Alpha Cognition, Inc. (OTC:ACOGF) released full year 2022 operational and financial results on March 8, 2023 through the filing of its audited financial statements and management discussion and analysis (MD&A) with SEDAR.
Highlights for 2022 include:
➢ Preclinical histology data for Alpha-1062 in TBI - February 2022
➢ Preclinical data for Alpha-0602 announced – March 2022
➢ Introduction of two new GEMs candidates: Alpha-0702 & Alpha-0802 – June 2022
➢ Pharmacokinetic equivalence study results for Alpha-1062 – June 2022
➢ Bioequivalence study results for Alpha-1062 – August 2022
➢ Announcement and partial closure of $6.8 million private placement – February 2023
For the 12-month period ending December 31, 2022 vs. the 12-month prior period ending December 31, 2021:
➢ No revenues were generated in either period;
➢ Research and development expenses totaled $8.8 million, up 11% from $7.8 million increased expenditures allocated to the ALPHA-1062 and ALPHA-0602 programs;
➢ General and administrative expenses increased 17% to $4.8 million from $4.1 million on higher use of subcontractors, addition of new management team members and greater share based compensation which was partially offset by lower accretion expenses and a reduction in investor relation services;
➢ Total operating expenses rose 13% to $13.6 million from $12.1 million;
➢ Net other items were $1.5 million due to a loss on foreign exchange, interest income and a gain on revaluation of derivative liability;
➢ Net loss was ($12.1) million vs. ($19.5) million or ($0.18) and ($0.37) per share, respectively.
As of December 31, 2022, cash and equivalents totaled $2.1 million. This amount compares to an $11.3 million balance at the end of December 2021. In terms of obligations, Alpha Cognition carries a promissory note issued in March 2015 to Neurodyn Life Sciences for the acquisition of Alpha-1062 held on the balance sheet at $1.2 million, the term of which was extended to July 15, 2024 at a 5.5% interest rate. Cash used in operations in 2022 was ($9.2) million compared with cash used of ($9.9) million in 2021. Financing cash flows totaled $25,000 with proceeds from option exercise more than offsetting interest paid on promissory notes.
Financing Update
Alpha Cognition, Inc. announced a private placement of $5.0 million1 that was partially closed on February 15, 2023. ACI had been running low on cash in its final stretch to bring Alpha-1062 in front of the FDA with a new drug application (NDA). Proceeds from the raise will be sufficient to bring the lead candidate to the FDA and await its disposition, but will not support development of the progranulin or traumatic brain injury programs.
The first tranche raised almost three-quarters of the expected amount and subscription agreements have been received for the remainder which is expected to close around the end of February 2023. We expect funding to support activity related to the NDA submission, including continued progression of the dose proportionality study for Alpha-1062 and ongoing chemistry, manufacturing and controls (CMC) work in support of the Alpha-1062. Other efforts that will be supported by the new funding include FDA interaction with respect to the traumatic brain injury (TBI) IND to identify desired content in the regulatory submission.
As part of the capital raise, Spartan Capital Securities was granted commissions in return for financial advisory services to ACI. Spartan provides services in the investment banking, institutional trading and research realms for middle market and emerging growth companies. Biotech is one of its primary industries. They may provide assistance in ACI’s future anticipated efforts to shift its listing to the NASDAQ and raise additional capital.
Other Items
Management Transitions
ACI’s Chief Medical Officer, Cedric O’Gorman, recently stepped down. He had been involved in preparing the IND for Alpha-1062 but had completed his responsibilities and moved on to developing programs further down in the pipeline. Chief Scientific Officer Denis Kay remains on board and will shepherd the final stages of the IND development process with the rest of the ACI team.
NDA Submission
Based on guidance provided by management, we anticipate a submission of the NDA for Alpha-1062 in summer 2023. Assuming the submission takes place in June or July, and following the customary just-under-a-year review process, a target action date is expected in 2Q:24. If approval is granted, revenues are expected in 2H:24.
The environment for small cap biotech companies has been difficult over the last several quarters. Even late-stage clinical programs that have distinguished themselves and met expected safety and efficacy milestones have faced an uphill battle raising funding to check the last boxes. With the recent capital raise, ACI has set itself apart from this group with sufficient funding to submit the NDA application.
Alpha Cognition Milestones
➢ Introduction of ALPHA-0702 & -0802 – June 2022
➢ ALPHA-1062 pivotal trial results in AD – 2Q:22
➢ FDA meeting to discuss ongoing development of ALPHA-1062 – 2Q:22
➢ European patent defense in motor neuron disease – June 2022
➢ Additional data sets for GEMs – 3Q:22
➢ FDA meeting for TBI – 2Q:23
➢ NDA submission for ALPHA-1062 in AD – mid-2023
➢ IND submission for ALPHA-1062 in mild TBI – 2023
➢ ALPHA-1062 projected FDA approval for mild to moderate AD – 2Q:24
➢ Commercial launch of ALPHA-1062 in mild to moderate AD – 3Q:24
➢ Launch of ALPHA-1062 RESOLVE tolerability study (label expansion) – 4Q:24
➢ Initiation of ALPHA-1062 combination (BABE) study – 2025
➢ ALPHA-1062 + memantine pivotal trial – 2H:25
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1. Also reported at CAD$6.8 million.
2. Source: January 2023 Alpha Cognition Corporate Presentation
