Citi: Alector (ALEC. US) with GlaxoSmithKline (GSK. US) partnership was a significant positive, maintaining a "Buy" rating and raising its price target to $43

Clinical-stage biotechnology company alec.us has been in the headlines recently. The company is currently worth $3.1 billion, and its stock price has soared 89% in the last 5 days and 153.2% in the past 6 months. On Tuesday, the company's shares surged 12 percent to close at $39.44.

Alector's recent share price rally may have been due to Citigroup analyst Neena Bitritto-Garg raising its price target for the company. Analysts said Alector's recent partnership with gsk.us was "very positive" for the company. She remains optimistic that the al001/al101 clinical programs they are working with will be fully funded, while maintaining the alpha "buy" rating and raising the price target from $31 to $43. That means the company could rise 9 percent over the next 12 months.

On July 2, Alector and GlaxoSmithKline announced a global strategic partnership to jointly develop monoclonal antibodies al001 and al101, which enhance the precursors of granulin, for the treatment of a range of neurodegenerative diseases, including frontotemporal lobe dementia, amyotrophic lateral sclerosis, Parkinson's disease and Alzheimer's disease.

Under the partnership agreement, Alector will receive an advance payment of $700 million, while Alector will be eligible for additional milestone payments related to clinical development, regulatory and commercial releases of up to $1.5 billion. Alector will lead the global clinical development of AL001 and AL101 through Phase 2 clinical proofs of concept. Thereafter, Alector and GlaxoSmithKline will share responsibility for the development of all late-stage clinical studies of al001 and al101, and all costs of global development will be shared between the two parties.

The two parties will be jointly responsible for commercialization in the United States and share the profits. Alector will lead the commercialization of AL001-related orphan indications, and GlaxoSmithKline will lead the commercialization of AL101 in Alzheimer's and Parkinson's disease. Outside the U.S., GlaxoSmithKline will be responsible for the commercialization of AL001 and AL101, and Alector will be eligible for tiered royalties.