Good morning, ladies and gentlemen and welcome to Cognition Therapeutics Second Quarter 2023 Earnings Conference Call. My name is Jenny and I will be your conference operator today. This call is being recorded. I would like to turn the presentation over now to your host for today’s call, Daniel Kontoh-Boateng, Investor Relations for Cognition Therapeutics. Please proceed, Mr. Kontoh-Boateng.

Good morning and thank you for participating in Cognition Therapeutics conference call today. With me today are Lisa Ricciardi, President and Chief Executive Officer of Cognition Therapeutics and John Doyle, Chief Financial Officer of Cognition. A press release detailing Cognition Therapeutics’ second quarter 2023 results is available on the Investors section of our website at cogrx.com. We encourage everyone to read this morning’s press release as well as Cognition's quarterly report on Form 10-Q, 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 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 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 quarterly report on Form 10-Q 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 hand the call over to Lisa Ricciardi. Lisa?

Thank you, Daniel, and good morning, everyone. Welcome to Cognition Therapeutics earnings conference call covering the results for the second quarter of 2023. On today’s call are Chief Financial Officer, John Doyle, and I will share prepared remarks on the company’s progress and financial performance in 2023, after which we’ll be joined by Dr. Tony Caggiano, our Chief Medical Officer and Head of R&D for questions and answers. In the second quarter of 2023, we continued the progress and execution shown in the first quarter of the year. Our clinical leadership team continues to build what we believe will be compelling evidence for the neuroprotective effects of orally delivered CT1812, our lead candidate. Our most recent evidence comes from the SEQUEL trial results, which we’ll be covering in this call. As a reminder for investors, we have important data on multiple fronts. First, we’ve shown that CT1812 engages its target, a sigma-2 receptor. Second, this engagement has physiological consequences demonstrated by the results of anatomical endpoints in our SPARK trial, that is to say slowing of brain volume atrophy. Third, we have preliminary cognitive data from the first cohort of patients in the SHINE study and we have just added neurophysiology evidence demonstrating that CT1812 improved brain activity and connectivity compared to placebo as measured by quantitative EEG in our SEQUEL study. As our research and clinical development operations team worked diligently to progress CT1812, we are pleased to see the most positive recent events in the Alzheimer’s field, including the full approval of LEQEMBI. Lilly and Eisai have recently reported data supporting the role of amyloid in Alzheimer’s disease. We continue to build evidence that supports targeting amyloid beta oligomers, the toxic species driving neurodegeneration in Alzheimer’s disease. Oligomers are an early-stage product as the brain moves from monomers to A beta plaques, we believe this is the optimal target in Alzheimer’s disease. Mounting evidence demonstrates the neuroprotective mechanism of action of CT1812 which prevents the binding of oligomers to neurons by modulating the sigma-2 receptor. By doing so, CT1812 has the potential to prevent the loss of synapses and thus may slow or stop the progression of cognitive impairment. As other biologics join LEQEMBI on the market, we believe that CT1812, an oral agent may complement these approaches. By acting on this novel mechanism, we do not anticipate the incidence of ARIA, and we have not seen any to date in our studies. We also believe that administration of an oral drug will likely ease the burden of administration and access to therapy. Now let me give you a brief update on our clinical trials. As previously mentioned, we reported top line results from our exploratory SEQUEL quantitative EEG study. The Phase 2 trial was conducted in the Netherlands with 16 people who have mild to moderate Alzheimer’s disease. The top line data showed evidence that CT1812 had a direct impact on synapse function as measured by a positive change in the makeup or the composition of brainwaves. Specifically, we saw proportionally fewer slow or stable waves, which are associated with cognitive impairment and proportionally more alpha waves. These waves are considered the normal background activity of a healthy unimpaired brain. CT1812 also improved the connectivity between brain regions, which may allow for a more ready exchange of information between the regions. In the SEQUEL trial, we observed changes in brain waves that are consistent with restoring wave patterns to that of healthy adults in just 4 weeks. For a chronic neurodegenerative disease like Alzheimer’s disease, we are encouraged to see these changes in a short period of time and in a population of only 16 patients. In July, we announced that the 540 Phase 2 START trial for early Alzheimer’s disease has activated the first clinical site. Our trial is being conducted with our partner, the Alzheimer’s Clinical Trial Consortium, or the ACTC. We expect 50 to 60 sites in North America to enroll patients with disease. These patients will be randomized to receive once daily CT1812 or placebo for 18 months. Also in July, we announced that our MAGNIFY trial dosed the first participant. This trial is designed to study the efficacy of CT1812 in people with geographic atrophy, or GA, secondary to dry age-related macular degeneration. MAGNIFY is a randomized placebo-controlled trial that is expected to enroll 246 adults who have been diagnosed with dry AMD with measurable geographic atrophy. In the context of dry AMD, CT1812 as a once-daily oral drug has the potential to offer a non-invasive alternative to the approved treatment, which is administered as an intravitreal injection. In this study, CT1812 will be given for 24 months with an assessment to measure the slowing of disease progression as measured by changes in the geographic atrophy lesion size. Now I would be remiss if I didn’t highlight a major publication that our team authored along with collaborators published in the International Journal of Molecular Science. This peer-reviewed article titled 'Sigma-2 receptors from basic biology to therapeutic target' provides a comprehensive review of the biology and function of the Sigma-2 receptor, and its potential as a therapeutic target for age-related neurodegenerative diseases, including Alzheimer’s disease, dementia with Lewy bodies and dry age-related macular degeneration. The work cited in this publication is exhaustive. You can find this and other publications on our website. Our research team continues to produce important scientific work building evidence of disease modification through proteomic studies at the ADPD conference in Sweden. Our team demonstrated the effects of CT1812 and altering Alzheimer’s disease biology. An analysis of the impact of CT1812 on pathways implicated in dry AMD, age-related macular degeneration was presented in April at the ARVO meeting. And just 2 weeks ago, we presented confirmatory pathway analysis in a mouse model of Alzheimer’s disease at the AAIC meeting in Amsterdam. Said another way, we have shown consistent, measurable proteomic impact across our targets. Now much of our work continues to be funded by thought-leading institutions, including the NIA, which has been a long-time supporter of our science from early preclinical work through the present. To date, we have received over $170 million in cumulative non-dilutive grant awards from the NIA through a highly competitive peer-reviewed application process which we view as a validation of our scientific foundation. We are in a unique position among peers that have the majority of our clinical trials funded by non-dilutive capital. In summary, Cognition Therapeutics is progressing on all our target indications. We are driven to execute on aggressive milestones we have set for our trials. As our work continues through the second half of 2023 and 2024, I want to express our gratitude to the community of patients and caregivers, to investigators who have shown such enthusiasm for our programs as well as to our partners and collaborators, the NIA and other leading institutions who have been generous in their support as well as to our team. We look forward to continuing work together towards our goal of developing new treatment based on sound science to address these formidable diseases. With that, I turn the call to John Doyle. John?

Thank you, Lisa. We moved through the second quarter on a sound financial footing. Our continued execution across operations, combined with the grant funding support from the NIA, the Michael J. Fox Foundation and other key associations have us positioned to advance CT1812 through the Phase 2 SHINE and SHIMMER trials. Since the company was founded, these associations have helped us raise approximately $171 million in non-dilutive funding, of which $81.8 million remains at the end of Q2 2023. Our commitment to financial stewardship, together with support from our grant funding enabled us to extend our cash runway through the third quarter of 2024. With that context, let’s now proceed to the financials for the second quarter of 2023. Research and development expenses were $8.5 million for the second quarter ended June 30, 2023 compared to $9.1 million for the same period in 2022. The decrease was primarily due to reduced spending with clinical research organizations and lower costs related to manufacturing and preclinical programs. General and administrative expenses for the second quarter ended June 30, 2023, were $3.3 million compared to $3.1 million for the 3 months ended June 30, 2022. The increase was mainly due to higher professional fees, partially offset by lower director and officer liability insurance and other expenses. The company reported a net loss of $4.7 million or $0.16 per basic and diluted share for the second quarter ended June 30, 2023, compared to a net loss of $5.8 million or $0.25 per share during the same period in 2022. As of June 30, 2023, we had $37.2 million in cash and cash equivalents. As previously mentioned, we estimate that this cash balance is sufficient to fund operations and capital expenditures through the third quarter of 2024. I’ll now turn the call back to the operator, who can open the call for questions.

Now your first question comes from the line of Mr. Charles Duncan of Cantor. Charles, your line is open.

Yes, good morning. Lisa, John, Anthony, thanks for taking our questions. Congrats on the recent progress and the SEQUEL data. I had a couple of questions on SHINE, however. Lisa, you mentioned the LEQEMBI approval. And I guess I’m wondering if you believe that that drug being approved may impact enrollment, if at all? Or are you seeing any impact on enrollment in SHINE and have you contemplated its availability when projecting enrollment patterns for the START Phase 2 that you have just kicking off now?

Got it. Great question. Thank you, Charles and good morning. With regard to LEQEMBI, what I can tell you is we are seeing – well, let me reverse what I said. With regard to our SHINE trial, we are continuing our enrollment and our goal is to have that trial completely enrolled by the end of this year. And when we are at that point, we’re going to let investors know we have achieved complete enrollment in the trial. So the answer to date is, no, we haven’t seen an impact on our enrollment. The thing to remember is LEQEMBI is out there. Doctors need to be aware of it, patients need to be aware of it and there needs to be pricing, right? The commercial launch and uptake is a lengthy process and it’s our belief that our trial will be fully enrolled at that time. Now I’m going to let Tony comment on how it impacts START. That was the second part of your question.

Right. Yes. So the START trial, which Lisa said that we’ve just brought on the first sites, that does allow for individuals to have been or be on antibody therapies provided they’ve been on for a sufficient period of time. So we obviously, like everybody else, do not know the speed of the uptake. But we have provisions in that trial. So they’ll be evenly balanced throughout the different groups.

Okay. So SHINE will not have LEQEMBI exposure; START may, but you’ve accommodated that in your projections in terms of enrollment. And then the question that I have, a follow-up question I had on SHINE. If that’s fully enrolled by the end of this year, when would you anticipate top line data from that trial?

Since it’s a 6-month trial, Charles, if the last patient comes in December, they complete the trial in June. There is a period of time over the summer months cleaning up the data, ensuring its rigor and veracity, if you will. So I would say – we would say at this time next year, we would be prepared to have top line data. That is somewhat of a moving target. If we’re able to move more quickly with accuracy, we will. The goal is 6 months from the last patient we begin that process.

Okay. And then with regard to START, just remind me, does that study incorporate an interim look? Could you just remind me or the audience?

Yes, it does not have an interim look. So it’s going to be one readout throughout the study. Now there are several assessments throughout the course of the study, but no interim analysis.

So data reads next year seem like from SHINE in mild-to-moderate Alzheimer’s and then SHIMMER in DLB. Correct?

That’s right. The goal is to complete enrollment in both of those trials this year. So the timeline for top line would be similar this time next year.

Okay. Good deal. Thanks for taking my question. Congrats on the recent progress.

Thank you, Charles.

The next question comes from the line of Mr. Jay Olson of Oppenheimer. Jay, your line is open. Please go ahead.

Hey, congrats on all the progress. And thank you for taking our questions. Can you talk about the feedback you received from KOLs following the top line results from SEQUEL?

We received a lot of questions from our investors, Jay. As you know, we have institutional investors and retail investors and the questions were around understanding the results better. So EEG, while it is a conventional tool, I would say, in MF, epilepsies, other forms of neurodegenerative disease, it’s being used increasingly in Alzheimer’s disease, but it’s not the first thing people think about. This was an exploratory study started several years ago and then interrupted in a meaningful way in terms of time by COVID. And so when we have the opportunity to go through with our investors, bankers, other professional colleagues, the data, they see the merit and the value of the study. The return to normal wave patterns—that is the proportion of alpha versus beta—then people better understand why we are so excited about the results to be able to show what looks like synapses behaving as they would in a healthy non-demented adult. We feel like that is extremely positive. And again, to show this in only 16 patients. So that is the feedback that we share with them. The nature of their questions is—help us understand what these results mean, how does this read on future trials? We feel that it is one more piece of evidence, as I said, next to target engagement, changes in brain structure, biomarker data. Now there’s neurophysiology data, another positive signal and when given the opportunity to explain those things, we feel that there is a good understanding of why we’re excited about this study.

Great. Thank you for that. And then just a follow-up on your comments about the potential synergy between CT1812 and an anti-amyloid antibody. And you mentioned specifically the lack of ARIA with a small molecule like CT1812, can you just talk about any preclinical work you’ve done looking at combinations? And since ARIA is a particularly serious problem in ApoE4 homozygotes, is that a population where you think CT1812 could have a superior overall risk-benefit profile?

Jay, what I can tell you is we have ApoE4 patients in our studies and down the road at the conclusion of the studies, likely there will be an opportunity to look at that population, but we’re not suggesting any differential response in those patients to date with regard to ARIA or any other side effect. It’s just too soon to tell. Did you want to comment further, Tony, about what we’re doing in combination?

Yes. So our combination data, again, will come from the START study, which is the 540 participants study in conjunction with Alzheimer’s Clinical Trial Consortium, which is allowing antibody therapy provided they’ve been on for a sufficient period of time. So at the conclusion of that study we will have some good data on whether there is an additive effect with the two together.

Okay. Great, thank you. We look forward to that. And also, we’re curious about any thoughts you had on biomarker that could be predictive or useful as a surrogate, as a predictor for neuro generation or synapse protection and potentially support an accelerated approval pathway for CT1812.

So we are looking broadly at biomarkers. As you’ve seen, we’ve pulled through spinal fluid from all of our individuals and done analyses on those before and after treatment and are looking now for candidates of drug exposure and disease modification. There are the obvious candidates, right, NFL, GFAP, things that others have used in the past which we’ll see once we’ve accumulated enough data, whether they might be able to be predictive of effect. And as I mentioned, we’re looking for novel markers as well.

Okay. Great, thank you. And then maybe if I could just sneak in one question on geographic atrophy. Can you just talk about how you see the treatment landscape evolving there where CT1812 would fit in and maybe the size of the commercial opportunity?

Well, Jay, based on the early market research we’ve done, it’s really—we’ve really looked at the size of the population, which, as you may be aware, is over twice the size of the Alzheimer’s population. It’s very, very large, that is to say, the dry AMD population. The target we’re going after will be an important commercial target; we believe the differentiation of our drug, we think is significant, right, patients taking an oral drug as opposed to having an injection. So the landscape, as you pointed out, has the approval of Iveric; you have out there, and they’re addressing the concerns that doctors have seen with their drug. There are many more drugs in the pipeline that are complement-driven and administered by intravitreal injection. And so our belief is we’re going to watch these drugs enter the market. Physicians will get educated on the fact that there are treatment options for this population, and we believe when we launch our drug could be a very reasonable first-line therapy for patients and perhaps even for patients that are not seeing significant enough benefit with the intravitreal injection. Now, all that remains in front of us. We have to prove the efficacy and safety of our drug first. But sitting here today, we believe that’s a really important potential market for us, a large market, one that offers convenience and perhaps improves safety because you’re not dealing with these injections.

Great. That’s super helpful. Thanks for taking all the questions.

Thank you, Jay.

Next question comes from the line of Mr. Aydin Huseynov from Ladenburg. Aydin, your line is open.

Good morning, everyone. Congratulations to the progress this quarter. And I appreciate taking the questions. Great questions so far from the colleagues. I just wanted to ask a couple of follow-up questions. So both of lecanemab, donanemab, they were considered initial success based on PET imaging levels of amyloid beta plaques. So if we—the target of CT1812 is to displace amyloid beta ligomers, do you think that the PET imaging with amyloid beta should be front and center in terms of the biomarker endpoints instead of new and exploratory biomarkers such as EEG?

Let me make a few comments, Aydin, and then turn it over to Tony. So our EEG study was designed as an exploratory study by our partners and colleagues in Amsterdam, who have a deep expertise in EEG across multiple neurodegenerative diseases. So we never intended it to be sort of front and center for regulatory approval, things of this nature; it was an opportunity to learn more about the drug impacting underlying disease pathways, and we did. That study is a success from our perspective. As for changing endpoints, in my experience in the industry, along with Tony and John, I think we would collectively say that changing endpoints is a bit like turning around a big ship in the ocean. I don’t think we’re going to see a change in endpoints for some period of time. Right now, we have two drugs that have gone through the approval process and are in the approval process and I don’t think that the FDA is going to look at other endpoints. I don’t know; we don’t know. We have to engage in those discussions before we know more.

Yes. I think another lesson for us, right, is that as we looked at the removal of plaque, as you mentioned, and the correlation between that and success of the trials, right? A mixed result with the Biogen study and then more successful with Eisai and Lilly. Now our drug is working right through a different mechanism, right? So rather than removing the plaque and thereby shifting the prevalence of the amyloid species, we’re blocking the ability of the low concentration but highly toxic oligomers from binding to their sites. Once we displace them, right, we have evidence that we can measure them in the interstitial space and then that we can clear them through this cerebrospinal fluid. So we believe we will prevent that toxicity. Now we don’t have a lot of evidence nor do we really believe that, that will lead to a large clearance of the larger plaque species. So while we think it may be an appropriate measure for the antibodies that we’ve seen recently, we don’t necessarily think it’s the best measure for our drug.

And therefore, a measure like cognitive function, ADAS-Cog 11 and CDR Sum of Boxes, these conventional endpoints are what we anticipate we would be discussing with the FDA.

Yes. Understood. Understood and when do you think you will have this initial data discussable with the FDA? Because if you look at these approvals, these drugs went initially through accelerated approval because of the biomarker data that we’re able to discuss. But when do you think you’ll have that data to discuss with the FDA?

Well, as we indicated a bit earlier on the call, Aydin, our goal is to complete enrollment for SHINE and SHIMMER—that is our dementia trials, mild-to-moderate AD and dementia with Lewy bodies. If we complete enrollment this year for 6-month studies, we anticipate having data at this time next year, cleaning up the data then positions us to sit down with the FDA and have those conversations. So the timing in response to your question is a year from now discussing the results of our dementia work with the agency.

Okay. Understood. Appreciate that. And one more question on the dry AMD study. So when do you think you will have initial efficacy data? And the second question regarding dry AMD is how do you plan to finance this study? Do you plan any partnerships?

With regard to when we’ll have the data, we need a run-in period of 1.5 years to enroll patients; then it’s an 18-month study. So there’ll be some period of time before we have data on this study. With regard to partnerships, we continue to talk to the strategics about their interest in our various indications; to date, we have no plans. We just continue to educate both investors and drug companies about the opportunity we’re creating with CT1812 in multiple indications.

Got it. Okay, thank you for taking my questions.

You are welcome, Aydin. Thank you.

No further questions at this time. I’ll turn the call back to the Cognition CEO for closing remarks. Ms. Ricciardi. Please go ahead.

Thank you, Jenny. To conclude, let me reiterate our commitment to leading scientific and clinical innovation in order to create disease-modifying therapies that are both accessible and convenient for patients and their caregivers. As we make progress in our work, we remain focused on delivering long-term value for our shareholders who have supported us in this process. Thank you for joining us today, everyone, and have a good morning.

Today’s conference call. You may now disconnect.