Cognition Therapeutics, Inc. (NASDAQ:CGTX) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Reported EPS $-0.17 EPS, compared to $-0.16 EPS expectations.
Cash and cash equivalents Approximately $25 million as of December 31, 2024, with no year-over-year change mentioned.
Total obligated grant funds remaining $50 million, with 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, an increase of $4.5 million primarily due to higher costs associated with activities underway 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, a decrease of $1.2 million primarily related 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.
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Operating Highlights
Lead Candidate: Cognition Therapeutics is focused on the development of zervimesine (CT1812) for Alzheimer’s disease and dementia with Lewy bodies, showing strong efficacy signals in clinical trials.
Manufacturing Process: A novel chemical process for the manufacture of zervimesine has been developed, with provisional patent applications filed.
Market Positioning: The company is prioritizing its Alzheimer’s and DLB programs, concluding the dry AMD study to allocate resources effectively.
Funding Strategy: Cognition is actively seeking partnerships for funding and development of zervimesine, aiming for non-dilutive funding.
Cost Savings: Concluding the Phase II MAGNIFY study in dry AMD is expected to extend the cash runway into Q4 2025.
Cash Position: As of December 31, 2024, cash and cash equivalents were approximately $25 million, with total obligated grant funds remaining at $50 million.
Regulatory Strategy: Plans to submit final study documents to the FDA for end of Phase II meetings for both Alzheimer’s and DLB.
NASDAQ Compliance: Cognition has been granted a 6-month grace period to regain compliance with NASDAQ’s minimum bid requirement.
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Risk or Challenges
Earnings Expectations: Cognition Therapeutics missed earnings expectations with a reported EPS of $-0.17, compared to the expected $-0.16.
Regulatory Risks: The company is preparing for end of Phase II meetings with the FDA for Alzheimer’s and DLB, which carries risks related to regulatory approval and compliance.
Capital Requirements: There is significant capital needed to fund the upcoming clinical studies, and the company is actively seeking partnerships for non-dilutive funding.
Operational Focus: The decision to conclude the Phase II dry AMD study was made to focus resources on Alzheimer’s and DLB programs, indicating a risk of resource allocation and potential opportunity costs.
NASDAQ Compliance: Cognition Therapeutics was granted a 6-month grace period to comply with NASDAQ’s minimum bid requirement, indicating a risk of delisting if compliance is not achieved.
Financial Losses: The company reported a net loss of $34 million for the year ended December 31, 2024, which raises concerns about financial sustainability.
Manufacturing Risks: The company is working with a contract manufacturing organization to produce zervimesine, which involves risks related to production capacity and quality assurance.
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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 concluded its Phase II dry AMD study to focus resources on Alzheimer’s and DLB programs, believing this decision is necessary for success.
Business Development Efforts: Cognition is actively seeking partnerships with biotech and pharma companies to secure non-dilutive funding for zervimesine's development.
Manufacturing Readiness: The company is working with a contract manufacturing organization to ensure the capability of producing commercial quantities of zervimesine.
Cash Runway: Cognition expects its cash runway to extend into the fourth quarter of 2025, following strategic decisions to reduce expenses.
Funding Expectations: The company anticipates announcements regarding partnerships or other funding sources in the near future.
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.
Upcoming Milestones: The company expects to hold two end of Phase II meetings with the FDA, which will provide clarity on clinical programs.
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Shareholder Return Plan
Shares Sold via ATM Facility: 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 based on the SHINE study learnings?
A:We are planning to do enrichment of participants in the next study for those who have lower tau. We haven’t announced the exact level yet, but it will be very similar to what we used in the SHINE study.
Q:What are the implications of the tau biomarker to the ongoing Phase II early AD study?
A:In the early AD study, there is no specific cut around tau, as this population inherently has slightly lower tau.
Q:Can you share any investigative physician feedback from the SHIMMER data?
A:We have received excellent feedback from KOLs and payers, indicating a strong need for the drug and appreciation for its safety profile.
Q:What is the publication strategy for the SHIMMER data?
A:The publication is already underway, but it will take time due to the preparation and review process.
Q:Are you looking at any biomarkers for the DLB program?
A:Currently, we don’t have any definitive enrichment strategy, but we expect to 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:We are confident that physicians and the FDA will be interested in neuropsychiatric symptoms as a core symptom of the disease.
Q:What are your thoughts on the potential approvability of zervimesine in DLB?
A:The FDA meeting will focus on which outcome measures we will propose, as there is no existing guidance for DLB.
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 traditional pathway for approval, as we believe it is the most reliable approach.
Q:What is the status of NIH funding for your trials?
A:We have a $50 million balance of funding for our START trial, but we don’t anticipate more grant funding from the NIA.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific tau cutoff threshold for the next study, stating it would be similar to the SHINE study without providing a specific number. They also did not provide clarity on the progress of the early AD study's enrollment.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AMD Phase
AMD decision
AMD prioritization
AMD study
ATM facility
Advisors Cognition
Alzheimer DLB
Alzheimer body
CMC chemical
CMO contract
CT study
Cash cash
Cognition Therapeutic
DLB program
FDA
II meeting
Inc expectation
Lewy body
Phase II
Transcript Cognition
body dementia
chemical process
clarity
compliance
decision AMD
document
end Phase
expectation Greetings
indication
manufacturing
need
partner
requirement
resource Alzheimer
stock
trial decrease
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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