Cognition Therapeutics Inc Q1 FY2024 Earnings Call

Hello, and thank you for standing by. At this time, I would like to welcome you to the Cognition Therapeutics Second Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Please note that certain information discussed on the call today is covered by 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. With that, I would like to hand the call over to Lisa Ricciardi.

Thank you, operator, and good morning, everyone. Welcome to the Cognition Therapeutics second quarter 2024 results conference call. With me today are Lisa Ricciardi, President and Chief Executive Officer; John Doyle, Chief Financial Officer; and Tony Caggiano, Chief Medical Officer. This morning, the company issued a press release detailing its financial results for the second quarter and first half of the 2024 fiscal year. We encourage everyone to read this morning's press release as well as Cognition's quarterly report on Form 10-Q, annual report on Form 10-K, and periodic reports on Form 8-K, which are now filed with the SEC and available on our website. This conference call is being webcast through the company's website and will be archived for 30 days. Please note that this conference call contains time-sensitive information, which 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 turn the call over to Lisa Ricciardi. Lisa?

Thank you, Tom, and good morning, everyone. We appreciate your participation in Cognition Therapeutics' financial results conference call. Today, our CFO, John Doyle, and I will share prepared remarks on the company's progress and financial performance over the first half of the year, after which, we'll take your questions. For Q&A, we will be joined by our Chief Medical Officer and Head of R&D, Dr. Tony Caggiano. At Cognition Therapeutics, our focus is on the development of innovative, orally available drug candidates targeting age-related degenerative conditions of the CNS and retina. Our clinical programs include multiple Phase 2 trials for both early and mild to moderate Alzheimer's disease. We are also studying CT1812 in dementia with Lewy bodies and geographic atrophy, secondary to dry AMD. Now during today's call, my formal remarks will be on the completed SHINE trial, and then on our next study to read out, the SHIMMER trial. Let's begin with SHINE. Our SHINE study was a Phase 2 clinical trial, proof-of-concept study of CT1812 in mild to moderate Alzheimer's disease. This was our first proof-of-concept study. The trial enrolled a total of 153 adults with mild to moderate Alzheimer's disease. Participants were randomized to receive either placebo or oral doses of 100 or 300 milligrams of CT1812, and there were 51 participants in each arm of the study. Our primary purpose was to assess safety and tolerability after 6 months of daily dosing. We also evaluated multiple cognitive endpoints, including the ADAS-Cog 11, ADAS-Cog 13, cognitive composite, and the MMSE. Functional improvement scales were included as were biomarker analyses. In this study, participants treated with CT1812 for six months showed a consistent trend in slowing cognitive decline compared to placebo across all cognitive measures, including the ADAS-Cog 11, ADAS-Cog 13, cognitive composite, and MMSE. On the most commonly used measure, the ADAS-Cog 11 and 13 scales, CT1812 treated participants showed a 39% slowing of cognitive decline after six months. In contrast, the recently approved monoclonal antibodies demonstrated a 25% to 30% slowing in an early patient population over 18 months. We are very encouraged by the 39% slowing in six months with a once-daily pill. Furthermore, on the ADAS-Cog 11 and MMSE scale at day 98, the midpoint of the study, in the combined 100- and 300-milligram dose group, P-values of less than 0.05 were observed. Contextualizing the full SHINE data readouts from the completed trial, participants on placebo in the intent-to-treat analysis worsened by 2.7 points as measured by ADAS-Cog 11. In the pooled 100- and 300-milligram dose group, there was a reduction of 1.66 points or a 39% lower loss of cognition than in the placebo group. In other words, CT1812 rescued about 40% of the cognitive decline that participants could have experienced. In this trial, we used the functional measures of the ADCS-ADL or activities of daily living and the ADCS-CGIC, the Clinical Global Impression of Change. CT1812 demonstrated a slowing of loss of function toward the latter part of the trial. While the trial enrolled 150 participants or approximately 50 people per arm, the SHINE trial did not achieve statistical significance on the ADAS-Cog 11 scale. However, the important part is that the multiple measures we assessed show a consistency across time and dose that is positive. It is this consistency that motivates us to look ahead to longer and larger trials. Regarding safety, CT1812 demonstrated a favorable safety and tolerability profile with most treatment adverse events being mild or moderate. The adverse events were consistent with previous clinical experience. There was one case of asymptomatic ARIA-H and no cases of ARIA-E. At the 300-milligram dose, nine participants experienced treatment-emergent LFT increases greater than 3 times the upper limit of normal. These resolved after cessation of the drug without evidence of serious liver injuries. Importantly, there were no LFT elevations observed in the 100-milligram dose. This data is all publicly available on our website. We are continuing to analyze the exploratory CSF biomarker program data. The study showed significant changes in neurofilament light (NfL), which is a marker of neurodegenerative disease. This occurred at the 300-milligram dose. We believe that this is evidence that CT1812 acts as a synaptoprotective agent. Other CSF biomarkers assessed, including neurogranin, synaptotagmin, SNAP-25, p-Tau, total Tau, and g-Tau, will be shared in the future as we continue analyzing biomarker data from this trial. Overall, we believe these findings provide evidence that amyloid oligomer antagonism, a new and distinct mechanism for therapeutic intervention, may have a role as a monotherapy or as a drug used in combination with approved drugs for the treatment of Alzheimer's disease and other dementias. We met our key objectives of assessing safety, tolerability, and cognitive and functional changes. We learned that the 100-milligram dose showed good efficacy and had no incidence of elevated liver enzymes or discontinuations due to adverse events. There were no new safety signals in the SHINE trial. We have a strong and consistent trend demonstrating potential efficacy in slowing cognitive decline in patients with mild to moderate disease. We believe the magnitude of effect is consistent with other drugs recently developed and approved. We believe the biomarker data supports the true slowing of neurodegeneration. During our time in Philadelphia last week at the AAIC Conference, we had the opportunity to speak with multiple physicians and principal investigators from the SHINE trial. They were very supportive of the trial results, particularly regarding the consistency of cognitive changes across the scales. They value the new safety information and profile of the 100-milligram dose group. Consistent with feedback from various investors, principal investigators are interested in the next steps in terms of the new trial, duration, dose, patient population, endpoints, and trial size. We also know that pharmaceutical groups that have winnowed CNS programs over the years are now looking to add important CNS drugs to their portfolios. For many, Alzheimer's disease is a top target. We are looking forward to continuing our dialogue with these companies. Our next step is to convene a panel of leading neurologists to review our data and discuss their thoughts on the next steps in CT1812 drug development. I would now like to turn to the SHIMMER study, which is our next data readout. This Phase 2 trial with CT1812 enrolled 130 people with mild to moderate dementia with Lewy bodies or DLB. As a reminder, there are an estimated 1.5 million people in the U.S. affected by DLB, which is the second most common form of dementia. These patients are characterized by dementia, mobility issues, visual and sensory hallucinations, and significant gastrointestinal issues. There are currently no approved treatment options. Pathologically, more than half of the DLB patients are estimated to have both alpha-synuclein and Abeta oligomers in their brains. We believe that CT1812, with its novel mechanism of action, can protect neurons from the toxicity of both pathogenic proteins, thus having the potential to treat DLB patients. This is a double-blind, randomized 3-arm study. Patients are randomized 1:1:1 to receive 100 or 300 milligrams of CT1812 or placebo. This study is not powered to show significance. It is designed as a proof-of-concept study to determine the change in the MoCA, the Montreal Cognitive Assessment scale, after six months of receiving CT1812 or placebo. This trial is supported by non-dilutive funding from the NIH and is being led by Dr. James Galvin from the University of Miami Miller School of Medicine. We have completed enrollment and expect to report top-line results by year-end. We believe the SHIMMER trial results will add to the understanding of CT1812's potential for treating neurodegenerative disease. Like the patients in the SHINE trial, we look forward to providing patients and caregivers with effective, convenient options to slow the progress of DLB. Now a word about our other two trials. In brief, the START trial is actively recruiting participants with early Alzheimer's disease. Participants on stable background therapy with lecanemab and donanemab will be allowed to enroll in the trial, which we expect will provide real-world evidence of CT1812's potential as a monotherapy and in combination with monoclonal antibody treatment. We're also actively enrolling participants in our MAGNIFY study, which is a randomized placebo-controlled Phase 2 study involving 240 participants who have dry age-related macular degeneration and measurable geographic atrophy. Over the treatment period, change in lesion size and best-corrected visual acuity will be assessed to determine if CT1812 can slow vision loss. During this past year, Cognition scientists published multiple manuscripts and made at least nine presentations at medical and scientific conferences. All the publications are available on our website. Importantly, the scientific evidence generated by our team continues to support our development efforts, providing insights into proteins and biological processes impacted by CT1812 in neurological conditions and conditions related to ophthalmology. In closing, in 2024, we have made significant progress advancing CT1812, and we believe this drug has the potential to be an important part of the developing paradigm for dementia treatments. With that, I turn the call over to John Doyle for a review of our results.

Thank you, Lisa. For the first half of 2024, we continue to execute with financial stewardship by efficiently managing our resources and leveraging NIA grant funding to support our clinical programs. As of June 30, 2024, our cash and cash equivalents were approximately $28.5 million, and total grant funds remaining from the NIA were $57.3 million. The company estimates that it has sufficient cash to fund operations and capital expenditures into the second quarter of 2025. Research and development expenses were $11.6 million for the second quarter ended June 30, 2024, compared to $8.5 million for the comparable period in 2023. This increase was primarily related to higher costs associated with advancing our clinical programs, including Phase 2 trial activities, contract research organizations, and personnel costs. General and administrative expenses were $3.1 million for the second quarter ended June 30, 2024, compared to $3.3 million for the comparable period in 2023. The decrease was primarily related to lower professional services. The company reported a net loss of $7 million or $0.18 per basic and diluted share for the second quarter ended June 30, 2024, compared to a net loss of $4.7 million or $0.16 per basic and diluted share for the same period in 2023. I'll now turn the call back over to the operator, who can open the call to questions.

Floor is now open for your questions. The first question comes from Charles Duncan from Cantor Fitzgerald.

Hi, this is Elaine Kim on behalf of Charles Duncan. Thank you for taking our questions. So in the SHINE trial, the 100 mg dose did not meaningfully alter the AB 40 and 42 levels, while the 300 mg did. But with the changes with the 100 mg dose perhaps being more pronounced after a year of dosing versus the six months? And I have a follow-up.

Tony, do you want to address that? Thank you, Elaine.

Yes. Elaine, you're right. The 100-milligram dose did not significantly alter the A-beta monomers in the same way that the 300-milligram dose had. I think a more relevant biomarker here is the NfL, which is a marker of general neurodegeneration, where we saw a really robust change at both the 300 mg and the 100 mg doses. We believe that the monomers are part of the basic mechanism of our receptor rather than a key part of the disease-modifying process that you see here. To further answer your question about longer trials, we do expect that with longer trials, such as 12- or 18-month trials, we would then begin to see more of the downstream biomarkers moving as well.

Got it. Okay. That makes sense. Thank you. And for the follow-up, your cash runway is into the second quarter of 2025. How do you plan on lengthening that runway and supporting later-stage trials? And then maybe jumping the gun, but maybe up to Phase 3, how do you plan on doing that?

Yes. Thank you, Elaine. There are many things that we need to evaluate. We have numerous options available to us. So as we look to extend our runway, we will certainly take all of those into consideration and move forward as we design the next stage of those trials.

Thanks very much for taking my questions. First of all, somewhat intellectually provocative one, if I may. There was some discussion at AAIC in Philadelphia last month about the potential applicability of GLP-1 receptor agonism to the treatment of Alzheimer's disease. Do you think there could be any synergistic activity of CT1812 with GLP-1 receptor agonists specifically in the context of Alzheimer's?

That's a very interesting question, Ram. Tony, any thoughts on that?

Sure. Yes, interesting. I think, obviously, the world is very interested to see how the GLP-1s behave in Alzheimer's disease. Given the mechanism of our drug is a very basic upstream interaction within the basic pathophysiology of Alzheimer's disease, we believe CT1812 has the potential as a monotherapy as well as in conjunction with other therapies. We are certainly interested in seeing it with current approved therapies, and if GLP-1 were to be approved for Alzheimer's disease, it would be very interesting to observe how they would work together. Perhaps in the future, we'll see that data.

Great. And then just a quick follow-up on the dosage. I was wondering if there were doses intermediate between the 100 and the 300 that you would consider assessing further in clinical development? Or if at this juncture, you've ruled that out? If you were to study intermediate doses, which ones do you think are likely to be most appropriate?

Yes. We do have intermediate doses being studied right now. In our START trial, which is the 540 participant study in early Alzheimer's disease, we have a 200-milligram dose. In our MAGNIFY trial, which is the study in dry AMD, we also have the 200-milligram dose. We introduced those doses a couple of years back for this very reason, believing that it might be a very nice sweet spot, where we see really good efficacy, but fewer adverse events. So those doses are already in the clinic, and it's likely that we'll see them again in the future.

Can you hear me?

Yes, Mayank. Good morning.

This is Kevin Kuo on behalf of Mayank. Thanks for taking our question.

Great. Hi, Kevin.

Now that we saw the details from the SHINE trial, just wondering if you can talk about your expectation for your SHIMMER trial later this year, and specifically, maybe your expectation for new biomarkers that such as GFAP that may not be as relevant in different disease groups like Alzheimer, but maybe have different actions in DLB disease. And maybe if you can point to whether you still expect the 300-milligram dose to have some liver insight signal?

I think there were three questions. Kevin, you broke up in the middle. One is overall expectations for SHIMMER. Second, you were looking for a read on a number of the biomarkers. The last thing you mentioned was the 300-milligram dose. I'll turn those three questions over to Tony.

Sure. Thank you. Right. The SHIMMER study is designed very much like the SHINE study was, enrolling a similar number of individuals as the first proof-of-concept study, where we're really looking again for safety and tolerability, along with a clear and consistent trend that we can slow the progression of the disease across multiple outcome measures. We are looking for a readout towards the end of this year. As for the biomarkers, the profile and changes within DLB are not as well studied or predictable as they currently are in Alzheimer's disease. However, we have a robust program looking at changes in biomarkers from both cerebrospinal fluid (CSF) and blood, examining both canonical and emerging biomarkers as you've seen in our previous publications. We look forward to observing those changes. Regarding the liver signal, we would expect the same results in these individuals. Given that they are nearly the same age, we do not foresee anything different. So, obviously, we will know more when that data reports out.

Hey, good morning, guys. Thank you for taking the question.

Good morning, Daniil.

First, on the SHINE, having had a bit of time to look through the data, what do you think are the key learnings from SHINE that you'll incorporate into the next trial outside of being a larger and longer trial?

Great question, Tony?

Sure. The key learnings show a consistent and clear trend across all of the cognitive outcome measures that we can slow disease progression. More specifically, we see the magnitude of effect and variance. This study now allows us to power future studies. We observed nearly a 40% decrease in progression as per the ADAS-Cog scales, so we can now look into the next round of larger and longer studies to see these changes. We've also nicely identified a dose range where we see effects without significant adverse events. Indeed, as Lisa mentioned, there were no discontinuations due to AEs in the 100-milligram dose and no changes in liver enzymes. So we have a very good basis to operate from for future studies.

With the recent approvals in Alzheimer's, how did that affect the enrollment rate for your CT1812 trials? Relatedly, what fraction of participants in the START trial do you expect to be on concurrent approved Alzheimer's disease medications?

Tony?

The inclusion criteria or the patient population for the monoclonal antibodies and our SHINE participants are somewhat different, though there is overlap. So I'm not sure it really impacted recruitment. Overall, having these drugs available for Alzheimer's disease has indeed raised awareness, so people are coming into clinics interested in participating. Thus, I would consider it a boost. However, it's a somewhat distinct population. Regarding how many individuals will be part of the START trial on approved monoclonal antibodies, that's still a bit uncertain. One of the antibodies was launched not long ago, so we are observing how it penetrates the market. The other antibody just received approval and is just launching now. We will stratify all individuals in that study to ensure an even distribution of participants on monoclonal antibodies across the different treatment groups, allowing us a good look at the safety and tolerability of combined treatments and the possibility of additive effects.

There are no further questions at this time. So I'll turn the call back over to Lisa Ricciardi, CEO.

Thank you. To conclude, we are focused on advancing our work to find a treatment to improve the lives of those afflicted with neurodegenerative diseases. The science is sound, we are compelled to move forward, and we continue to build evidence about what CT1812 can do for patients. Thank you for joining us today.

Conference has now concluded. You may now disconnect.