Q2 2023 Cognition Therapeutics Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to cognition Therapeutics tack on QUADRA Chinese Chinese <unk> earnings Conference call. My name is Jenny and I will be your confidence operator today. This call is being recorded I would like to turn the presentation I'll bring out your hosts for today's call Danielle.
So watching investor release, I, just spoke of Michelle paid off here at.
Please proceed Mr Kleinfeld watching.
Okay.
Good morning, and thank you for participating in cognizant Therapeutics conference call today with me today are research already President and Chief Executive Officer of cognition Therapeutics, and John Doyle, Chief Financial Officer of Prohibition.
Press release detailing cognizant therapeutics second quarter 2023 results is available on the investors section of our website at <unk> Dot com, we encourage everyone to read this morning's press release as well as Cognitions quarterly report on Form 10-Q, which has 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 provision of the.
Private Securities Litigation Reform Act, we caution listeners that during this call management will be making forward looking statements.
Results could differ materially from those stated or implied by these forward looking statements.
The risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in cognition 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 like Wildcats accomplished.
Accomplishing 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 <unk>, 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 a compelling evidence for the neuroprotective effect.
Of orally delivered C. T 18, 12, our lead candidate our most recent evidence comes from the sequel trial results, which will be covering in this call. As a reminder for investors. We have important data on multiple fronts first we've shown that C. G 18, 12 engages its target the Sigma.
Two receptor.
Second this engagement has physiologic consequences demonstrated by the results of anatomical endpoints and 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 the added neurophysiology evidence demonstrating the C. T 18, 12 improved brain activity and connectivity compared to placebo as measured by quantitative E. G. In our sequel study as our research and clinical development operations team work diligently to progress C T.
18, 12, we are pleased to see the most positive the recent positive events in the Alzheimer's field, including the full approval of <unk> can be Lilly and as I 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 neuro degeneration in Alzheimers disease oligomers are an early stage product is the brain moves from mom averse to a beta plaques. We believe this is the ultimate the optimal target in Alzheimers disease.
Mounting evidence demonstrates a neuro protective mechanism of action of C. T 18, 12, which prevents the binding of oligomers to neurons by modulating. The Sigma two receptor by doing so see T. 18, 12 has the potential to prevent the loss of synapses, and thus may slow or stop.
The progression of cognitive impairment as other biologics join looking beyond the market. We believe that C. T 18, 12, an oral agent may be complementary to these approaches by acting on this novel mechanism. We do not anticipate incidence of ARIA and we have not seen any to date.
Our studies, we also believe that administration of an oral drug will likely lead 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 topline results from our exploratory sequel quantitative.
E G study.
The trial Phase II trial was conducted in the Netherlands was 16 people, who have mild to moderate alzheimers disease. The topline data showed evidence. The C. T 18, 12 had a direct impact on synapse function as measured by a positive change in the makeup or the composition of brain waves.
Specifically, we saw proportionally fewer slow or state of 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.
T 18, 12 also improves the connectivity between brain regions, which may allow for more ready exchange of information between the regions in the sequel trial, we observed changes in brain waves that are consistent with restoring wave pattern to that of healthy adults in just four.
Thanks for a chronic neurodegenerative diseases 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 two start trial for early Alzheimer's disease has activated the first clinical site. Our trial is being conjunct conducted with our partner the Alzheimers clinical trial consortium or the AC T. C. We expect 50 to 60.
Sites in North America to enroll patients with disease. These patients will be randomized to receive once daily C. T 18, 12 or placebo for 18 months.
Also in July we announced that are magnified trial dose. The first participant. This trial is designed to study the efficacy of C. T 18, 12 in people with geographic atrophy or G E.
Secondary to dry age related macular degeneration.
<unk> is a randomized placebo controlled trial that is expected to enroll 246 adults 246, adults who have been diagnosed with dry AMD with measurable geographic atrophy.
In the context of dry AMD.
T 18, 12 as a once daily oral drug has the potential to offer a noninvasive alternative to the approved treatment, which is administered as an interim vitriol injection. In this study C. T 18, 12 will be given for 24 months with an assessment to measure the slowing of disease progression.
<unk> as measured by changes in the geographic atrophy lesion size.
Now I'd 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 two receptors from basic biology to therapeutic target provides a comprehensive review of the biology.
And function of the Sigma two receptor and its potential as a therapeutic target for age related neuro degenerative diseases, including Alzheimer's disease dementia, with lewy bodies and dry age related macular degeneration. The work cited in this publication is exhausted 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 proteomics studies at the a D. P. D conference in Sweden, our team demonstrated the effects of C. T 18, 12, and altering Alzheimers disease biology and analysis.
<unk> of the impact of C. T 18, 12 on pathways implicated in dry AMD age related macular degeneration, which presented in April at the ARVO meeting and just two weeks ago, we presented confirmatory pathway analyses in a mouse model of Alzheimer's disease at the a I.
C meeting in Amsterdam set another way, we have shown consistent measurable proteomics impact across our targets now much of our work continues to be funded by thought leading institutions, including the N. I a N I E, which has been a longtime supporter of our science from early preclinical work.
Through the present to date, we have received over 170 million in cumulative non dilutive Grant award from the NIH 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.
<unk> appears to have the majority of our clinical trials funded by non dilutive capital in.
In summary, cognition therapeutics is progressing on all our targeted indications we are driven to execute an 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.
Two investigators who have shown such enthusiasm for our programs as well as to our partners and collaborators the NIH 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 move through the second quarter on a sound financial footing, our continued execution across operations combined with the grant funding support from the NIH, The Michael J Fox Foundation, and other key associations have us positioned.
<unk> to advance D. T 18, 12 through the phase III Shine and Shimmer trials since the company was founded these associations have helped us raise approximately $171 million and non dilutive funding of which $81.8 million remains at the end of Q2 2023, our commitment to financial stewardship together.
Support from a grant funding enable us to extend our cash runway to 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 32023, 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 32023, or $3 3 million compared to $3 1 million three months ended June 32022.
The increase was mainly due to higher professional fees, partially offset by lower director and officer liability insurance and other expenses the.
The company reported a net loss of $4 7 million or <unk> 16 per basic and diluted share for the second quarter ended June 32023, compared to a net loss of $5 8 million from 25 per share during the same period in 2022.
As of June 32023, 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 operator.
I would like to remind everyone. It was going to ask a question press is high then the number one on your telephone keypad now. Your first question comes from the line off let me say trials then Ken of Cotton Chair Charles Your line is open.
Hey, yeah.
Good morning, Lee said, John Anthony Thanks for taking my questions. Congrats on the recent progress and the sequel data I had a couple of questions.
Shine however.
Lisa you mentioned that look can be approval and I guess I'm wondering if you believe that that drug being approved.
The impact enrollment if it's at all or are you seeing any impact on enrollment and shine and have you contemplated its availability when projecting enrollment patterns for that start phase two.
Just kicking off now.
Got it great question, Thank you Chad and good morning.
With regard to law can be 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 secured complete enrollment in the trial. So the answer to date is no we haven't seen any.
Impact are on our enrollment the thing to remember is look can be 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.
The Star trial, which you know.
Elisa said, we've just brought on the first sites.
That does allow for individuals to have been or beyond antibody therapies provided they've been on for a sufficient period of time.
Sure.
We obviously like everybody else do not know the speed of the uptake, but we have provisions in that trial, so there'll be evenly balanced throughout the different groups.
Okay. So shine will not have a look can be exposure start may but you've accommodated that in your projections in terms of enrollment.
And then the question that I have follow up question I had on shine.
It's fully enrolled by the end of this year when would you anticipate top line data from from that trial.
Since it's a six month trial chassis. 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 brass city. If you will so I would say we would say at this time next year, we would be prepared to have topline data that is somewhat of a moving target. If we're able to move more quickly with accuracy we will.
The goal is six months from the last patient we begin that process.
Okay, and then with regard to start just remind me does that's an 18 month study. So I guess I'm wondering if if it incorporates an interim look could.
Could you just remind me or the audience.
Tony Yes, it does not have an interim look.
So it's going to be one one readouts throughout the study now there are.
Several assessments throughout the course of the studies, but no interim analysis.
Okay.
So data read next year seem like from Schein and mild to moderate Alzheimer's and then Shimmer in D. L. B correct right Mhm, that's right. The goal is to complete enrollment in both of those trials. This year. So the timeline with poor top line would be similar this time next year.
Okay. Good deal thanks for taking my questions. Congrats on the recent progress.
Thank you for your chest.
The next question comes from the line of me, saying, Hey, all of a cent of Oppenheimer. Jay. Your line is open. Please go ahead.
Oh, 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 <unk>.
Topline results from sequel.
Okay.
We received a lot of questions from.
Sure investors Jay as you know, we have institutional investors and retail investors and the questions were around understanding the results better. So E. G. While it is a conventional tool I would say in MF epilepsies epilepsy other forms of Neurodegenerative disease.
It's being used increasingly in alzheimers 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.
No other professional colleagues the data they see the merit in the value of the study the return to normal wave pattern that is the proportion of alpha versus beta than people do understand better why we are so excited about the results to be able to show what looks like an app.
Is 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 or 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 Theres neurophysiology data another positive signal.
And when given the opportunity to explain those things we feel that there is 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 C. T 18 12.
And an anti amyloid antibody.
You mentioned, specifically the lack of ARIA with a small molecule like <unk> as well can you just talk about any preclinical work you've done looking at combinations and since ARIA is particularly serious problem and paper before homozygotes.
Is that a population where you think <unk> seen 12 could have a superior overall risk benefit profile.
Jay what I can tell you is we have a bogey for patients in our studies and down the road at the conclusion of the studies likely there'll be an opportunity to look at that population, but we're not.
Suggesting any differential response in those patients to date with regard to <unk> or any other side effect, it's just too soon.
To tell you.
Did you want to comment further Tony about work, we're doing combination.
Yes, so our combination data again will come from the start study, which is the 540.
Participants study in conjunction with Alzheimers clinical trial consortium, which is allowing antibody therapy provided they've been on for a sufficient period of time.
So at the conclusion that data we will have so I mean, a collusion that study we'll 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 are curious about any thoughts you had on the.
Biomarker that could be.
Predictive or useful as a surrogate.
As a predictor for nearer generation, our synapse protection.
Potentially so.
For an accelerated approval pathway for <unk> 12.
So we are looking broadly at Biomarkers.
As you've seen.
Pull through of spinal fluid from all of our individuals in the proteome analyses on those before and after treatment and are looking now for candidates.
Drug exposure and disease modification.
Yes.
Candidates NFL Jeff.
That others have used in the past.
Which we'll see once we have 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 were <unk> 12 would fit in in maybe the.
Sorry is that the commercial opportunity.
Well Jay based on the early market research. We've done it's really look 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.
He will be an important commercial target we believes 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 a Eric you have of pellets out there and they are 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 <unk> 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 draw.
It could be a very reasonable first line therapy for patients and perhaps even for patients that are not seeing significant enough benefit with the interim vitriol 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.
<unk> potential market for us a large market one that offers convenience and perhaps improve safety because you're not dealing with these injections.
Great. That's super helpful. Thanks for taking all the questions.
Thank you Jay.
Yes.
Next question comes from the line of me say Eaton Hossein up from Ladenburg, Hey, Dan Your line is open.
Good morning, everyone.
I'm glad relations with our progress this quarter.
Taking the questions great.
Great question, so far from the colleagues I just wanted to ask couple of follow up.
Question. So both of the economy, the non them up they were considered initial success with <unk>.
Imaging coke level, so I'm gonna look better plus.
What's the target of <unk>.
Well, we still displays amyloid pet oligomers, so think of.
As a pet imaging with envelope plus should be front and center in terms of the biomarker endpoints instead of new exploratory.
Biomarkers such as E G.
Hum.
Let me make a few comments agent and then turn it over to Tony So our E. G study was designed as an exploratory study by our partners and colleagues in Amsterdam, who have a deep expertise in E. G across multiple neuro degenerative diseases. So we never intended it to be.
Sort of front and center 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 changing endpoints is a bit like turning around a big ship in the Ocean I don't think were 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.
In our 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.
Yeah, I think another lesson for us is that the.
As we looked at the removal of plaque as you've mentioned and the correlation between that and success of the trials are.
A mixed result.
Yes.
Biogen studies, and then more successful with <unk> and Lilly.
Now our drug is working right through a different mechanism right. So we're rather than removing the plaque and thereby shifting.
The prevalence of 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 interest visual space and then that we can clear them through the cerebral spinal fluid.
So we believe that we will prevent that toxicity that we don't have a lot of evidence nor do we really believe that that will lead to a large clearance of the larger black 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, the measures like cognitive function Adas Cog 11, CVR sum of box disease conventional endpoints are what we anticipate we would be discussing with the FDA.
Yes.
Understood and then when do you think you will have this.
Initial data discussed with the FDA.
We believe this approval.
Drugs with initially through accelerated approval because of the biomarker data that we were able to discuss but when do you think you will have that data to discuss with you.
Well as we indicated a bit earlier on the call the agent and our goal is to complete enrollment for schein and shimmer that as our dementia trials mild to moderate ADN dementia with lewy bodies. If we complete enrollment this year for six months studies, we anticipate having data at this time next year cleaning up the data then.
<unk> us to sit down with the FDA and have those conversations.
So timing in response to your question is a year from now discussing.
The results of our dementia work with the agency.
Okay understood I appreciate that and one more question on dry AMD study.
So when do you think you will have initial efficacy data and.
The second question, Brian 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 year year and a half 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 strategic about their interest in our various indications to date. We have no plans. We just continued to educate both investors and drug companies about the opportunity, we're creating with C. T 18 12.
In multiple indications.
Product okay. Thanks for taking my questions Youre welcome and thank you.
No further questions at this time I will turn that call back to Jack cognition CEO for closing remarks, Ms. Irish Heidi. Please go ahead. Thank.
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.
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