Cognition Therapeutics, Inc. (NASDAQ:CGTX) Q4 2023 Earnings Call Transcript
Cognition Therapeutics, Inc. (NASDAQ:CGTX) Q4 2023 Earnings Call Transcript March 26, 2024
Cognition Therapeutics, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Hello, everyone, and welcome to Cognition Therapeutics Fourth Quarter 2023 Earnings Call. Please note that this call is being recorded. I’d now like to hand over to our first speaker for today, Mike Moyer. Please go ahead.
Mike Moyer: Thank you, Operator, and good morning, everyone. Welcome to the Cognition Therapeutics fourth quarter and year-end 2023 results conference call. With me today are Lisa Ricciardi, President and Chief Executive Officer, John Doyle, Chief Financial Officer, and Dr. Tony Caggiano, Chief Medical Officer. This morning, the company issued a press release detailing its 2023 fourth quarter and year-end results. We encourage everyone to read this morning’s press release, as well as Cognition’s annual report on Form 10-K, 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 30 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. These forward-looking statements are qualified by the cautionary statements contained in Cognition’s press release and SEC filings, including its quarterly report on Form 10-Q 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 now like to hand the call over to Lisa Ricciardi.
Lisa Ricciardi: Mike, thank you. Good morning, everyone. Welcome to Cognition Therapeutics earnings conference call covering our 2023 results and highlights from recent weeks. On today's call, John Doyle and I will share prepared remarks on the company's progress, and then we'll be joined by Dr. Tony Caggiano, our Chief Medical Officer and Head of R&D, to take your questions. Cognition's focus is the development of innovative, orally available drug candidates targeting age-related degenerative diseases of the central nervous system and retina. Our current clinical programs build on our expertise in the sigma-2 receptor, which regulates cellular functions disrupted by neurodegenerative diseases. Our drug candidate - our leading drug candidate is currently in the clinic being tested for Alzheimer's disease and dementia with Lewy bodies, also referred to as DLB.
Within Alzheimer's disease, we're studying both early-stage patients and patients with mild to moderate disease. We're also studying CT1812 in geographic atrophy second to dry age-related AMD or dry AMD as it is known. Modulating the sigma-2 receptor complex with a brain penetrant small molecule drug candidate is a unique approach, differentiated from other companies developing treatments in both neurodegenerative and ophthalmology diseases. Now, an update on our trials. Our SHINE study is a Phase 2 clinical trial of CT1812 that completed enrollment of 153 patients with mild to moderate Alzheimer's disease. Patients were randomized one to one to one to receive placebo or oral doses, 100 or 300 milligrams of drug. We expect topline data mid 2024 after the last patient has completed six months treatment, and we anticipate presenting our more detailed findings at the Alzheimer's Association International Conference or AAIC meeting later in the summer.
Now, the question at the forefront of everyone's mind, of course, is, what would we consider to be a success in SHINE? As an objective measure, we consider the results from the most recently approved disease-modifying antibody, intravenous infusion therapy Lecanemab, in which treated participants had a 1.4 point difference in ADAS-cog14 over 18 months, and we exceeded this in our preliminary analysis of the first 24 patients in SHINE, where we saw a three point difference in the slowing of cognitive decline compared to placebo on the ADAS-cog11 just after six months. Results similar to our preliminary analysis of the initial 24 patients would represent a clinically meaningful outcome. Endpoints in SHINE include safety, changes in cognitive and functional scores, including the ADAS-cog11, the neuropsych test battery, the ADCS activities of daily living.
In addition, we would look to corroborate CT1812 biological activity and its brain penetrant target engagement through the analysis of biomarkers. Before moving on, I would like to acknowledge the support of our study participants and their caregivers, our clinical trial investigators, CRO partners and collaborators at the NIH National Institute of Aging. We look forward to seeing the full study results later this year. And let me turn to our SHIMMER study, a Phase 2 US-based trial of CT1812 in mild to moderate dementia with Lewy bodies or DLB. An estimated 1.4 million people are affected by DLB, making the disease the second most common form of dementia. There are no currently approved treatment options, and few drugs are being studied for this condition.
Now, we know from the literature that more than half of DLB patients are estimated to have both amyloid-beta and alpha-synuclein ligamers in their brain. CT1812 has been shown to protect neurons from the toxicity of both amyloid-beta and alpha-synuclein pathogenic proteins, and thus it has the potential to treat this sizable population of DLB patients with copathology. The SHIMMER trial is also supported by non-dilutive funding from the NIA, and is being led by Dr. Jim Galvin, our primary investigator at the University of Miami School of Medicine, as well as the Lewy Body Dementia Association, or LBDA, whose centers of excellence are among the sites enrolling patients. We aim to complete enrollment and present topline data in the second half of the year.
Again, we extend our thanks to patients, caregivers, our clinical trial investigators, our CRO partners, and the NIH NIA. The prior trials I've discussed are being run in a mild to moderate patient population. Our START trial is a 540-patient Phase 2 study of CT1812 in adults with early Alzheimer's disease in collaboration with the Alzheimer's Clinical Trial Consortium or the ACTC. The START trial is measuring the efficacy and tolerability of CT1812 in subjects with mild cognitive impairment or early disease who have elevated amyloid beta. We received grant support totaling $81 million for this trial from the NIA, and we are very pleased to join forces and collaborate with the ACTC. In 2023, we initiated site activations and the START trial is now actively recruiting from centers of excellence within the ACTC network.
We and our collaborators on this study made the decision to allow participants on stable background therapy with Lecanemab to enroll and start. We believe this decision will provide real world evidence of CT1812 in combination therapy. I'll now turn to our opportunity for CT1812 in ophthalmic conditions, specifically dry AMD and geographic atrophy. Dry AMD is estimated to account for up to 90% of the population with age-related macular degeneration. The advanced form of the disease, known as geographic atrophy, can lead to progressive and permanent vision loss, and an estimated 1 million people in the US have geographic atrophy. Now, looking at this opportunity, we have evidence from genome-wide studies, from preclinical studies, from clinical biomarker data, as well as from results of our Alzheimer's studies that demonstrates treatment with CT1812 may have a beneficial impact on the proteins implicated in dry AMD.
The MAGNIFY study is a randomized, placebo-controlled Phase 2 trial, expected to enroll approximately 240 people who have been diagnosed with dry AMD with measurable geographic atrophy. Over the treatment period, change in GA lesion size, as well as other measures of safety and efficacy, will be assessed to determine if CT1812 can slow macular degeneration. In addition, we have added measures of visual change to assess the impact of our drug on vision. We believe the level of interest investigators and participants have shown in the MAGNIFY trial indicate that an effective oral treatment option will be well received. And as more treatment options become available, we believe ophthalmologists will move towards combination therapies. Might our drug be synergistic with complement approaches?
This is to be determined. Beyond our clinical trial work, our scientific and medical teams have been active in 2023. Cognition scientists published two manuscripts and made 11 presentations at medical and scientific congresses this past year. The scientific evidence generated by our team has continued to support our clinical development efforts, providing insights into proteins and biological processes impacted by CT1812 in Alzheimer's, Parkinson's disease, and dry AMD. In closing, I'm proud of the progress we have made in advancing CT1812 toward important value-driving milestones for 2024. We believe that CT1812 can be an important part of the developing paradigm for dementia treatment, and we are unwavering in our commitment, developing new therapies for neurodegenerative diseases.
With that, I turn the call to John Doyle to review our financial results.
John Doyle: Thank you, Lisa. During 2023, we continued to execute with financial stewardship. We officially managed our resources and leveraged our grant funding and our at-the-market offering facility with Cantor Fitzgerald and B. Riley Securities to support our clinical programs. Recently, we concluded a new $11.5 million underwritten public offering that is expected to provide funding for our existing clinical trials and bolster our balance sheet by extending cash runway through May 2025. With that context, let us now proceed to the financials for the fiscal year 2023. Research and development expenses were $37.2 million for the year ended December 31st, 2023, compared to $30.3 million for 2022. The increase was primarily related to higher costs associated with Phase 2 trial activities with contract research organizations, personnel, and preclinical research, partially offset by decreased manufacturing costs.
General and administrative expenses were $13.5 million for the year ended December 31st, 2023, compared to $13.2 million for 2022. The increase was primarily related to higher employee compensation and benefits, driven by increased headcount and equity-based compensation, partially offset by decreased director and officer liability insurance and other expenses. The company reported a net loss of $25.8 million or $0.86 per basic and diluted share for the year ended December 31st, 2023, compared to a net loss of $21.4 million or $0.91 per basic and diluted share for 2022. Cash and cash equivalents as of December 31st, 2023, were approximately $29.9 million, and total grant funds remaining from the NIA were $67.5 million. I will now turn the call back over to the operator who can open the call for questions.
Operator?
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