Cognition Therapeutics Q4 2024 Earnings Call Transcript

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March 20, 2025

There are 8 speakers on the call.

Operator

Welcome to the Cognition Therapeutics Fourth Quarter and Full Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr.

Operator

Mike Moyer with LifeSci Advisors. Thank you. You may begin.

Speaker 1

Thank you, operator, and good morning, everyone. Welcome to Cognition Therapeutics' fourth quarter and year end twenty twenty four results conference call. With me today are Lisa Ricciardi, President and Chief Executive Officer John Doyle, Chief Financial Officer and Doctor. Tony Caggiano, Chief Medical Officer. This morning, the company issued a press release detailing its twenty twenty four fourth quarter and year end results.

Speaker 1

We encourage everyone to read this morning's press release as well as Cognition's annual report and Form 10 ks, which is now filed with the SEC and available on our website. In addition, this conference call is being webcast through the company's website and will be archived for thirty days. Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that during this call, management will be making forward looking statements. Actual results could differ materially from those stated or implied by these forward looking statements due to the risks and uncertainties associated with the company's business.

Speaker 1

These forward looking statements are qualified by the cautionary statements contained in Cognition's press releases and SEC filings, including its annual report on Form 10 K and previous filings. This conference call contains time sensitive information that is accurate only as of the date of this live broadcast. Cognition undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this conference call. With that, I would like to now hand the call over to Lisa Bershardi.

Speaker 2

Hi, thank you and good morning everyone. Cognition Therapeutics' focus is the development of zirvinecine for patients with Alzheimer's disease and dementia with Lewy bodies, which I'll refer to as DLB. For clarity, zirvinecine is the USAN or the generic name for our lead candidate CT1812. Last year, we reported data from two studies in both patient populations, and the results showed strong efficacy signals, making it clear that zirimizine has the potential to bring great value to patients and their care partners and we believe to investors as well. Many of you are wondering what are the next steps to advance daromizine into registrational trials.

Speaker 2

Our clinical development our clinical operations and development teams are working to prepare final study documents from both trials. To be clear, these are very large dossiers. They need to be compiled, reviewed and cross checked. And when we're satisfied with these documents, we will submit them to the FDA along with requests for two different end of Phase II meetings, one for Alzheimer's and one for DLB. At the same time, we're having discussions with advisors to ensure that we are as prepared as possible when approaching the FDA.

Speaker 2

Now let's talk about capital allocation. We decided to conclude our DRY AMD Phase II DRY AMD study before its completion. The reduced expense extends our runway and now 100% of our attention and resources are allocated to our Alzheimer's and DLV programs. Let me be clear, the decision to conclude the DRY AMD study was not due to any safety concerns. Quite the contrary, our clinical research organization partner conducted an analysis of the MASQ data.

Speaker 2

This type of analysis is referred to as a futility study and it is used to determine if an experimental drug has signals of efficacy during a clinical trial. We reported that we had indeed passed the analysis which supports the potential of zirpimizine in patients with dry AMD. However, we felt then and we still believe that the decision to conclude the dry AMD study was necessary for the success of our Alzheimer's and DLV programs. Zervipizine has shown clear activity in these two large patient populations and there is such a clear need for new, effective, convenient drugs in both Alzheimer's and Lewy body dementia. Therefore, we intend to discuss with the FDA plans to pursue each indication in separate studies.

Speaker 2

Now we are not naive about the significant capital needed to fund these studies. We have an active business development program ongoing. We've built strong relationships with biotech and pharma players in this space since we began as a company. We have conducted a number of fruitful meetings since the beginning of the year updating interested parties on the data from SHYNE and SHYMUR. The ideal scenario would be to find a partner to work with on the development and registration program and in the process obtain non dilutive funding for one or both indications.

Speaker 2

There's nothing I can confirm today and I have no guarantee that we're going to sign a deal, but I am confident we will find a path forward with funding. We are evaluating all our options to finance our clinical development efforts. In addition, beyond securing capital, we're making strides to ensure we're Phase three ready. Our CMC team has developed a novel chemical process for the manufacturer of zimidosine. Provisional patent applications covering this chemical process have been filed.

Speaker 2

We expect that this manufacturing process will produce materials sufficient for future clinical studies and if zirvinecine is approved, we expect it will support commercial manufacturing needs. On that same front, we're working with the domestic CMO or contract manufacturing organization that will be capable of producing commercial quantities of zirvinecine. With that, John Doyle will review our financial results and provide color around our cash position and capital requirements. John?

Speaker 3

Thank you, Lisa. We made the strategic decision in January 2025 to voluntarily conclude our Phase II MAGNIFY study in DRY AMD. This pipeline prioritization will result in cost savings that we expect will extend our cash runway into the fourth quarter of twenty twenty five. This allows us to focus our resources entirely on our Alzheimer's and DLV programs. During 2024, we use one of the tools we have at our disposal, our at the market or ATM facility with B.

Speaker 3

Riley Securities. For the year ended 12/31/2024, we sold almost 20,000,000 shares of our common stock for gross proceeds of approximately $12,800,000 Now let's proceed to the financials for the fiscal year twenty twenty four. Cash and cash equivalents as of 12/31/2024, were approximately $25,000,000 and total obligated grant funds remaining from the NIA were $50,000,000 As indicated earlier, we estimate that we have sufficient cash to fund operations and capital expenditures into the fourth quarter of twenty twenty five. Research and development expenses were $41,700,000 for the year ended 12/31/2024, compared to $37,200,000 for 2023. This increase was primarily related to higher cost associated with activities underway to complete two Phase II trials.

Speaker 3

General and administrative expenses were $12,300,000 for the year ended 12/31/2024, compared to $13,500,000 for 2023. The decrease was primarily related to lower equity based compensation and professional fees. The company reported a net loss of $34,000,000 or $0.86 per basic and diluted share for the year ended 12/31/2024, compared to a net loss of $25,800,000 or $0.86 per basic and diluted share for 2023. Lisa?

Speaker 2

Thank you, John. I want to take this opportunity to address the question of NASDAQ compliance. As many of you saw last week, we were granted a six month grace period to come back into compliance with NASDAQ's minimum bid requirement. This means our stock has to close above $1 for ten days consecutively before 09/08/2025. We are confident we will regain compliance during the allotted time.

Speaker 2

We have multiple milestones coming up that we believe will drive value in the stock. Expect to hold two Phase two end of Phase two meetings with the FDA for Alzheimer's disease and Lewy body dementia, gaining clarity on our clinical programs going forward. And we anticipate having announcements about partnering or other sources of funding. Now I'll turn the call back to the operator who can open the call to questions. We'll begin with the sell side and then take questions from recent conferences.

Operator

Thank Our first question comes from the line of Mayank Mamtani with B. Riley Securities. Please proceed with your question.

Speaker 4

Yes. Good morning, team. Thanks for taking our questions and appreciate the detailed update. As you prep for the end of Phase II FDA meeting, do you have any latest thoughts on the tau cutoff threshold that you might be thinking about based on the SHINE study learnings? And also if you could comment on implications of that biomarker to the ongoing Phase II early AD study and if there's any update on enrollment for that early AD study would be helpful too?

Speaker 4

And then I have a follow-up.

Speaker 5

Yes, sure. Hi, Mayank. It's Tony Cadiano. Yes, so we certainly are planning to do an enrichment of participants in the next study for those who have built lower tau. We haven't announced exactly what that level is going to be, but it'll be very, very similar to what we used in the SHINE study.

Speaker 5

Now we're looking at the data and we're looking at databases and our collaborators' databases around what we would expect in the population and then making cuts to see where the effects are most robust and where that best number would be. But we haven't landed on a specific number, but you can expect it to be very similar. So and then relating to the early AD study, we haven't made any announcements as to how we're progressing in that study. It is still continuing to recruit. Now there you had asked about whether there is a particular cut around tau in that study.

Speaker 5

So in that study, there is not. So understand this is a different population of people with Alzheimer's disease. These are folks at the early end of the spectrum. So inherently, what's going to be enriched with those who have a slightly lower tau anyway, but that's not part of that study.

Speaker 4

Thank you. And then on SHIMR data that was presented at a recent conference, are you able to share any investigative physician feedback that you came away with? And also obviously, interested in what sort of next steps in terms of publication strategy that you may have there in DLD, because obviously not a lot going on there. And if you're able to just maybe update us on how corporate development activity could look like, if it's a same partner interested in both indications? Or do you think one indication could be more sort of manageable by a company your size versus maybe another indication being pursued by a larger company?

Speaker 4

We would love to hear your thoughts on that. And thanks again for taking the question.

Speaker 2

Maayan, good morning. Thank you. We don't have any updates on partnering. We have lots of interest in different forms. You alluded to several, one indication, both indications.

Speaker 2

So when a deal is concluded, we will make that announcement and we're talking to all the interested parties. With regard to feedback, what I can tell you is we have excellent feedback from KOLs, from people we were with in the international conference in Amsterdam, from surveys we've done of neurologists and from payers. So as we are approaching the coming days, we'll make more of that information public in various ways. But I can tell you it is consistently strong feedback where KOLs are and others, payers in particular identifying the fact there are great needs. This is a convenient drug.

Speaker 2

They appreciate the safety profile. Patients don't have many options out there. It's all the kind of feedback we would have hoped to receive and it's very, very consistent. With regard to the publication, I'll turn that back to Tony.

Speaker 5

Sure. So the publication is already underway. Obviously, it's a long cycle, right? So the preparation will take a little bit and then there's a submission review, revision and publication, but it's underway and hopefully will be out in the next many, many months.

Speaker 4

Understood. Thanks again.

Operator

Thank you. Our next question comes from the line of Daniel Gautaulin with Chardan Capital. Please proceed with your question.

Speaker 6

Hey, good morning guys. Thank you for taking my question. I have one for DLB, specifically similar to the Alzheimer's program. Are you looking at any biomarkers or any specifying any biomarkers to try to increase the probability of success of that program in the pivotal studies?

Speaker 5

Yes. Hi, this is Tony again. Good question. Right now, we don't have any definitive enrichment strategy. The good news is we saw really good robust response across all the people that we recruited regardless of how we looked at it, whether it's age, gender, amyloid status, alpha synuclein status, whether they were on dopamine related drugs, whether they were on acetylcholinesterase related drugs.

Speaker 5

So the good news is, we believe across the spectrum of people with DLB, we expect to see a good response.

Speaker 6

Got it. Thank you. And then with respect to dosing, so when you reported the news about GA and I think you had a green light from DSMB, was that for two hundred milligram dose? And thinking about the dose for pivotal studies for AD and DLB, what are your current thinking? Are you leaning towards one hundred or two hundred?

Speaker 5

We haven't selected an exact dose yet. Most likely we will be operating below three hundred milligrams. And the reason for that is when you look at the data, you'll see we had a really nice robust response that's nearly identical for the one hundred and three hundred milligram dose group, which means we can get the full effect of the drug. And then obviously the less drug you're using the fewer troublesome side effects you'll have. So we'll be exploring doses below three hundred, but we haven't come to agreement exactly what that dose will be.

Speaker 5

Obviously, that'll be part of our end of Phase two meeting where you justify the dose and you propose how it'll be designed, physical analysis and so forth. So we'll have an announcement once that meeting is done as to agreement on the exact plan.

Speaker 7

Got it. All right.

Speaker 6

Thank you guys. Appreciate you taking the questions.

Operator

Thank you. Our next question comes from the line of Ram Selvaraju with H. C. Wainwright. Please proceed with your question.

Speaker 7

Good morning. This is Dan on for Ram. Thanks for taking our questions. We were wondering what does the competitive landscape in DOB look like? And recognizing your plans to meet with the FDA regarding zhubanecin, what are your thoughts around the potential probability of it in DLB based on neuropsychiatric parameters?

Speaker 7

And I'd like to ask a follow-up if I could.

Operator

Sure. Tony?

Speaker 5

Yes. The neuropsychiatric symptoms that you mentioned are a key or a core symptom of the disease. So we're very confident that physicians and FDA will be interested in this. Unlike Alzheimer's disease where there's guidance on like a cognitive outcome with a functional outcome that doesn't exist for DLB. So a strong emphasis of our FDA meeting will be around which of the outcome measures we will propose, how they'll be ordered, whether they'll be standalone or co primary or composite outcomes.

Speaker 5

So that's exactly what that meeting will be about. And again, once we have that meeting and have agreement and understand what that study will look like, there'll be an announcement.

Speaker 7

Awesome. And then what are the outlooks in Europe versus The United States for accelerated approval in anti Alzheimer's drugs? And what are your thoughts for more near or medium term grant funding given the reported NIH cutbacks? Thank you.

Speaker 5

So right now, we are primarily pursuing a very traditional path, right, of Phase three studies that are adequately sized, well controlled, either two studies, a supportive study and a single pivotal or two parallel studies. The accelerated pathway in Alzheimer's disease, as you know, has been interesting, right, following Biogen and then now with successes from Acy and Lilly. And given our ability to clearly measure what are meaningful clinical outcomes, our path is to follow those traditional outcomes and seek a traditional approval. Now in Europe, we haven't seen that it's any easier to get an approval or so again, we plan to follow a very traditional pathway.

Speaker 2

And then with regard to the NIH funding, John mentioned we have a $50,000,000 balance of funding and that supports our START trial in early stage patients. All of our other trials were funded by the NIH or the NIA within the NIH and those trials have completed and we're very confident that this final balance will be available to us. Like everyone else, we're watching what's going on. We're learning on a real time basis, but we believe we'll have access to those funds to finish the trial. As for your other question about new grants, it's our understanding that by the time you're into Phase three programs, you have the ability to reach other sources of funding the capital markets, partnerships, etcetera, and that the funding vehicles we've seen so far are really geared toward earlier stage programs.

Speaker 2

So I would say we don't anticipate more grant funding from the NIA. It's possible. We'll certainly try, but I think it's a lower probability now than when we were an earlier stage company.

Speaker 4

Awesome. Thank you.

Operator

Thank you. That concludes our questions over the phone. I'll turn the floor back to Ms. Rishardy for any final comments.

Speaker 2

Great. I'm just looking at some prior questions we were asked. John addressed the question about the ATM, how we have an ATM in place. We've addressed planning for Phase three trials in AD and DLB. Someone had previously asked us why are you not starting your Phase three trials yet and I think we've covered it on this call.

Speaker 2

You prepare an enormous dossier, You sit with the agency. You review your protocol. From there, by identifying your funding, you're good to go. You have a plan and a source of funding to complete it. And last, with regard to partnerships, as we said earlier, we're very actively involved in that process.

Speaker 2

And when we have something that we can announce, we will. What I would like to conclude with is saying we have FDA meetings coming this year. While there are challenges ahead in terms of financing our studies, we're committed to meeting these challenges. We're positioned to achieve and deliver on multiple clinical milestones and we're focused on creating long term value for our shareholders as we create important new medications. As always, we want to thank study participants and their caregivers, our investors as well as supporters at the NIA, Michael J.

Speaker 2

Fox, the ADVF, our CRO partners and our team. Without all of these groups, we'd not be where we are today developing new medicines for neurodegenerative diseases. Thank you, operator. That concludes our call.

Operator

Thank you. Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

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