Cognition Therapeutics, Inc (CGTX) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects several negative indicators: a net loss increase, compliance risks with NASDAQ, and operational challenges. Despite the positive feedback from KOLs and neurologists, the lack of clarity in management's responses and potential cash flow risks overshadow these positives. The decision to sell shares and the absence of new grant funding further add to the negative sentiment. Without a clear path to profitability or strong guidance, the stock is likely to face downward pressure in the short term.
Key Financial Performance
Gross Proceeds from Share Sales Approximately $12.8 million (no year-over-year change mentioned) due to the strategic decision to utilize the ATM facility with B. Riley Securities.
Cash and Cash Equivalents Approximately $25 million as of December 31, 2024 (no year-over-year change mentioned) which is expected to fund operations into the fourth quarter of 2025.
Total Obligated Grant Funds Remaining $50 million from the NIA (no year-over-year change mentioned).
Research and Development Expenses $41.7 million for the year ended December 31, 2024, compared to $37.2 million for 2023, representing an increase of $4.5 million (12.1% increase) primarily due to higher costs associated with activities to complete 2 Phase II trials.
General and Administrative Expenses $12.3 million for the year ended December 31, 2024, compared to $13.5 million for 2023, representing a decrease of $1.2 million (8.9% decrease) primarily due to lower equity-based compensation and professional fees.
Net Loss $34 million or $0.86 per basic and diluted share for the year ended December 31, 2024, compared to a net loss of $25.8 million or $0.86 per basic and diluted share for 2023, representing an increase in net loss of $8.2 million (31.8% increase) with no specific reasons provided for the increase.
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Operating Highlights
Lead Candidate: Cognition Therapeutics is focusing on the development of zervimesine (CT1812) for Alzheimer's disease and dementia with Lewy bodies, showing strong efficacy signals in clinical trials.
Manufacturing Process: The CMC team has developed a novel chemical process for zervimesine, with provisional patent applications filed, expected to support future clinical studies and commercial manufacturing.
Market Positioning: Cognition is actively seeking partnerships with biotech and pharma companies to secure non-dilutive funding for the development and registration of zervimesine.
NASDAQ Compliance: The company was granted a 6-month grace period to regain compliance with NASDAQ's minimum bid requirement, aiming to drive stock value through upcoming milestones.
Cost Savings: The decision to conclude the Phase II dry AMD study is expected to extend the cash runway into Q4 2025, allowing full focus on Alzheimer's and DLB programs.
Financial Position: As of December 31, 2024, cash and cash equivalents were approximately $25 million, with total obligated grant funds remaining from the NIA at $50 million.
Strategic Shift: Cognition has prioritized its pipeline by concluding the dry AMD study to concentrate resources on Alzheimer's and DLB programs.
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Risk or Challenges
Regulatory Risks: Cognition Therapeutics is preparing for end of Phase II meetings with the FDA for Alzheimer's and DLB, which involves significant regulatory scrutiny and uncertainty.
Financial Risks: The company acknowledges the significant capital needed to fund ongoing studies and is actively seeking partnerships for non-dilutive funding.
Market Risks: Cognition faces competitive pressures in the biotech space, particularly in the development of treatments for Alzheimer's and DLB.
Operational Risks: The decision to conclude the Phase II dry AMD study was made to focus resources on Alzheimer's and DLB programs, indicating potential operational challenges in managing multiple projects.
Compliance Risks: Cognition was granted a 6-month grace period to comply with NASDAQ's minimum bid requirement, indicating potential risks related to stock performance and market perception.
Cash Flow Risks: The company reported a net loss of $34 million for 2024, raising concerns about cash flow and sustainability of operations without additional funding.
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Guidance & Outlook
Focus on Zervimesine Development: Cognition Therapeutics is concentrating on the development of zervimesine for Alzheimer's disease and dementia with Lewy bodies, with plans to submit final study documents to the FDA for registrational trials.
Capital Allocation Strategy: The company has decided to conclude its Phase II dry AMD study to focus resources on Alzheimer's and DLB programs, which are seen as having a clearer path to success.
Business Development Program: Cognition is actively seeking partnerships with biotech and pharma companies to secure non-dilutive funding for its clinical development efforts.
Manufacturing Process Development: The company has developed a novel chemical process for zervimesine's manufacture and filed provisional patent applications, ensuring readiness for future clinical studies and potential commercial needs.
Cash Runway: Cognition expects its cash runway to extend into the fourth quarter of 2025, following strategic decisions to reduce expenses.
Financial Position: As of December 31, 2024, the company reported approximately $25 million in cash and cash equivalents, with total obligated grant funds remaining from the NIA at $50 million.
NASDAQ Compliance: Cognition has been granted a 6-month grace period to regain compliance with NASDAQ's minimum bid requirement, with confidence in achieving this by September 8, 2025.
Future Milestones: The company anticipates holding two end of Phase II meetings with the FDA and expects announcements regarding partnerships or funding sources.
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Shareholder Return Plan
Shares Sold: Approximately 20 million shares of common stock were sold for gross proceeds of approximately $12.8 million.
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Key Q&A
Q:Do you have any latest thoughts on the tau cutoff threshold that you might be thinking about based on the SHINE study learnings?
A:We certainly are planning to do enrichment of participants in the next study for those who have lower tau. We haven't announced exactly what that level is going to be, but it will be very, very similar to what we used in the SHINE study.
Q:Can you comment on implications of that biomarker to the ongoing Phase II early AD study and if there's any update on enrollment for that early AD study?
A:We haven't made any announcements as to how we're progressing in that study. It is still continuing to recruit.
Q:Are you able to share any investigative physician feedback from the SHIMMER data presented at a recent conference?
A:We have excellent feedback from KOLs, surveys of neurologists, and payers. The feedback is consistently strong, identifying great needs and appreciating the safety profile.
Q:What sort of next steps in terms of publication strategy do you have for DLB?
A:The publication is already underway, but it's a long cycle, so it will take a little bit of time.
Q:Are you looking at any biomarkers to increase the probability of success of the DLB program in pivotal studies?
A:Right now, we don't have any definitive enrichment strategy, but we believe we will see a good response across the spectrum of people with DLB.
Q:What are your current thoughts on dosing for pivotal studies for AD and DLB?
A:We haven't selected an exact dose yet, but we will be operating below 300 milligrams.
Q:What does the competitive landscape in DLB look like?
A:The neuropsychiatric symptoms are key symptoms of the disease, and we are confident that physicians and FDA will be interested in this.
Q:What are your thoughts around the potential approvability of zervimesine in DLB based on neuropsychiatric parameters?
A:A strong emphasis of our FDA meeting will be around which of the outcome measures we will propose.
Q:What are the outlooks in Europe versus the United States for accelerated approval in anti-Alzheimer's drugs?
A:We plan to follow a very traditional pathway for approval.
Q:What are your thoughts for more near- or medium-term grant funding given the reported NIH cutbacks?
A:We don't anticipate more grant funding from the NIA, but we will certainly try.
Q:Review of Unclear Management Responses
A:Management did not provide specific details on the tau cutoff threshold for the Phase II study, nor did they clarify the exact progress of the early AD study enrollment. Additionally, they avoided giving a direct answer regarding the competitive landscape in DLB and the potential approvability of zervimesine.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AMD Phase
AMD study
Advisors Ricciardi
Advisors addition
Alzheimer DLB
Alzheimer Lewy
DLB program
Doyle Chief
ET Greetings
FDA
General decrease
Lewy body
LifeSci Advisors
Moyer LifeSci
Officer Doyle
Phase II
RD Mayank
Results Conference
Ricciardi Chief
Ricciardi Cognition
Ricciardi President
Riley Securities
Securities Results
chemical process
conference Ricciardi
decision AMD
document
indication
manufacturing
meeting
need
partner
resource Alzheimer
today Ricciardi
trial General
website information
zervimesine patient
CGTX Transcript
Cognition Therapeutics, Inc. (NASDAQ:CGTX) Q4 2024 Earnings Call Transcript
Unknown3-22
The earnings call summary reveals several concerns: missed EPS expectations, significant financial losses, NASDAQ compliance risks, and the need for substantial capital. Despite some positive feedback from KOLs and ongoing FDA discussions, the Q&A section highlights uncertainties in clinical strategies and funding. The absence of clear guidance and the sale of shares via ATM further dampen sentiment. Overall, these factors suggest a negative stock price movement in the short term.
Cognition Therapeutics, Inc (CGTX) Q4 2024 Earnings Call Transcript
Neutral3-20
Cognition Therapeutics, Inc (CGTX) Q4 2024 Earnings Call Transcript
Unknown3-20
The earnings call reflects several negative indicators: a net loss increase, compliance risks with NASDAQ, and operational challenges. Despite the positive feedback from KOLs and neurologists, the lack of clarity in management's responses and potential cash flow risks overshadow these positives. The decision to sell shares and the absence of new grant funding further add to the negative sentiment. Without a clear path to profitability or strong guidance, the stock is likely to face downward pressure in the short term.
Cognition Therapeutics, Inc. (CGTX) Q1 2024 Earnings Call Transcript
Unknown8-11
The earnings call summary indicates financial strain with a net loss increase and higher R&D expenses. Regulatory challenges and competitive pressures in the CNS market add to concerns. The Q&A reveals unclear management strategies for extending cash runway, which adds uncertainty. Despite potential for CT1812, the lack of significant results from trials and economic factors affecting biotech funding contribute to a negative outlook. The absence of any strong positive catalysts such as new partnerships or record revenue further supports a negative sentiment.
CGTX Report
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