Cognition Therapeutics - Q4 2023
March 26, 2024
Transcript
Operator (participant)
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 Meyer. Please go ahead.
John Doyle (CFO)
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 to 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 the 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 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 now like to turn the call over to Lisa Ricciardi.
Lisa Ricciardi (CEO)
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 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 due 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 1 to 1 to 1 to receive placebo or oral doses 100 or 300 milligrams of drug. We expect top-line data mid-2024 after the last patient has completed six months of 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-Cog-14 over 18 months.
Now we exceeded this in our preliminary analysis of the first 24 patients in SHINE, where we saw a 3-point difference in the slowing of cognitive decline compared to placebo on the ADAS-Cog-11 just after 6 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-Cog-11, 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 on Aging. We look forward to seeing the full study results later this year. Now let me turn to our SHIMMER study, a phase 2 U.S.-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 oligomers 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 the sizable population of DLB patients with co-pathology.
The SHIMMER trial is also supported by non-dilutive funding from the NIA, and it's 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 top-line 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 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 Trials 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 in START. We believe this decision will provide real-world evidence of CT1812 in combination therapy. I will 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 U.S. 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 demonstrate 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 indicates that an effective oral treatment option will be well received. 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 2 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 to developing new therapies for neurodegenerative diseases. With that, I turn the call to John Doyle to review our financial results.
John Doyle (CFO)
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 to questions. Operator?
Operator (participant)
We are now opening the floor for Q&A. If you'd like to ask a question, please press star number one on your telephone keypad. Our first question comes from Charles Duncan from Cantor Fitzgerald. Your line is now open.
Charles Duncan (Md & Senior Biotechnology Analyst)
Hey, good morning, Lisa, and team. Congratulations on the progress. Could be a transformational year. Thanks for taking our question. I had a couple of questions regarding SHINE and then, yeah, on the program for 1812. I guess you mentioned a point change that would be clinically meaningful, and I agree with you. However, I would argue that actually a lower point change may also be clinically meaningful, given that you have an oral compound and given that you are seeing that in a very short time relative to the antibodies.
And so I guess I would ask you about a smaller change being impactful and possibly even if it's seen in a more mild patient population. And then can you update us on the completer rate for SHINE?
Lisa Ricciardi (CEO)
Good morning, Chaz. Good to talk to you. I'm going to turn your question over to Tony, and I, spoiler alert, I will not update you on the completer rate for SHINE. When the study is fully completed, we'll provide more information.
Anthony Caggiano (CMO & Head of R&D)
Yeah. So it's a good question, and we agree with you, Chaz. There is a lot of meaning in changes that are less than the 3 points that folks talk about a lot. Indeed, if you look at the lecanemab data, as Lisa mentioned, there was a 1.44-point change over 18 months, and at 6 months, they had about a 0.5-point change. And this is really the current benchmark for what could be seen in a disease-modifying therapy. Now, we're optimistic that we'll have very good results based on our preliminary results, which we've reported previously.
But indeed, there is success and great success short of that benchmark. We have several secondary measures, which how those follow, if the preponderance of those secondary measures follow directionally with the primary, obviously that would strengthen changes that are more modest.
Charles Duncan (Md & Senior Biotechnology Analyst)
That's very helpful, Tony. Then thinking about the mechanism as a sigma-2 ligand, it would seem to me that the drug may have even greater activity or signal-to-noise in a more mild patient population, and so excited to see the START trial progress. I guess I'm wondering when you could anticipate an update out of that trial. I know that you're not fully engaged in conducting it, but wouldn't it be great to see activity in an even earlier stage patient with Alzheimer's? Thanks.
Lisa Ricciardi (CEO)
Chaz, this is Lisa. Your point is well taken. At this time, I believe you know there is no interim plan for START. I leave that all to Tony and his ACTC colleagues. Consistent with our previous trials, we're not reporting any interim updates on enrollment or things of that nature. As for now, we'll continue to provide communication that says it's enrolling, and if there's anything else to communicate, we'll let you know. We found it's more effective for us to say, "When the trial's done, it's done," and not to provide partial progress.
Charles Duncan (Md & Senior Biotechnology Analyst)
Okay, that's fair. Last question, and sorry to hop back to SHINE, and that is, following the 6-month treatment period, could you remind us what happens with those patients? Are they given an opportunity to continue on to treatment, and if so, have any done that?
Anthony Caggiano (CMO & Head of R&D)
We do not have an open label extension at this time. After six months of treatment, folks are followed for another month for safety, and then the study is completed.
Lisa Ricciardi (CEO)
Chaz, to be honest, we have wanted to do an open label extension, but the economics were prohibitive for a company of our size. And so that's something we're considering as we look forward. It's a great question, something the team would like to be in a position to do.
Charles Duncan (Md & Senior Biotechnology Analyst)
Yeah, understood. Hopefully, good data will change that. Thanks for taking our questions.
Lisa Ricciardi (CEO)
Yeah. Thanks, Chaz.
Our next question comes from Jay Olsen from Oppenheimer. Your line is now open.
Jay Olson (Md & Senior Analyst specializing in biotechnology)
Oh, hey. Congrats on the progress, and thanks for taking the question. Can you talk about the patient's baseline characteristics in the SHINE study? And also, can you describe how you plan to share the top-line results of the SHINE study? Will that be in a press release or a medical meeting? And then I had a follow-on. Thank you.
Lisa Ricciardi (CEO)
Yeah, good morning, Jay. Good to hear from you. Tony, I'm going to let you take these questions.
Anthony Caggiano (CMO & Head of R&D)
Sure. Yeah. We do not have baseline characteristics for this study as yet. It's still blinded, and the data has obviously not yet been locked, cleaned and analyzed. The plan to read out the data: we'll have a top-line read, obviously, soon after we get it. Then the plan is to roll out the full dataset at the AAIC meeting at the end of July this year. Obviously, that's timing-dependent upon when we get the data, but that's the current plan.
Jay Olson (Md & Senior Analyst specializing in biotechnology)
Great. Thank you for that. Then just as a follow-up, can you just talk about the level of interest you've seen from investigators and the progress you're making in site activation for the START study?
Lisa Ricciardi (CEO)
Yeah. The sites are top sites around the country. That's the ACTC network. Absolutely top sites. I always say to investors, "Jay, if your family member was sick, these are the places you'd want to go." There is a lot of enthusiasm. I don't have at the top of my head the number of active sites, but we are making progress, and they are keen to have the opportunity to study an oral drug for their early patient population. From our perspective, it's positive. We're looking to get that study fully enrolled and completed. It's a big study, and it's a long study, but we're making positive progress and met with enthusiasm by the PIs.
Jay Olson (Md & Senior Analyst specializing in biotechnology)
Great. Thanks so much for taking the questions, and congrats again on the progress.
Lisa Ricciardi (CEO)
Thanks, Jay.
Operator (participant)
Our next question comes from Mayank Mamdani from B. Riley Securities. Your line is now open.
Mayank Mamtani (Md & Group Head of Healthcare Equity Research)
Good morning, team. Thanks for taking our questions, and appreciate the comprehensive update. Maybe just quickly on the phase 2 SHINE study, could you comment on your expectation for rate of ARIA? And if you do have any understanding on how the split of mild and moderate patients are going to be in the SHINE study? Obviously, with your earlier 24-patient cohort, breaking out mild and moderate was not possible, but in this larger cohort, that could be a possibility. And then I have a couple of follow-ups.
Lisa Ricciardi (CEO)
Good morning, Mayank. I'm going to let Tony take your question.
Anthony Caggiano (CMO & Head of R&D)
Yeah. So, taking the second part first, we will be doing analysis of how folks' their scores entering, breaking down between mild and moderate or more severe and less severe, and how that impacts their change on our outcome measures. And then remind me of the first question.
John Doyle (CFO)
Rate of ARIA.
Oh, rate of ARIA. Yeah. So we don't expect, based on our mechanism of action, that ARIA will be an issue, right? With antibody therapies pulling amyloid from brain and blood vessels and the rest of the vasculature, you would expect to see those findings. We do not. However, obviously, the full safety picture of our drug will come out as we do complete studies.
Mayank Mamtani (Md & Group Head of Healthcare Equity Research)
Understood. And then in regards to your recent EEG proteomics and even brain volume data that has been helpful to understand Sigma-2 receptor biology, any specific biomarker data you'd have in the top line for both readouts that is worth paying attention to? If you could point to that, Tony, that would be great.
Anthony Caggiano (CMO & Head of R&D)
Yeah, sure. We'll be reporting out basically the same biomarkers that we did from the preliminary read. Those are the canonical biomarkers that you would expect to see: changes in monomer, synapse proteins, GFAP, NfL, etc. Then as we did previously, we'll be doing complete proteomic analyses from the cerebrospinal fluid and plasma of these individuals to look at more refined measures of target engagement and disease modification. We'll be doing pretty much the same thing we did in the preliminary read as well as expanded based on what we've learned in the intervening time.
Mayank Mamtani (Md & Group Head of Healthcare Equity Research)
Great. And then on the phase 2 MAGNIFY study, how has the initial investigator feedback been? I know you're doing well with site activation, but just if you are able to comment on study enrollment. And then lastly, on financials, how much of expected grant funding is baked into your runway guidance so we could aptly model the next 4 to 5 quarters of cash flow? Thanks again for taking our questions.
Lisa Ricciardi (CEO)
Yeah, you're welcome, Mayank. With regard to MAGNIFY, there is tremendous enthusiasm in the clinical research community for the trial, as well as from patients. So there is positive momentum in that study. And like our other studies, we don't provide guidance on enrollment. They are a very enthusiastic group of PIs and patients, so we can tell you that much. And on the grants, John?
Anthony Caggiano (CMO & Head of R&D)
With respect to the grant funding, Mayank, so we expect to complete the SHIMMER grant funding this year as we wrap up that trial, and then the remaining balance of that will be dedicated to START trial as we progress through 2024 and 2025.
Lisa Ricciardi (CEO)
So Mayank, your question was about the $67 million in the press release we identified. Is that right? And how much of that is baked into the runway? Yeah. As you know, Mayank, the grants are drawn down as the studies are completed, so it's really a function of the progress we make in those studies, how quickly that grant funding is absorbed.
Mayank Mamtani (Md & Group Head of Healthcare Equity Research)
Got it. That's helpful. Thanks again for taking our questions, and looking forward to an exciting next few months for you guys.
Lisa Ricciardi (CEO)
Yeah, thank you. We are as well. Thank you.
Operator (participant)
As of right now, we don't have any raised hands, so I'd now like to hand back over to the management for their final remarks.
Lisa Ricciardi (CEO)
Terrific. To conclude, we're looking forward to our continued progress and important phase two data readouts in 2024. We believe our science is sound, and we continue to build evidence supporting CT1812's potential for patients. We're positioned to achieve and deliver on multiple clinical milestones, and we're focused on creating long-term value for our shareholders. Thank you for joining us today.
Operator (participant)
Ending today's conference call. You may now disconnect. Have a good day.
Lisa Ricciardi (CEO)
Thank you.
Operator (participant)
Goodbye.