serve as advisors to the company until the end of this year.

Roadside exit sign.

Image source: Getty Images.

Suliman has ambitions to head a company. She said in a statement she is "looking forward to pursuing a future chief executive leadership role with a focus on advancing groundbreaking scientific insights into viable treatments" that can improve the lives of patients.

The company didn't provide any reasons for Paul's departure. His interim replacement will be the company's current senior vice president of clinical sciences, Sam Jackson. No replacement for Suliman has yet been named.

Alector is a busy company. The clinical-stage biotech currently has four immuno-neurology treatments in development. In July, Alector signed a splashy co-development deal with big pharmaceutical company GlaxoSmithKline that could be worth up to $2.2 billion.

Now what

Alector still feels like a company well on the move, which is why the latest news was so disquieting. It's always a concern when a business that seems destined for success is hit by more than one executive departure in a short span of time. Hopefully for Alector and its investors, this is not indicative of deep problems with the company's corporate culture or morale.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends GlaxoSmithKline. The Motley Fool has a disclosure policy.

Stocks Mentioned

Alector  Stock Quote
Alector
ALEC
$8.64 (-0.57%) $0.05
Gsk Plc Stock Quote
Gsk Plc
GSK
$35.97 (-1.72%) $0.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.