Mike Moyer; Investor Relations; LifeSci Advisors, LLC
Lisa Ricciardi; President, Chief Executive Officer, Director; Cognition Therapeutics Inc
John Doyle; Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer; Cognition Therapeutics Inc
Tony Caggiano; Chief Medical Officer, Head of R&D; Cognition Therapeutics Inc
Mayank Mamtani; Analyst; B. Riley Securities, Inc.
Daniil Gataulin; Analyst; Chardan Capital Markets, LLC
Operator
Greetings and welcome to the Cognition Therapeutics' fourth-quarter and full-year 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Mike Moyer with LifeSci Advisors. Thank you. You may begin.
Mike Moyer
Thank you, operator, and good morning, everyone. Welcome to Cognition Therapeutics' fourth-quarter and year-end 2024 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 2024 fourth-quarter and year-end results. We encourage everyone to read this morning's press release, as well as Cognition's annual report and 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 releases and SEC filings, including its annual report on Form 10-K and previous fillings.
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 Ricciardi.
Lisa Ricciardi
Mike, thank you, and good morning, everyone. Cognition Therapeutics' focus is the development of zervimesine for patients with Alzheimer's disease and dementia with Lewy bodies, which I'll refer to as DLB. For clarity, zervimesine 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 zervimesine 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 the zervimesine into registrational trials. 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 2 meetings, one for Alzheimer's and one for DLB. \At the same time, we're having discussions with advisers to ensure that we are as prepared as possible when approaching the FDA.
Let's talk about capital allocation. We decided to conclude our dry AMD Phase 2 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 DLB 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 masked data. 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 zervimesine 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 DLB programs.
Zervimesine 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 what the FDA plans to pursue each indication in separate studies.
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 SHINE and SHIMMER. The ideal scenario would be to find a partner to work with on the development and registration program and, in the process, obtain non-diluted funding for one or both indications.
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 3 ready. Our CMC team has developed a novel chemical process for the manufacture of zervimesine. Provisional patent applications covering this chemical process have been filed.
We expect that this manufacturing process will produce materials sufficient for future clinical studies, and if zervimesine is approved, we expect it will support commercial manufacturing needs. On that same front, we're working with a domestic CMO or contract manufacturing organization that will be capable of producing commercial quantities of zervimesine.
With that, John Doyle will review our financial results and provide color around our cash position and capital requirements. John.
John Doyle
Thank you, Lisa. We made the strategic decision in January 2025 to voluntarily conclude our Phase 2 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 2025. This allows us to focus our resources entirely on our Alzheimer's and DLB programs.
During 2024, we used one of the tools we have at our disposal, our after market or ATM facility with B. Riley Securities. For the year ending December 31, 2024, we sold almost 20 million shares of our common stock for gross proceeds of approximately $12.8 million.
Now, let's proceed to the financials for the fiscal year 2024. Cash and cash equivalents as of December 31, 2024, approximately $25 million in total obligated grant funds remaining from the NIA were $50 million. As indicated earlier, we estimate that we have sufficient cash to fund operations and capital expenditures into the fourth quarter of 2025.
Research and development expenses were $41.7 million for the year ended December 31, 2024, compared to $37.2 million for 2023. This increase was primarily related to higher costs associated with activities underway to complete two Phase 2 trials.
General and administrative expenses were $12.3 million for the year ended December 31, 2024, compared to $13.5 million for 2023. The decrease was primarily related to lower equity-based compensation and professional fees.
The company reported a net loss of $34 million for $0.86 per basic and diluted share for the year ending December 31, 2024, compared to a net loss of $25.8 million or $0.86 per basic and diluted share for 2023. Lisa.
Lisa Ricciardi
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 10 days consecutively before September 8, 2025. We are confident we will regain compliance during the allotted time.
We have multiple milestones coming up that we believe will drive value in the stock. We expect to hold two Phase 2 end of Phase 2 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
(Operator Instructions) Mayank Mamtani, B. Riley Securities.
Mayank Mamtani
As you prep for the end of Phase 2 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 2 early AD study, and if there's any update on on enrollment for that early AD study would be helpful too. And then I have a follow up.
Tony Caggiano
Yeah, so we certainly are planning to do a enrichment of participants in the next study for those who have the lower tau. We haven't announced exactly what that level is going to be, but it'll be very similar to what we used in the SHINE study.
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. 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.
Mayank Mamtani
Thank you. And then on SHIMMER data that was presented at a recent conference, are you able to share any investigative physician feedback that that you came away with? And also, obviously, interested in what next steps in terms of publication strategy that you may have there in AMD 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 same-same partner interested in both indications, or do you think one indication could be more manageable by a company your size versus maybe another indication being pursued by a larger company?
We would love to hear your thoughts on that. And thanks again for taking the question.
Lisa Ricciardi
We don't have any updates on partnering. We have lots of interest in different forms. You alluded to several, one indication, both indications. So when the deal's 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 and others, payers in particular, are identifying the fact there are great needs. This is a convenient drug. 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.
Tony Caggiano
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 months.
Mayank Mamtani
Understood. Thanks again.
Operator
Daniil Gataulin, Chardan Capital.
Daniil Gataulin
I have one for DLB, specifically. Similar to the Alzheimer's program, are you looking at any biomarkers or any (inaudible) biomarkers to try to increase the probability of success of that program in the pivotal studies?
Tony Caggiano
Good question. Right now, we don't have any definitive enrichment strategy. The good news is we saw a 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-secretase status, whether they were on dopamine-related drugs, whether they were on acetylcholinesterase-related drugs. So the good news is we believe, across the spectrum of people with DLB, we expect to see a good response.
Daniil Gataulin
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 200 milligram dose? And thinking about the dose for pivotal studies for AD and DLB, what are your current thinking? Are you leaning towards 100 or 200?
Tony Caggiano
We haven't selected an exact dose yet. Most likely we will be operating below 300 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 100- and 300-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 300, but we haven't come to agreement exactly what that dose will be. Obviously, that'll be part of our end of Phase 2 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.
Daniil Gataulin
Got it. All right. Thank you guys. I appreciate you taking the questions.
Operator
(Operator Instructions) Raghuram Selvaraju, H.C. Wainwright.
This is Dan on for Raghuram. Thanks for taking our questions. We were wondering what does the competitive landscape in DLB look like? And recognizing your plans to meet with the FDA regarding zervimesine, what are your thoughts around the potential provability of it and DLB based on neuropsychiatric parameters? And I'd like to ask a follow up if I could.
Tony Caggiano
Yeah, the neuropsychiatric symptoms that you mentioned, 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 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 stand-alone, or co-primary, or composite outcomes. 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.
Awesome. And then what are the outlooks in Europe versus the United States for accelerated approval of anti-Alzheimer's drugs and what are your thoughts for more near- or medium-term grant funding given the reported NIH cutbacks? Thank you.
Tony Caggiano
So right now, we are primarily pursuing a very traditional path, right, of Phase 3 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 [HI] and Lilly. And given our ability to clearly measure what a meaningful clinical outcomes, our path is to follow the traditional outcomes and seek a traditional approval.
Now, in Europe, we haven't seen that it's any easier to get an approval. So again, we plan to follow a very traditional pathway.
Lisa Ricciardi
And then with regard to the NIH funding, John mentioned we have a $50 million dollar 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, with the iNDI 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 3 programs, you have the ability to reach other sources of funding the capital markets partnerships, et cetera. And that the funding vehicles we've seen so far are really geared toward earlier stage programs.
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 in earlier stage company.
Awesome. Thank you.
Operator
Thank you. That concludes our questions over the phone. I'll turn the floor back to Ms. Ricciardi for any final comments.
Lisa Ricciardi
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 3 trials in AD and DLB.
Someone had previously asked us why are you not starting your Phase 3 trials yet, and I think we've covered it on this call. 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 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. 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.
