Cognition Therapeutics - Q2 2024

Transcript

Operator (participant)

Thank you for standing by. At this time, we would like to welcome you to the Cognition Therapeutics Second Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to Tom Johnson. Please go ahead.

Tom Johnson (Head of Investor Relations)

Thank you, operator, and good morning, everyone. Welcome to the Cognition Therapeutics Second Quarter 2024 Results Conference Call. With me today are Lisa Ricciardi, President and Chief Executive Officer, John Doyle, Chief Financial Officer, and Tony Caggiano, Chief Medical Officer. This morning, the company issued a press release detailing its financial results for the second quarter and first half of the 2024 fiscal year. We encourage everyone to read this morning's press release, as well as Cognition's quarterly report on Form 10-Q, annual report on Form 10-K, and periodic reports on Form 8-K, which are 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 by 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 risks and uncertainties associated with the company's business. These forward-looking statements are qualified by cautionary statements contained in the Cognition press release and SEC filings, including its quarterly report on Form 10-Q and previous filings. This conference call contains time-sensitive information, which is accurate only 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 hand the call over to Lisa Ricciardi. Lisa?

Lisa Ricciardi (CEO)

Thank you, Tom, and good morning, everyone. We appreciate your participation in Cognition Therapeutics Financial Results conference call. Today, our CFO, John Doyle, and I will share prepared remarks on the company's progress and financial performance over the first half of the year. After which, we'll take your questions. For Q&A, we'll be joined by our Chief Medical Officer and Head of R&D, Dr. Tony Caggiano. At Cognition Therapeutics, our focus is on the development of innovative, orally available drug candidates targeting age-related degenerative conditions of the CNS and retina. Our clinical programs include multiple Phase 2 trials for both early and mild to moderate Alzheimer's disease. We are also studying CT-1812 in dementia with Lewy bodies and geographic atrophy secondary to dry AMD.

Now, during today's call, my formal remarks will be on the completed SHINE trial, and then on our next study to read out, the SHIMMER trial. Let's begin with SHINE. Our SHINE study was a phase II clinical trial, proof-of-concept study of CT-1812 in mild to moderate Alzheimer's disease. This was our first proof-of-concept study. The trial enrolled a total of 153 adults with mild to moderate Alzheimer's disease. Participants were randomized to receive either placebo or oral doses of 100 or 300 milligrams of CT-1812, and there were 51 participants in each arm of the study. Our primary purpose was to assess safety and tolerability after six months of daily dosing. We also evaluated multiple cognitive endpoints, including the ADAS-Cog 11, ADAS-Cog 13, cognitive composite, and the MMSE. Functional improvement scales were included, as were biomarker analyses.

In this study, participants who were treated with CT-1812 for six months showed a consistent trend in slowing cognitive decline compared to placebo across all cognitive measures, the ADAS-Cog 11 and 13, cognitive composite, and MMSE. On the most commonly used measures, the ADAS-Cog 11 and 13 scales, CT-1812-treated participants showed a 39% slowing of cognitive decline after six months. To put SHINE results into context, the recently approved monoclonal antibodies demonstrated 25%-30% slowing in an early patient population over 18 months. We were very encouraged by the 39% slowing in six months with a once-daily pill. Now, furthermore, on the ADAS-Cog 11 and MMSE scales at day 98, the midpoint of the study, in the combined 100 and 300 mg dose group, p-values of less than 0.05 were observed.

Putting the full SHINE data readouts in context, in the completed trial, participants on placebo in the intent-to-treat analysis worsened by 2.7 points as measured by ADAS-Cog 11. In the pooled 100 and 300 milligram dose group, there was a reduction of 1.66 points or a 39% slower loss of cognition than in the placebo group. Said another way, CT-1812 rescued about 40% of the cognitive decline that participants could have experienced.... In this trial, we used the functional measures of the ADCS-ADL, or Activities of Daily Living, and the ADCS-CGIC, the Clinical Global Impression of Change. CT-1812 demonstrated a slowing of loss of function towards the latter part of the trial. With 150 people enrolled, or approximately 50 people per arm, the SHINE trial did not achieve statistical significance on the ADAS-Cog 11 scale.

However, this is the important part: the multiple measures we assessed show a consistency across time and dose that is positive. It is this consistency that motivates us to look ahead to longer and larger trials. With regard to safety, CT-1812 demonstrated a favorable safety and tolerability profile, with most treatment adverse events being mild or moderate. The AEs were consistent with previous clinical experience. There was one case of asymptomatic ARIA-H, and no cases of ARIA-E. At the 300 milligram dose, nine participants experienced treatment-emergent LFT increases greater than 3 times the upper limit of normal. These resolved after cessation of drug without evidence of serious liver injuries. Importantly, there were no LFT elevations observed in the 100 milligram dose. This data is all publicly available on our website. We are continuing to analyze the exploratory CSF biomarker program data.

The study showed significant change in neurofilament light, or NfL, and this is a marker of neurodegenerative disease. This occurred at the 300 milligram dose. We believe that this is evidence CT-1812 acts as a synaptoprotective agent. Other CSF biomarkers assessed include neurogranin, synaptotagmin, SNAP-25, p-tau, total tau, and GFAP. We'll share more in the future as we continue analyzing biomarker data from this trial. Taken in total, we believe these findings provide evidence that the amyloid oligomer antagonism, a new and distinct mechanism for therapeutic intervention, may have a role as a monotherapy or a drug in treatment used in combination with approved drugs for the treatment of AD and other dementias. We met our key objectives of assessing safety, tolerability, and cognitive and functional changes.

We learned that the 100 milligram dose showed good efficacy and had no incidence of elevated liver enzymes or discontinuations due to AEs. There were no new safety signals in the SHINE trial. We had a strong and consistent trend demonstrating potential efficacy at slowing cognitive decline in patients with mild to moderate disease. We believe the magnitude of effect is consistent with other drugs recently developed and approved. We believe the biomarker data supports the true slowing of neurodegeneration. While in Philadelphia last week at the AAIC conference, we had the opportunity to speak with multiple physicians and PIs from the SHINE trial. They were very supportive of the trial results, and particularly the consistency of cognitive changes across the scales. They valued the new safety information and profile of the 100 milligram dose group.

Consistent with feedback from various investors, our PIs are interested in the next steps in terms of a new trial: duration, dose, patient population, endpoint, and trial size. We also know that pharma groups, having winnowed CNS programs over the years, are now looking to add to their portfolios important CNS drugs. For many, Alzheimer's disease is a top target. We are looking forward to continuing our dialogue with these companies. Our next step is to convene a panel of leading neurologists to review our data, assess the findings, and discuss their thinking on next steps in CT-1812 drug development. I would like now to turn to the SHIMMER study, which is our next data readout. This phase ii trial with CT-1812 enrolled 130 people with mild to moderate dementia with Lewy bodies, or DLB.

As a reminder, there are an estimated 1.5 million people in the U.S. affected by DLB, and this disease is the second most common form of dementia. These patients are characterized by dementia, mobility issues, visual and sensory hallucinations, and significant GI issues. There are no currently approved treatment options. From a pathological perspective, more than half of the DLB patients are estimated to both have alpha-synuclein and A-beta oligomers in their brain. We believe that CT-1812, with its novel mechanism of action, protecting neurons from the pathogen, from the toxicity of both pathogenic proteins, has the potential to treat DLB patients. This is a double-blind, randomized, three-arm study. Patients are randomized 1:1:1, with 100 or 300 milligrams of CT-1812 or placebo. This study is not powered to show significance.

It is designed as a proof-of-concept study to determine the change in the MoCA, if that is the Montreal Cognitive Assessment Scale, after six months of receiving CT-1812 or placebo. This trial is supported by non-dilutive funding from the NIH, and the trial is being led by Dr. James Galvin from the University of Miami Miller School of Medicine. We have completed enrollment, and we expect to report top-line results by year-end. We believe the SHIMMER trial results will add to the understanding of CT-1812's potential for treating neurodegenerative disease. As with AD patients in the SHINE trial, we look forward to providing patients and caregivers an effective, convenient option to slow the progress of DLB. Now, a word about our other two trials. In brief, our START, START trial is actively recruiting participants with early Alzheimer's disease.

Participants on stable background therapy with lecanemab and donanemab will be allowed to enroll in the trial, and we expect this will allow us to provide real-world evidence of CT-1812's potential as monotherapy and in combination with monoclonal antibody treatments. We're also actively enrolling participants in our MAGNIFY study. This is a randomized, placebo-controlled, phase II study of 240 participants who have dry age-related macular degeneration and measurable geographic atrophy. Over the treatment period, change in lesion size and best-corrected visual acuity will be assessed to determine if CT-1812 can slow vision loss. Now, during this past year, Cognition scientists published multiple manuscripts and made at least nine presentations at medical and scientific conferences. All the publications are available on our website.

Importantly, the scientific evidence generated by our team has continued to support our development efforts, providing insights into proteins and biological processes impacted by CT-1812 in neurological and dry AMD and ophthalmology conditions. In closing, in 2024, we have made significant progress advancing CT-1812, and we believe this drug has the potential to be an important part of the developing paradigm for dementia treatment. With that, I turn the call over to John Doyle for a review of our results.

John Doyle (CFO)

Thank you, Lisa. For the first half of 2024, we continued to execute with financial stewardship by efficiently managing our resources and leveraging NIA grant funding to support our clinical programs. As of June 30, 2024, our cash and cash equivalents were approximately $28.5 million, and total grant funds remaining from the NIA were $57.3 million. The company estimates that it has sufficient cash to fund operations and capital expenditures into the second quarter of 2025. Research and development expenses were $11.6 million for the second quarter and then June 30, 2024, compared to $8.5 million for the comparable period in 2023. This increase was primarily related to higher costs associated with advancing our clinical programs, including phase 2 trial activities with contract research organizations and personnel costs.

General administrative expenses were $3.1 million for the second quarter and to June 30, 2024, compared to $3.3 million for the comparable period in 2023. The decrease was primarily related to lower professional services. The company recorded a net loss of $7 million, or $0.18 per basic and diluted share for the second quarter, and the June 30, 2024, compared to a net loss of $4.7 million, or $0.16 per basic and diluted share, for the same period in 2023. I'll now turn the call back over to the operator, who can open the call to questions. Operator?

Operator (participant)

The floor is now open for your questions. So to ask a question this time, please press star one. We're going to pause for just a moment to compile the Q&A roster. First question comes from Charles Duncan from Cantor Fitzgerald.

Elaine Kim (Biotech Equity Research Associate)

Hi, this is Elaine Kim on for Charles Duncan. Thank you for taking our questions. So in the SHINE trial, the 100 mg dose did not meaningfully alter the A-beta 40 and 42 levels, while the 300 mg did. But would the changes with the 100 mg dose perhaps be more pronounced after a year of dosing versus the six months? And I have a follow-up.

Lisa Ricciardi (CEO)

Tony, do you want to address that? Thank you, Elaine.

Anthony Caggiano (CMO)

Yeah. Yeah. Hi, Elaine. You're right, so the 100 milligram dose did not significantly alter the A-beta monomers in the same way that the 300 milligram dose had. I think a more relevant biomarker here is the NFL, which is a marker of general neurodegeneration, where we saw a really robust change both with the 300 and the 100. You know, the monomers, we believe, is part of the basic mechanism of our receptor rather than a key part of the disease-modifying process that you see here. To further answer your question around longer trials, we do expect that, you know, with longer trials, such as 12- or 18-month trials, we would then begin to see more of the downstream biomarkers moving as well.

Elaine Kim (Biotech Equity Research Associate)

Got it. Okay, that, that makes sense. Thank you.

Anthony Caggiano (CMO)

Yeah.

Elaine Kim (Biotech Equity Research Associate)

For the follow-up, your cash runway is into the second quarter of 2025. How do you plan on lengthening that runway and support later-stage trials, and I may be jumping the gun, but maybe up to phase three, how do you plan on doing that?

John Doyle (CFO)

Yeah. Thank you, Elaine. I mean, there's a lot of things that we need to evaluate. There's going to be a lot of options available to us. So as we look to extend our runway, we'll certainly take all of those into consideration and move forward as we design the next stage of those trials.

Elaine Kim (Biotech Equity Research Associate)

Got it. Thank you for taking our question.

Operator (participant)

Our next question comes from Ram Selvaraju from H.C. Wainwright.

Raghuram Selvaraju (Managing Director and Senior Healthcare Equity Research Analyst)

Thanks so much for taking my questions. First of all, somewhat intellectually provocative one, if I may. There was some discussion at AAIC in Philadelphia last month about the potential applicability of GLP-1 receptor agonism to the treatment of Alzheimer's disease. Do you think there could be any synergistic activity of CT-1812 with GLP-1 receptor agonists, specifically in the context of Alzheimer's?

Lisa Ricciardi (CEO)

That's a very interesting question, Ram. Tony, any thoughts on that?

Anthony Caggiano (CMO)

Sure. Yeah, interesting. I think, obviously, the world is very interested to see how the GLP-1s behave in Alzheimer's disease. You know, given the mechanism of our drug is a, you know, very basic upstream interaction within the basic pathophysiology of Alzheimer's disease, we think CT-1812 has the potential as a monotherapy as well as in conjunction with other therapies. We're certainly interested in seeing it with approved, current approved therapies, and if GLP-1 were to be approved for Alzheimer's disease, it would be very interesting to see how it acts together. So perhaps in the future, we'll see that data.

Raghuram Selvaraju (Managing Director and Senior Healthcare Equity Research Analyst)

Great. And then just a quick follow-up on the dosage.

Anthony Caggiano (CMO)

Yeah.

Raghuram Selvaraju (Managing Director and Senior Healthcare Equity Research Analyst)

I was wondering if there were doses intermediate between the 100 and the 300 that you would consider assessing further in clinical development, or if at this juncture, you've ruled that out. If you were to study intermediate doses, which ones do you think are likely to be most appropriate?

Anthony Caggiano (CMO)

Yeah. So, we do have an intermediate dosage being studied right now. In our START trial, which is the 540 participant study in early Alzheimer's disease, we have a 200 milligram dose. And in our MAGNIFY trial, which is the study in dry AMD, we also have the 200 milligram dose. And indeed, we introduced those doses a few years back for this very reason, believing that it might be a very nice sweet spot, where we see really good efficacy, but fewer adverse events. So those doses are already in the clinic, and it's likely that we'll see them again in the future.

Raghuram Selvaraju (Managing Director and Senior Healthcare Equity Research Analyst)

Thank you.

Operator (participant)

Our next question comes from Mayank Mamtani from B. Riley.

Kevin Kuo (Equity Research Analyst)

Hi, can you hear me?

Lisa Ricciardi (CEO)

Yes, Mayank, good morning.

Kevin Kuo (Equity Research Analyst)

Oh, this is Kevin Kuo, for Mayank. Thanks for taking our question.

Lisa Ricciardi (CEO)

Oh, great.

Kevin Kuo (Equity Research Analyst)

So-

Lisa Ricciardi (CEO)

Yeah. Hi, Kevin.

Kevin Kuo (Equity Research Analyst)

Hi. So now that we saw the data from the SHINE trial, just wondering if you can talk about your expectation for your SHIMMER trial later this year, and specifically, maybe your expectation for neurofilaments or other biomarkers that, such as GFAP, that may not be as relevant in different disease groups like Alzheimer's, but maybe have different actions in, like, DLB disease. And maybe if you can point to whether you would still expect 300 milligram to have some liver enzyme signal. Thanks.

Lisa Ricciardi (CEO)

So I think there were three questions, Kevin. You broke up in the middle. One is overall expectations for SHIMMER. Second, you were looking for a read on a number of the biomarkers. And the last thing you mentioned was the 300 milligram dose.

Kevin Kuo (Equity Research Analyst)

Yes.

Lisa Ricciardi (CEO)

You know, what might be the profile of that dose? I'll turn those three questions over to Tony.

Anthony Caggiano (CMO)

Sure. Yeah, thank you. Right, so the SHIMMER study is designed very much like the SHINE study was, enrolling similar number of individuals. You know, as a first proof of concept study, where we're really looking, again, for safety and tolerability, and then for a clear, you know, and consistent trend that we can slow progression of the disease across multiple outcome measures. As we've announced previously, we're looking for a readout, you know, towards the end of this year. As far as the biomarkers go, I think as you've implied, the biomarker profile and changes within DLB are not nearly as well studied or predictable as they are currently in Alzheimer's disease....

Having said that, we have a pretty robust program where we're looking at changes in biomarkers from both CSF and blood, looking at canonical biomarkers, as well as, as you've seen in our previous publications, proteomics and phosphoproteomics, looking at changes there. So we look forward to seeing those changes. As far as the liver signal goes, we would expect to see the same thing in these individuals. These are folks who are nearly the same age. There's no reason we would expect to see anything different. So obviously when that data reports out, we'll know that then.

Operator (participant)

Okay, thanks. Our next question comes from Daniel Vitale from Chardan.

Daniel Vitale (Equity Research Analyst)

Hey, good morning, guys. Thank you for taking the question. Yeah, I have a couple.

Lisa Ricciardi (CEO)

Morning, Daniel.

Daniel Vitale (Equity Research Analyst)

Yeah, good morning. Yeah, first, on the SHINE, you know, having had a bit of time to look through the data, and now thinking about the next steps, what do you think are the key learnings from SHINE that you look to incorporate into the next trial, you know, outside of it being a larger and a longer trial?

Lisa Ricciardi (CEO)

Great question. Tony?

Anthony Caggiano (CMO)

Sure. Yeah, well, I think the key learnings, again, are that we saw a very, you know, consistent and clear trend across all the cognitive outcome measures, that we can slow disease progression. More specifically, you know, we see that the magnitude of effect here, as well as the variance. This study now allows us to power future studies. Again, having seen, you know, nearly 40% decrease in progression as per the ADAS-Cog scales, we can now look to the next round of studies, which I anticipate will both be quite larger and longer, so that we can see these changes. We've also nicely identified a dose range, right, where we see effect without troublesome adverse events.

Indeed, as Lisa mentioned, there were no discontinuations due to AEs in the 100 milligram dose and no changes in liver enzymes. So we have a very nice place to operate here for future studies.

Daniel Vitale (Equity Research Analyst)

Excellent. Got it. And, another question, you know, with the recent approvals in Alzheimer's, how did that affect the enrollment rates for your CT-1812 trials? And, related to that, what fraction of participants in the START trial do you expect to be on concurrent approved Alzheimer's disease medications?

Lisa Ricciardi (CEO)

Tony?

Anthony Caggiano (CMO)

Yeah. So, the inclusion criteria or the patient population for the monoclonal antibodies and for our SHINE participants were somewhat different. A little bit overlapping, but generally different. So I'm not sure it really impacted recruitment. I think overall, you know, having the general population now very aware and interested that there are drugs available for Alzheimer's disease has been a great asset, and people are coming, you know, into clinics and interested and inquiring. So overall, I'd say it was a boost. But again, it's a somewhat different population. As far as how many individuals will be randomized or will be on approved monoclonal antibodies within our START trial, that's still a little unknown.

Obviously, one of the antibodies, you know, launched not long ago, and we'll see how it penetrates the market. The other antibody just recently received approval and is just now launching. Right, so we'll see. And within that study, we are stratifying all individuals so that we'll have an even number of people on monoclonal antibodies across the different treatment groups. So we'll have a very good look at, you know, safety and tolerability of combined, and depending on how many people we're able to to randomize, also potentially see if there are additive effects.

Daniel Vitale (Equity Research Analyst)

Okay. Got it. Thank you.

Operator (participant)

There are no further questions at this time, so I'll turn the call back over to Lisa Ricciardi, CEO.

Lisa Ricciardi (CEO)

All right, thank you. To conclude, we are focused on advancing our work to find a treatment to improve the lives of those afflicted with neurodegenerative diseases. The science is sound, we are compelled to move forward, and we continue to build evidence about what CT-1812 can do for patients. Thank you for joining us today.

Operator (participant)

The meeting is now concluded. You may now disconnect.