Q2 2024 Cassava Sciences Inc Earnings Call and Business Update

Welcome to Cassava Sciences report for the second quarter 2024. At this time, all participants are in a listen-only mode. A question and answer session will follow the former presentation. As a reminder, this webcast is being recorded.

Speaker Change: During this call and the question and answer session afterwards, representatives of Cassava Sciences may make what are known as forward-looking statements.

A forward-looking statement is one that is not a historical fact. Forward-looking statements are not guarantees, and they involve risks, uncertainties, and assumptions.

Such statements represent current expectations or beliefs concerning future events or future performance.

Speaker Change: Forward-looking statements are predictions only based upon information currently available to the company. Actual events or results could differ materially from those made in any forward-looking statements due to a number of factors, risks, and uncertainties.

Please refer to Cassava Sciences' recent filings with the SEC including Form 10-K for a description of the factors that could cause the events or results to differ materially from those made in forward-looking statements.

Speaker Change: Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live webcast, the 8th of August , 2024.

Exact as required by law, the company undertakes no obligation to revise or update any forward-looking statements to reflect events and circumstances after the date of this webcast.

It is now my pleasure to turn today's meeting over to Rick Barry, Executive Chairman of the Board of Directors. The floor is yours.

Rick Barry: Thank you, Judith. Good morning and thank you for joining us.

Speaker Change: With me today are three key members of the Cassava team. Dr. Jim Kupec, our Chief Medical Officer, Eric Schon, Cassava's Chief Financial Officer, and Chris Cook, our General Counsel and internal Swiss Army knife.

Speaker Change: You'll be meeting other talented players on the team in the future.

Rick Barry: We have a lot of material to cover this morning, so I'll get right to it.

Rick Barry: By now you have hopefully seen the press release that we put out this morning that discusses some of our progress during the second quarter. Specifically, we highlighted the progress in our phase 3 trials.

Rick Barry: The execution of these trials has been impressive.

Rick Barry: We expect our last patient last visit in our rethink trial in early Q4, and a top-line readout of the data by year-end.

Rick Barry: We also expect our second Phase III trial, Refocus, to read out in mid-year.

Rick Barry: We remain optimistic about the results of these trials. We think they are well-powered to demonstrate a statistically significant difference between the drug and placebo arms.

in the second quarter of 2024.

Speaker Change: But investors should keep in mind that no one can correctly forecast the results of any trial. There are, of course, no guarantees.

Operator: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the former presentation. As a reminder, this webcast is being recorded. During this call and a question-and-answer session afterwards, representatives of Cassava Sciences may make what are known as forward-looking statements. A forward-looking statement is one of that is not a historical fact. Forward-looking statements are not guarantees and they involve risks on certainties and assumptions. Such statements represent current expectations or beliefs concerning future events or future performance. Forward-looking statements are predictions only based on upon information currently available to the company. Actual events or results could differ materially from those made in any forward-looking statements due to a number of factors, risks, and uncertainties.

Operator: Please refer to Cassava Sciences' recent filings with the SEC, including Form 10K, for a description of the factors that could cause the events or results to differ materially from those made in forward-looking statements.

Speaker Change: Earlier in the second quarter.

Operator: Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live webcast, the 8th of August, 2024. Exept as required by law, the company undertakes no obligation to revise or update any forward-looking statements to reflect events and circumstances after the date of this webcast.

Rick Barry: Cassava raised $123 million from the warrants that we distributed to shareholders in January .

Richard Barry: It is now my pleasure to turn today's meeting over to Rick Berry, executive chairman of the Board of Directors, the floor is yours. Thank you, Judith. Good morning and thank you for joining us. With me today are three key members of the Cassava team, Dr. Jim Kupek, our chief medical officer, Eric Schoen, Cassava's chief financial officer, and Chris Cook, our general counsel and internal Swiss Army knife. You'll be meeting other talented players on the team in the future.

Rick Barry: The warrants allowed shareholders to invest directly in the company or to sell their warrants in the open market. The funds that we raised from the program significantly strengthened our balance sheet.

Richard Barry: We have a lot of material to cover this morning, so I'll get right to it. By now you have hopefully seen the press release that we put out this morning that discusses some of our progress during the second quarter. Specifically, we highlighted the progress in our phase three trials. The execution of these trials has been impressive. We expect our last patient last visit in our rethink trial in early Q4 and a top line readout of the data by year end.

Richard Barry: We also expect our second phase three trial we focus to read out in mid-year. We remain optimistic about the results of these trials. We think they are well-powered to demonstrate a statistically significant difference between the drug and placebo arms, but investors should keep in mind that no one can correctly forecast the results of any trial. There are of course no guarantees. Earlier in the second quarter, Cassava raised $123 million from the warrants that we distributed to shareholders in January.

Speaker Change: As a reminder, several of us inside the company converted all or a portion of our warrants into stock, including me. I converted every warrant that was available to me.

Rick Barry: Suffice it to say that we are believers.

Rick Barry: We expect to end 2024 with a cash balance of between $117 and $127 million.

Richard Barry: The warrants allowed shareholders to invest directly in the company or to sell their warrants in the open market. The funds that we raised in the program significantly strengthened our balance. As a reminder, several of us inside the company converted all or a portion of our warrants into stock, including me, I converted every warrant that was available to me. Suffice it to say that we are believers. We expect to end 2024 with a cash balance of between 117 and 127 million, which will allow us enough liquidity to get past our phase 3 readouts.

Rick Barry: which will allow us enough liquidity to get past our phase 3 readouts. And by the way, that cash number includes the impact of our potential settlement, which I will discuss shortly.

Rick Barry: We are very grateful for the confidence that investors have demonstrated in Cassava.

Rick Barry: Just last week, we announced that we are lengthening our open-label extension trials for both our Phase II and Phase III patients. I want to take a minute to explain why we thought this was important.

Rick Barry: Prior to making this change, patients who participated in our Phase II program had the opportunity, but not the requirement, to remain on our drug Simifilum for an additional two years.

Richard Barry: And by the way, that cash number includes the impact of our potential settlement, which I will discuss shortly. We are very grateful for the confidence and investors that demonstrated in Cassava. Just last week, we announced that we are lengthening our open-label extension trials for both our phase 2 and phase 3 patients. I want to take a minute to explain why we thought this was important. Prior to making this change, patients who participated in our phase 2 program had the opportunity, but not the requirement, to remain on our drug, synophon, for an additional two years.

Rick Barry: After being on the drug, in some cases for four years, some of these Phase II patients were losing access to it.

Rick Barry: In our Phase III program, patients have the opportunity to go on Sinophilim for 12 months after completing the trial. It is important for our patients to have continued access to our drug.

Rick Barry: Just imagine being the patient, or the loved one of a patient, who was on the drug and had perceived that the patient had received a benefit from the drug, but who'd exhausted the duration of the open label extension.

Speaker Change: After asking patients to take the inherent risk of joining our clinical trials, we felt it was unfair to those patients to not continue to offer them the option to continue, at least until we knew the results of our Phase III programs.

Richard Barry: After being on the drug, in some cases for four years, some of these phase 2 patients were losing access to it. In our phase 3 program, patients sent the opportunity to go on synophon for 12 months after completing the trial. It is important for our patients to have continued access to our drug. Just imagine being the patient or the loved one of a patient who was on the drug and had perceived that the patient had received the benefit from the drug, but who exhausted the duration of the open-label extension.

Rick Barry: and the FBA had the opportunity to review our results.

Rick Barry: Honestly, the decision to expand our open-label trials was not a hard one. It was driven by our clinical team, who carefully listened to the investigators at our clinical sites.

Rick Barry: Cassava needs to prepare for success, and even though it will add significant cost over the next two to three years, it is absolutely the best thing we can do for our patients.

Richard Barry: After asking patients to take the inherent risk of joining our clinical trials, we thought it was unfair to those patients to not continue to offer them the option to continue, at least until we knew the results of our phase 3 programs, and the FDA had the opportunity to review our results. Honestly, the decision to expand our open-label trials was not a hard one. It was driven by our clinical team who carefully listened to the investigators at our clinical sites.

Rick Barry: It bears repeating that 89% of the patients in our trials have elected to continue on the open label extensions.

Rick Barry: You may have also noticed that we added further cognition and plasma biomarker monitoring every six months for patients who choose to continue on our open label extension trial.

Rick Barry: We're doing that because the data we generate could have real value in helping us understand the potential long-term impact of Simophil.

Richard Barry: Cassava needs to prepare for success, and even though it will add significant cost over the next two to three years, it is absolutely the best thing we could do for our patients. It bears repeating that 89 percent of the patients in our trials have elected to continue on the open-label extensions. You may have also noticed that we added further cognition and plasma biomarker monitoring every six months for patients who choose to continue on our open-label extension trial.

Rick Barry: Our Phase III program has been very well executed and on track. Dr. Koupek will tell you more about that shortly.

Dr. Koupek: Now we must plan for success.

Speaker Change: Continuing our Open Label Extension Trials was one way for planning for success. But in the coming months, you will see others.

Speaker Change: You will notice an uptick in our R&D spending during the second half of the year. Some of that increased spending will be devoted to preparation for the commercial launch of our drug. We are currently ramping up our active pharmaceutical ingredient purchases.

Richard Barry: We're doing that because the data we generate could have real value and helping us understand the potential long-term impact of Simifilm. Our phase 3 program has been very well executed and on track. Dr. Kufeck will tell you more about that shortly. Now we must plan for success. Continuing our open-label extension trials was one way for planning for success, but in the coming months, you will see others. You will notice an uptick in our R&D spending during the second half of the year.

Rick Barry: securing increased outsourced manufacturing capacity, and exploring distribution capabilities.

Rick Barry: We have to plan for Cassava's successful transition from a development stage company to a commercial enterprise.

Rick Barry: What we cannot accept is for us to fail the drug.

Rick Barry: There is an overwhelming need for Alzheimer's patients to have a drug that has the profile that Cimefilum has displayed so far in its development. We cannot let patients and their loved ones down.

Richard Barry: Some of that increased spending will be devoted to preparation for the commercial launch of our drug. We are currently ramping up our active pharmaceutical ingredient purchases, securing increased outsourced manufacturing capacity, and exploring distribution capabilities. We have to plan for Cassava's successful transition from a development stage company to a commercial enterprise. What we cannot accept is for us to sail the drug. There is an overwhelming need for Alzheimer's patients to have a drug that has the profile that Simothillum has displayed so far in its development.

Speaker Change: In today's press release, we discussed the $40 million dollar reserve we are taking for potential settlement with the Securities and Exchange Commission.

Speaker Change: This statement does not mean that we have an agreement in principle with the SEC yet, but it does mean that we now have enough information to understand what our exposure could be if we do come to a resolution with the SEC that will end their investigation of the company.

Rick Barry: I should add that we are continuing to have constructive conversations with both the SEC and the Department of Justice.

Richard Barry: We cannot let patients and their loved ones down. In today's press release, we discussed the $40 million reserve we are taking for potential settlement with the Securities and Exchange Commission. This statement does not mean that we have an agreement in principle with the SEC yet, but it does mean that we now have enough information to understand what our exposure could be if we do come to a resolution with the SEC that will end their investigation of the company.

Rick Barry: There really isn't more we can say about this now, but we hope to be able to do so before long.

Rick Barry: We are not taking a charge of this magnitude lightly. Forty million dollars is an awful lot of money for anyone, let alone a company of our size.

Rick Barry: But, it is our goal to put our past behind us and focus entirely on our mission, developing a best-in-class treatment for Alzheimer's patients.

Richard Barry: I should add that we are continuing to have constructive conversations with both the SEC and the Department of Justice. There really isn't more we can say about this now, but we hope to be able to do so before long. We are not taking a charge of this magnitude lightly. $40 million is an awful lot of money for anyone, let alone a company of our size. But it is our goal to put our paths behind us and focus entirely on our mission, developing a best-in-class treatment for Alzheimer's patients.

Rick Barry: [inaudible]

Speaker Change: Many of you have likely read the letter I wrote to the Cassava community after becoming executive chair on July the 17th.

Speaker Change: In that letter, I told the story of my original connection to Alzheimer's disease, the father of a good friend named Buddy, whose life was cut short by the disease.

Rick Barry: Since I wrote that letter, I've come to understand that nearly everyone has a buddy story. And here at Cassava, each of our people have many buddy stories.

Rick Barry: Before July 17th, I thought Cassava had a good management team in place, but now I appreciate how great the team really is.

Richard Barry: Many of you have likely read the letter I wrote to the Cassava community after becoming executive chair on July the 17th. In that letter, I told the story of my original connection to Alzheimer's disease, the father of a good friend named Buddy, whose life was cut short by the disease. Since I wrote that letter, I've come to understand that nearly everyone has a Buddy story. And here at Cassava, each of our people have many Buddy stories.

Speaker Change: What I see is a group of determined and dedicated people who come to work each day because they are committed to making a difference in the lives of patients and their families and that is what motivates us.

Speaker Change: [inaudible]

Speaker Change: As you might imagine, I had a lot to think about before taking on this challenge. Cassava Sciences has been through an awful lot the last few years. And frankly, some of our wounds may have been self-inflicted, while some clearly have not.

Richard Barry: Before July 17th, I thought Cassava had a good management team in place, but now I appreciate how great the team really is. What I see is a group of determined and dedicated people who come to work each day because they are committed to making a difference in the lives of patients and their families, and that is what motivates us. As you might imagine, I had a lot to think about before taking on this challenge.

Speaker Change: Most of you are probably familiar with the expression that what doesn't kill you makes you stronger.

Speaker Change: Our company has been the subject of intense scrutiny for the past three years.

Speaker Change: Today we are a stronger company because of it. We are thinking ahead to what we could create and not dwelling on the various challenges we have faced in the past.

Speaker Change: For me, the opportunity to work alongside people who are so focused on bringing what could be a game-changing therapy to patients who are in dire need of one was too great for me to ignore.

Richard Barry: Cassava sciences has been through an awful lot the last few years. And frankly, some of our wounds may have been self-inflicted, while some clearly have not. Most of you are probably familiar with the expression that what doesn't kill you makes you stronger. Our company has been the subject of intense scrutiny for the past three years. Today we are a stronger company because of it. We are thinking ahead to what we could create and not dwelling on the various challenges we have faced in the past.

Dr. Koupek: For more than three decades, Dr. Koupek has been intimately involved in drug development for companies like Pfizer, Sanofi, and CibaGygi.

Dr. Koupek: Before joining Cassava in 2021, Jim served as Vice President, Global Clinical Leader for Parkinson's Disease, and Clinical Head of the Neuroscience Research Unit at Pfizer.

Richard Barry: For me, the opportunity to work alongside people who are so focused on bringing what could be a game-changing therapeutic patience who are in dire need of one was too great for me to ignore. For more than three decades, Dr Kupiec has been intimately involved in drug development for companies like Pfizer, Sanfee, and Cibagagi. Before joining Cassava in 2021, Jim served as vice president, global clinical leader for Parkinson's disease and clinical head of the Neuroscience Research Unit at Pfizer.

Speaker Change: I should add that Dr. Kupiec is one of the key reasons why I joined the Board of Cassava in 2021.

Speaker Change: Kim also serves the Independent Review Committee, the IRC, at Target ALS, also known as Lou Gehrig's disease, another neurodegenerative disorder, and he serves at Pro Bono.

Speaker Change: The truth is that Jim's experience in running trials like this is so deep he's probably forgotten more about running a phase 3 trial than most people will have ever learned.

Speaker Change: I've asked Dr. Kupec to walk you through our phase 3 program so you understand how well controlled and rigorous this program is.

Richard Barry: I should add that Dr Kupiec is one of the key reasons why I joined the board of Cassava in 2021. Jim also serves the Independent Review Committee, the IRC, at Target ALS, also known as Lugaric's disease, another neurogeogenerative disorder, and he serves as pro bono. The truth is that Jim's experience in running trials like this is so deep. He's probably forgotten more of our running a phase three trial than most people will have ever learned.

Speaker Change: Yeah, hey, thanks Rick for the introduction and good morning everyone. This is Jim Kupiec, Chief Medical Officer of Cassava Sciences.

Jim Kupiec: As Rick stated, I've been actively involved in drug development efforts at various companies for over 30 years and I've had a particular focus on investigational drugs for the treatment of neurologic diseases since the late 1990s.

Speaker Change: I've worked on teams that have successfully developed drugs and brought them to the pharmacy shelves. However, developing new medicines for neurodegenerative disorders, such as Alzheimer's disease, Parkinson's disease, or ALS, has more often than not been associated with failure.

James Kupiec: I've asked Dr Kupiec to walk you through our phase three program, so you understand how well controls and rigorous this program is. Jim? Yeah, hey, thanks Rick for the introduction.

James Kupiec: Good morning everyone. This is Jim Kupiec, Chief Medical Officer at Cassava Sciences. As Rick stated, I've been actively involved in drug development efforts at various companies for over 30 years. And I've had a particular focus on investigational drugs with treatment of neurologic diseases since the late 1990s. I've worked on teams that have successfully developed drugs and brought them to the pharmacy shelves, and however, developing new medicines for neurodegenerative disorders such as Paul's Heimer's disease, Parkinson's disease or ALS, has more often than not been associated with care.

Speaker Change: The clinical outcomes or endpoints that we assess in randomized clinical studies are associated with large variants and phase 2 studies and AD studies had to be quite large to hopefully show enough of a treatment signal to then justify a very large phase 3 financial investment.

Speaker Change: When I led these Phase II and Phase III programs in the past, we frequently did not know, until the end of a large Phase III study, that the drug had failed. And this was always sad for both patients and everyone involved in the research efforts.

Speaker Change: Drug development for neurologic diseases began to change dramatically around 2018 with the advent of ultra-sensitive fluid-based biomarkers.

James Kupiec: The clinical outcomes or in points that we assess and randomize clinical studies are associated with large variants and phase two studies and 80 studies have to be quite large to hopefully show enough of a treatment signal to then justify a very large phase three financial investment. When I led these phase two and phase three programs in the past, we quickly did not know until the end of a large phase three study that the drug had failed.

Speaker Change: a technologic advancement that many have characterized as the biomarker revolution for brain diseases.

Speaker Change: Biomarkers allow us to examine the machinery inside the brain cells of patients with Alzheimer's disease.

Speaker Change: Why is this important? All of us in the research community understand that drug induced changes in the most basic cellular functions must occur first if one expects to also see cognitive benefit later on.

James Kupiec: And this was always sad for both patients and everyone involved in research efforts. Drug development for neurologic diseases began to change dramatically around 2018 with the advent of ultra-sensitive fluid-based biomarkers. A technological advancement that many have characterized is the biomarker revolution for brain diseases. Biomarkers allow us to examine the machinery inside the brain cells and patients with Alzheimer's disease. Why is this important? All of us in the research community understand that drug-duced changes in the most basic cellular functions must occur first if one expects to also see targeted benefit later on.

Speaker Change: In January 2021, I accepted an offer from Cassava to design and execute the Cinefilm Phase III program in patients with mild to moderate Alzheimer's disease.

Speaker Change: I was very excited, and I consider this a great opportunity to leverage both my many years of Alzheimer's disease trial experience and the availability of these new biomarkers to design a true, state-of-the-art Phase III program.

Speaker Change: that my colleagues in the research community would view as a new gold standard.

Speaker Change: Soon after my arrival, we had a successful end of Phase 2 meeting with the FDA, in which they agreed that we had enough evidence to justify transitioning to Phase 3.

James Kupiec: In January 2021, I accepted an offer from Cassava to design and execute the Cinethone Phase III Program in patients with mild to moderate Alzheimer's disease. I was very excited and I consider this a great opportunity to leverage both my many years of Alzheimer's disease trial experience and the availability of these new biomarkers to design a true state-of-the-art Phase III Program that my colleagues in the research community would do as a new gold standard.

Speaker Change: I designed two Phase III studies and had them reviewed by key colleagues and leaders in the field to ensure they were both scientifically rigorous and operationally feasible.

Speaker Change: Then the FDA approves each protocol via a regulatory procedure called the Special Protocol Assessment or SPA.

Speaker Change: I took advantage of the biomarker revolution.

Speaker Change: A very unique design element to these studies was to require a plasma-based phosphorylated tau biomarker level to confirm abnormal neuropathology, instead of a PET scan.

James Kupiec: So after my arrival, we had a successful interface to meeting with the FDA, which they agreed that we had enough evidence to justify transitioning to Phase III. I designed two Phase III studies and had them reviewed by key colleagues and leaders in the field to ensure they were both scientifically rigorous and operationally feasible. Then the FDA proved each protocol via a regulatory procedure called the Special Protocol Assessment for SPA. I took advantage of the biomarker revolution.

Speaker Change: And PET scans are expensive and they can have a significant negative impact on rapid study recruitment.

Speaker Change: We were in the lead with this strategy, and other sponsors have subsequently started to do the same thing.

Speaker Change: In 2021, we selected Premier Research as the CRO to help operationalize the two studies.

Speaker Change: I've worked with many CROs during my career, and I have to tell you that Premier has been outstanding and they have worked as hard and diligently on these studies as my own team.

James Kupiec: A very unique design element to these studies was to require a plasma-based, phosphorylated towel biomarker level to confirm abnormal neuro pathology. Instead of a PET scan, PET scans are expensive and they can have a significant negative impact on rapid study recruitment. We were in the lead with this strategy and other sponsors have subsequently started to do the same thing. In 2021, we selected premier research as a COO to help operationalize two studies.

Speaker Change: Countless hours were spent selecting and vetting high-quality investigators to conduct these studies here in the U.S. and also in Canada, Puerto Rico, Australia, and South Korea.

Speaker Change: We selected Clario, a company with two decades of experience assessing PET and MRI scans in patients with Alzheimer's disease.

Speaker Change: and they would evaluate the thousands of images we would collect in this program.

James Kupiec: I worked with many heroes during my career and I had to tell you that premier has been outstanding and they have worked as hard and diligently on these studies as my own team. Countless hours were spent selecting and vetting high-quality investigators to conduct these studies. Here in the US and also in Canada, Puerto Rico, Australia, and South Korea. We selected Clario, a company with two decades of experience assessing PET and MRI scans in patients with Alzheimer's disease and they would evaluate the thousands of images we would collect in this program.

Speaker Change: We selected Cygnet Health, a stellar leader in the field of radar training, radar assessments, to ensure each cognitive and functional assessment at the clinical sites was conducted against a gold standard.

Speaker Change: Similar high-performance companies were selected to collect and analyze safety lab values, ECGs, and even patient compliance with study book.

Speaker Change: Now, with everything in place, including IRB approvals, we began to screen and recruit patients in late 2021.

Speaker Change: We have about 170 committed research sites worldwide, and in less than two years we have recruited over 1,900 patients in both studies. Over 555 patients have completed their participation in the 52-week RETHINK study.

James Kupiec: We selected Signet Health, a stellar leader in the field of radar training, radar assessments, to ensure each cognitive and functional assessment at the clinical sites was conducted against a gold standard. Similar high performance companies were selected to collect and analyzed safety lab values, ECGs, and even patient compliance with study blood. Now with everything in place, including IRB approvals, we began to screen and recruit patients in late 2021. We had about 170 committed research sites worldwide and in less than two years we have recruited over 1,900 patients in both studies.

Speaker Change: And over 420 patients have completed their participation in the 76-week refocus study for a total of 975 completers.

Speaker Change: It's important to note that there is no overlap of clinical research sites between the two studies.

Speaker Change: The studies have a separate, completely different...

Speaker Change: set of investigators supporting the research.

Speaker Change: As just mentioned, the RETHINK study is 52 weeks in length, and it evaluates the potential cognitive and functional benefits of methillum in patients with mild to moderate Alzheimer's disease.

James Kupiec: Over 555 patients have completed their participation in the 52-week rethink study and over 420 patients have completed their participation. In the 76-week we focused study for a total of 975 computers. It's important to note that there is no overlap of clinical research sites between the two studies. The studies have a separate, completely different.., and a set of investigators supporting research. Just mentioned, the rethink study is 52 weeks in length, and it evaluates the potential cognitive and functional benefits in the film in patients with mild to moderate Alzheimer's disease.

Speaker Change: Half of the 800-plus patients were randomized to semiphilin, and half were randomized to placebo. Approximately 70% of the randomized patients have mild dementia, and approximately 30% of the randomized patients have moderate dementia.

Speaker Change: A substantial number of patients in the RETHINK study have also agreed to have their plasma analyzed for key Alzheimer's disease biomarkers. These blood samples will be analyzed by a completely independent, CLIA-certified, accredited laboratory.

Speaker Change: Cassava, Premier, and our other collaborators have worked very closely to ensure the integrity of this program.

James Kupiec: Half of the 800-plus patients were randomized to Senatilum and half were randomized placebo. Approximately 70% of the randomized patients have mild dementia and approximately 30% of the randomized patients have moderate dementia. A substantial number of patients in the rethink study have also agreed to have their plasma analyzed for key Alzheimer's disease biomarkers. These blood samples will be analyzed by completely independent, clear-certified, accredited laboratory. Cassava, premier, and our other collaborators have worked very closely to ensure the integrity of this entire study.

Speaker Change: entire study.

Speaker Change: I wanted this program to be the best I had ever created or worked on.

Speaker Change: We review data from research sites, monitor any errors that occur, we work closely with the IRBs to ensure the sites are properly conducting their efforts in a way that's consistent with good clinical practice.

Speaker Change: We conduct routine audits, we review and assess all safety reports, and we document everything.

Speaker Change: We call this doing it by the book.

Speaker Change: We know that the FDA and other regulatory authorities expect this of us, and they themselves conduct audits of Cassava, our CRO, our other collaborators, and many of our research sites.

James Kupiec: I'm one of this program to be the best I had ever created or worked on. We reviewed data from research sites, mantra, any errors that occur. We were closely with the IRBs to ensure the sites are properly conducting their efforts in a way that is consistent with good clinical practice. We conduct routine audits, we review and assess all safety reports, and we document everything. We call this doing it by the book.

Speaker Change: I need to highlight that the patients, their physician investigators, all of us at Cassava, and the Premier remain completely blinded to what treatment each patient is taking.

Speaker Change: Once the last patient has passed his or her last visit in the fall,

Speaker Change: We will work quickly and thoroughly to ensure that all minor inconsistencies or questions in the database are addressed.

James Kupiec: We know that the FDA and other regulatory authorities expect this of us, and they themselves conduct audits of Cassava, our CRO, our other collaborators, and many of our research sites. I need to highlight that the patients, their physician investigators, all of us at Cassava, and the premier remain completely blinded to what treatment each patient is taking. Once the last patient has passed his or her last visit in the fall, we will work quickly and thoroughly to ensure that all minor inconsistencies or questions in the database are addressed.

Speaker Change: We will confirm the accuracy of each and every piece of data.

Speaker Change: This includes, for example, all clinical data, cognitive assessment data, lab and ECG data, imaging data.

Speaker Change: Once we are satisfied.

Speaker Change: The database will be blocked, and at that point we cannot make any changes to its content.

Speaker Change: David Locke has always been a significant and dramatic milestone for me.

Speaker Change: on any of the programs that I've led.

Speaker Change: Premier Research will make this happen, at which point the blocked and blinded database, including blinded biomarker results,

Speaker Change: will be shared with the biostatisticians at the Pintera Corporation.

James Kupiec: We will confirm the accuracy of each and every piece of data. This includes, for example, all clinical data, cognitive assessment data, lab and ECG data, imaging data. Once we are satisfied, the database will be locked, and at that point we cannot make any changes to his content. Data lock has always been a significant and dramatic milestone for me on any of the programs that I've learned. Premier research will make this happen at which point the locked and blinded database, including blinded biomarker results, will be shared with the biostatisticians at the Pintera Corporation, along with the treatment codes.

Speaker Change: along with the treatment codes. This will allow them to break the blind and determine whether Cinefilm is effective.

Speaker Change: Everyone at CASAVA and PREMIER continues to remain blinded during this analytical period by PENTERA. PENTERA is the PREMIER independent biostatistician group, biostatistics group I should say, working on AD studies in my opinion.

Speaker Change: and that of many others. Once Dr. Suzanne Hendricks and her team members at Pentara conclude they have properly analyzed all the data, they will call us to set up a meeting to go over all their analyses, positive or negative.

James Kupiec: This will allow them to break the blind and determine whether it's in its own as effective. Everyone at Cassava and Premier continues to be married blinded during this analytical period by Pintera. Pintera is the premier independent biostatistician group by statistics group, I should say. Working on AD studies in my opinion, in doubt of many others, once Dr. Suzanne Hendrix and her team members at Pintera conclude they have properly analyzed all the data, they will call us to set up a meeting to go over all their analyses, positive or negative.

Speaker Change: We will then prepare a public disclosure and we're committed to doing this by the end of the year.

Speaker Change: Moving ahead, the second phase 3 study is the RIF-FOCUS study, and that has recruited over 1,100 patients.

Speaker Change: This study and the RETHINK study are very similar in that patient selection is the same. However, the REFOCUS study is 76 weeks in length, and there are three different treatments to which a patient can be randomized. Two doses of simophenone and placebo.

Speaker Change: As the study is six months longer in duration, we expect top-line results to report out mid-year 2025.

James Kupiec: We will then prepare a public disclosure, and we're committed to doing this by the end of the year. Moving ahead, the second phase free study is the ReFocus study, and that has recruited over 1,100 patients. This study and the ReFocus study are very similar in that patient selection is the same. However, the ReFocus study is 76 weeks in length and there are three different treatments to which a patient can be randomized.

Speaker Change: The refocus study is also different in that many patients.

Speaker Change: have the option of participating in a number of sub-studies which evaluate the impact of semifilm on CSF fluid biomarkers, plasma biomarkers, amyloid PET imaging, tau PET imaging, and brain volume changes as determined by MRI.

Speaker Change: The goal of these self-studies is to demonstrate that semaphilin has the potential to modify the underlying disease process of Alzheimer's disease.

James Kupiec: Two doses are synopelom and placebo. As the study is six months longer in duration, we expect top-line results to report out mid-year 2025. The ReFocus study is also different in that many patients have the option of participating in a number of substudies, which evaluate the impact of synopelom on CSF fluid biomarkers, plasma biomarkers, amaway pet imaging, tau pet imaging, and brain-biting changes is determined by MRI. The goal of these substudies is to demonstrate that synopelom has the potential to modify the underlying disease process of Alzheimer's disease.

Speaker Change: Patients in both phase 3 studies have the option then of rolling over into the open label extension study. As Rick shared, some 89% of patients have elected to do just that.

Speaker Change: As Chief Medical Officer for Cassava, I'm ultimately responsible for the safety of these patients and I spend a lot of time reviewing all types of safety, lab, and ECG reports along with the medical monitor at Premier.

Speaker Change: When a patient reports a new medical condition or symptom, this is called an adverse event for the purpose of regulatory filings.

Speaker Change: I am pleased to report that no serious adverse event has yet been linked to study drugs in any of our Phase II or Phase III studies.

James Kupiec: Patients in both phase free studies have the option then of rolling over into the Open Label Extension study, and as Rick shared, some 89% of patients have elected to do just that. As chief medical officer for Cassava, I'm ultimately responsible for the safety of these patients and I spend a lot of time reviewing all types of safety lab and ECG reports along with the medical monitor at premier. When a patient records a new medical condition or symptom, this is called an adverse event for the purpose of regulatory filings.

Speaker Change: A huge amount of safety data has now been shared on two separate occasions with the Data Safety Monitoring Board, or DSMB, who have instructed us to continue the studies without change.

Speaker Change: This board is composed of very experienced, independent, clinical scientists and a statistician.

Speaker Change: And they are charged with reviewing all safety data, even if they feel obligated to look at any unblinded safety data behind closed doors, as per their charter and a strict set of rules that enable such an assessment.

James Kupiec: I am pleased to report that no serious adverse event has yet been linked to study drug in any of our phase 2 or phase 3 studies. A huge amount of safety data has now been shared on two separate occasions with the Data Safety Monitoring Board or DSMB who have instructed us to continue the studies without change. This board is composed of very experienced, independent clinical scientists and statistician, and they are charged with reviewing all safety data, even if they feel obligated to look at any unblinded safety data behind closed doors as per their charter and the strict set of rules that enable such an assessment.

Speaker Change: They are tasked to advise CASAVA on how best to ensure the safety of our study participants.

Speaker Change: and if any changes in the conduct of the study are required.

Speaker Change: This is yet an extra step we've taken to ensure patient safety.

Speaker Change: The DSMB has already met twice and we will meet again for the third time next month.

Speaker Change: Rick, that's my update for Phase 3 that I wanted to share, but if I may, I'd like to share a final personal note.

Speaker Change: I was excited when I joined Cassava, but I'm even more excited and optimistic now about Simophilum and its chance of success in Phase III. Simophilum continues to be safe and well tolerated in a very large number of patients.

James Kupiec: They are tasked to advise Cassava on how best to ensure the safety of our study participants and if any changes in the conduct of the study are required. This is yet an extra step we've taken to ensure patient safety. The DSMB has already met twice and we will meet again for the third time next month.

Speaker Change: Plus the data from the 24-month open-label phase 2 safety study was remarkable in that patients with mild dementia apparently had no significant decline during that two-year treatment period.

Speaker Change: If this is true and replicated in Phase 3, it would represent an exceptional achievement and a significant advance in the field.

James Kupiec: With that's my update for phase 3 that I wanted to share but if I may, I'd like to share a final personal note. I was excited when I joined Cassava but I'm even more excited and optimistic now about semaphilum and its chances of success in phase 3. Semaphilum continues to be safe and well tolerated in a very large number of patients. Plus the data from the 24-month open label phase 2 safety study was remarkable in that patients with mild dementia apparently had no significant decline during that two-year treatment period.

Speaker Change: So thanks for everybody on the line for your attention. I look forward to sharing our results with you at the end of the year. Rick, back to you.

Eric Schon: Thanks so much for that, Jim. I'm now going to ask Eric Schon, Chief Financial Officer, to discuss our second quarter results and our financial projections for the remainder of 24.

Eric Schon: Thanks Rick. On the cash front, we ended the June quarter with $207.3 million in cash.

James Kupiec: If this is true and replicated in phase 3, it would represent an exceptional achievement in its significant events So, thanks for everybody in the line for your attention. I look forward to sharing our results with you at the end of the year. Let's get back to you. Thanks so much for that, Jim.

Eric Schon: That balance is expected to be sufficient for operations through the conclusion of both ongoing Phase III trials.

Speaker Change: and into calendar 2026, even after considering the potential $40 million loss contingency recorded in Q2 to resolve the SEC investigation that was discussed by Rick.

Eric Schoen: I'm now going to ask Eric Schoen, Chief Financial Officer, to discuss our second quarter results and our financial projections for the remainder of 24. Thanks, Rick. On the cash front, we ended the June quarter with 207.3 million in cash. That balance is expected to be sufficient for operations through the conclusion of both ongoing phase three trials and into calendar 2026, even after considering the potential $40 million loss contingency recorded in Q2 to resolve the SEC investigation that was discussed by Rick.

Speaker Change: Rick also covered the successful completion of our warrant distribution during the second quarter.

Speaker Change: During the duration of the program, a total of approximately 3.8 million warrants were exercised.

Speaker Change: As a result, the company sold 5.7 million common shares at $22 per share for gross proceeds totaling $126.3 million.

Speaker Change: After offering costs, net proceeds to the company were $123.6 million.

Speaker Change: There are currently no remaining warrants outstanding.

Eric Schoen: Rick also covered the successful completion of our warrant distribution during the second quarter. During the duration of the program, a total of approximately 3.8 million warrants were exercised. As a result, the company sold 5.7 million common shares at $22 per share for gross proceeds totaling $126.3 million. After offering costs, net proceeds to the company were $123.6 million. There are currently no remaining warrants outstanding. The warrant program was a really good boost for the balance sheet.

Speaker Change: The WARP program was a really good boost for the balance sheet.

Speaker Change: We were pleased to offer our shareholders a dividend, which gave them the choice to sell their warrants and receive cash, or to exercise their warrants and increase their equity stake in the company.

Speaker Change: On the cash spend side, net cash used in operations during the six months ended June 30, 2024 was $37.4 million.

Speaker Change: This was in line with our previous guidance.

Speaker Change: [inaudible]

Speaker Change: Net cash use in operations for the second half of 2024 is expected to be between $80 and $90 million, including an estimated $40 million loss contingency related to fully resolving the SEC investigation.

Eric Schoen: We were pleased to offer our shareholders a dividend which gave them the choice to sell their warrants and receive cash or to exercise their warrants and increase their equity stake in the company. On the cash spend side, net cash used in operations during the six months and the June 30th, 2024 was $37.4 million. This was in line with our previous guidance. Net cash use in operations for the second half of 2024 is expected to be between 80 and 90 million, including an estimated 40 million loss contingency related to fully resolving the SEC investigation.

Speaker Change: Considering the spending level, we believe we will end the year with between $117 to $127 million in cash.

Speaker Change: Net income was $6.2 million in Q2 compared to a net loss of $26.4 million for the same period in 2023.

Speaker Change: Net income resulted from a change in fair value of warrant liabilities, a non-cash item.

Speaker Change: This warrant gain was partially offset by the estimated SEC loss contingency settlement and cost to conduct the Phase III clinical program as well as other studies with Simophil-M.

Eric Schoen: Considering the spending level, we believe we will end the year with between 117 to 127 million in cash. Net income was $6.2 million in Q2 compared to a net loss of $26.4 million for the same period in 2023. Net income resulted from a change in fair value of warrant liabilities, a non-cash item. This warrant gained was partially offset by the estimated SEC loss contingency settlement and cost to conduct the Phase III clinical program as well as other studies with Symmahville M. Research in development expenses for Q2 were $15.2 million. This compared to $25 million for the same period in 2023. R&D expenses decreased due primarily to the completion of patient screening and enrollment for our Phase III clinical program in the fall of 2023.

Speaker Change: Research and development expenses for Q2 were $15.2 million. This compared to $25 million for the same period in 2023.

Speaker Change: R&D expenses decreased due primarily to the completion of patient screening and enrollment for our Phase III clinical program in the fall of 2023.

Speaker Change: Now I'll turn it back to Rick.

Rick Barry: Thank you, Eric.

Rick Barry: Okay. Operator, could you please open the line for questions?

Speaker Change: At this time, we will be conducting a question and answer session. For those of you on telephone lines, to ask a question, you may press star, then 1, on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: To withdraw a question, please press start and 2. At this time, we will pause momentarily to assemble a roster.

Richard Barry: Now I'll turn it back to Rick. Thank you, Eric. Okay.

Operator: Operator, could you please open the line for questions? At this time, we will be conducting a question-and-answer session. For those of you on telephone lines, to ask a question you may press star, then one, on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw a question, please press star in two.

Speaker Change: The first question is from Roy Soumit at Jones Research. Please go ahead.

Speaker Change: Good morning, everyone, and thank you for providing all the details, Rick.

Aroy Whomit: Three questions. One is...

Operator: At this time, we will pause momentarily to assemble a roster.

Aroy Whomit: On the discontinuation, the dropout rate of about 20 to 22 percent, could you describe us what was the key driver for that?

Speaker Change: dose reduction discontinuation due to AE or any controversy related to the drug any details would be great. And the second is

Soumit Roy: The first question is from a Roy Soumit Jones research. Please go ahead. Good for providing all the details.

Speaker Change: The ADAS-CoC-12, I suppose, was designed more with in mind mild to moderate patients versus ADAS-CoC-14. Now that we know a good chance that mild patients would show the benefit.

Soumit Roy: One, three questions. One is on the discontinuation drop-out rate of about 22 percent. Could you describe us, what was the key driver for that? Was it dose reduction, discontinuation due to AE or any controversy related to the drug?

Speaker Change: Is ADAS COGS 12 still the appropriate end point and if FDA gave any guidance, if only one of the co-primary hits, what would be the regulatory path forward?

Speaker Change: Okay, I think I've got it. Thanks, Soumit. Probably I'm going to ask Jim, I think, to answer your questions. He's probably better prepared for it. Jim?

Soumit Roy: Any reports were designed more within my moderate patients versus ADAS COG-14. Now that we know a good chance that mild patients would show the benefit is ADAS COG-12 still the appropriate endpoint.

Jim Kupiec: Yeah, let me see. I have the ADAS COG question. The first question was about the dropout rate. Dropout rate that we've seen in both of the two studies is about 20% slightly more than 20% in the longer study.

Jim Kupiec: As is common in these studies, the most typical reason for a dropout is because of what I call

Soumit Roy: And if FDA gave any guidance, if only one of the co-primary hits, so what would be the regulatory path forward? Okay, I think I've got it. Thanks, Soumit.

Speaker Change: study fatigue, patient fatigue. They withdraw consent. Patients are moving some place. Study this.

Speaker Change: It's not just a patient-involved study, but also a partner, a study partner, and they oftentimes are just...

James Kupiec: Probably, I'm going to ask Jim, I think to answer your question, he's probably better prepared for it. Jim? Yeah, let me see. I have the ADAS COG question. The first question was about the drop-out rate. It's kind of about rate that we've seen in both the two studies. It's about 20 percent slightly more than 20 percent in the longer study. As is common in these studies, the most typical reason for a drop-out is because what I call study fatigue, patient fatigue, they withdraw, consent, patients are moving someplace, study, it's not just a patient evolving study, but also a partner, a study partner, and they oftentimes are just weary from coming back and forth, back and forth to the research center.

Speaker Change: weary from

Speaker Change: coming back and forth, back and forth to the research center. So, if you look at, let's say, other studies that have recently been reported and approved at FDA, such as Atacatamab or Leucatamab or Denatamab, again, the most

Speaker Change: Common reason for dropouts is not adverse events, but withdrawal of consent.

Speaker Change: With regards to ADAS COG 12, that's a good question. If we were going to an earlier population, like a mild cognitive impairment, we might...

Speaker Change: use 8S-COG-13 or 14, but for mild to moderate population 8S-COG-12 is more than adequate. The agency agrees as part of our earlier discussion a few years ago.

James Kupiec: So if you look at, let's say, other studies that have recently been reported and approved FDA, such as out of catamab or the catamab or the catamab, again, the most common reason for drop-outs is not adverse events, but withdrawal of consent.

Speaker Change: And I think there was a third question. Can you please repeat that? If you had any discussion with the FDA, if you hit only one of the co-primary endpoints, not both COP-12 and ADL. No, no, we've not had such a discussion at this point. Thank you.

James Kupiec: With regards to ADAS COG-12, that's a good question. If we were going to an earlier population, like a mild cognitive impairment, we might use the ADAS COG-13 report key, but for a mild to moderate population, ADAS COG-12 is more than adequate. The agency agrees as part of our earlier discussion a few years ago, and I think there was a third question.

Speaker Change: Thank you for taking the questions.

Speaker Change: Thank you, sir

Speaker Change: The next question is from Vernon Bernardino H.C. Wainwright. Please go ahead.

Vernon Bernardino: Hi, good morning and thanks for taking my questions. Rick and Jim, I also want to, you know, welcome you to Cassava. Look forward to...

Soumit Roy: Can you please repeat that? If you had any discussion with the FDA, if you hit only one of the corporate questions.

Vernon Bernardino: your activities in helping grow the company. I have a couple of questions. Rick, I know you can't go into the details as far as the SEC investigation.

Speaker Change: But I do want to press a little bit in the sense that could you remind us again what the SHC is investigating and what are the drivers of the $40 million amount for the estimated loss contingency that you're recording?

Vernon Bernardino: Hi, good morning and thanks for taking my question. Rick and Jim, I also want to welcome you to Cassava. Look forward to your activities and helping grow the company.

Rick Barry: Well, I think you know the investigation began in 2021 after the citizens petition was filed. And there were all kinds of allegations raised in that petition.

Richard Barry: Have a couple of questions. Rick, I know you can't go into the details as far as the SEC investigation, but I do want to press a little bit in the sense that could you remind us again what the SEC's investigating and what are the drivers of the $40 million amount for the estimated loss contingency that you're recording. Well, I think I think you know the investigation began in 2021 after the citizens petition was filed and there were all kinds of allegations raised in that in that petition.

Speaker Change: The settlement, if we reach one, all I can say is it will end the investigation.

Speaker Change: and

Speaker Change: The Commission seems to be most focused on the fact that the company raised money sometime in the, I can't remember now, if it was the fourth quarter or the beginning of 21.

Speaker Change: And that seems to be really what they're focused on.

Speaker Change: Okay, terrific. The second question I have for you, Jim, Dr. Cookett, it's great that you've added biomarkers to the phase 3 studies. Regarding those biomarkers,

Richard Barry: The settlement, if we reach one, will, all I could say is it will end the investigation. And the commission seems to be most focused on the fact that the company raised money sometime in the, I can't remember now, it was the fourth quarter of the beginning of 21. And that seems to be really what they're focused on.

Speaker Change: Will that be part of, question one would be the top line, part of the top line announcement for Rethink.

Speaker Change: and are some of those biomarkers...

Speaker Change: It's going to be.

Speaker Change: Let's say not necessarily targeted, but perhaps ones that would answer some of the controversy that arose from the Phase 2 results, the early Phase 2 results that led to the indictment and charges against a former advisor.

James Kupiec: Okay, perfect. The second question I have for you. It's great that you've added a biomarkers to the phase three studies regarding those biomarkers. Well, that'd be part of question one would be the top one part of the top line announcement for a rethink. And are some of those biomarkers going to be, let's say, not necessarily targeted, but perhaps one step would answer some of the controversy that arose from the phase two results, the early phase two results that led to the indictment and charges being against a former advisor.

Speaker Change: As you know, there's controversy about those results.

Speaker Change: I don't want to get into the indictment itself, but with these biomarkers.

Speaker Change: It seems like there'd be an opportunity for the phase three results to answer any lingering questions as far as not necessarily duplicating those results, but perhaps confirming the directionality of those biomarkers.

Speaker Change: Rick, do you want to take that question? Sorry, I was going to let you handle it. Okay, thanks Rick.

James Kupiec: As you know, there's controversy about those results. I don't want to get into the indictment itself, but with the biomarkers, it seems like there'd be an opportunity for the phase three results to answer any lingering questions as far as not necessarily duplicating those results. But perhaps confirming the directionality of those biomarkers. Rick, you want to take that question? Sorry, I was going to let you handle it. Okay, thanks Rick. That's a really good set of questions.

Rick Barry: That's a really good set of questions, thank you so much. In our phase three study, we have a number of biomarkers. In plasma in particular, we're hoping,

Speaker Change: I cannot absolutely promise, but we are hoping that our plasma biomarker assessment in patients from Rethink will be available at the end of the year, at the same time we have cognitive data to present publicly.

Speaker Change: That is our hope, and we're working to that end.

Speaker Change: The types of biomarkers we're going to be looking at in phase 3 will look at some of the basic...

Speaker Change: abnormalities of cell function in patients who have Alzheimer's disease, the phosphorylation of tau, the inflammatory changes that have been seen, the degeneration of axons, for example, in patients with Alzheimer's disease.

James Kupiec: Thank you so much. In our phase three study, we have a number of biomarkers. There's in plasma, in particular, we're hoping, you cannot absolutely promise, but we are hoping that our plasma biomarker assessment in patients from rethink will be available in at the end of the year. At the same time, we have cognitive data to present publicly. That is our hope, and we're working to that end, and the types of biomarkers we're going to be looking at in case three we'll look at some of the basic abnormalities of cell function in patients who have Alzheimer's disease, the phosphorylation of Tau, the inflammatory changes that have been seen, the the generation of axons, for example, in patients with Alzheimer's disease.

Speaker Change: This is a type of biomarkers that can be looked at in the plasma very accurately and with great precision.

Speaker Change: and they

Speaker Change: They are the common ones that are being examined by most of the companies who are doing this work.

Speaker Change: type of work.

Speaker Change: There are also biomarkers that we can do in CSF, but that's part of the refocus study and we won't have those until sometime in the second half of next year in all likelihood. But yes, to your question, we're hoping to have some biomarker data available later on this year.

Speaker Change: Remember, these biomarkers, we're collecting them at various time points in a 52-week reTHINK study.

James Kupiec: These types of biomarkers that can be looked at in the plasma, very accurately in a great precision, and they they are the common ones that are being examined by most of the companies who are doing this type of work. They're also biomarkers that we can do in CSS, the best part of the focus study, and that we won't have those until sometime in the second half of next year, you know, likelihood.

Speaker Change: The data that was, that you raised from phase two, much of it from CSF done in the,

Professor Wong: Professor Wong's lab was

Speaker Change: in a 28-day study. And one of the things that we did a number of years ago was have an independent laboratory, Quanterix, and I want to remind you of this. Quanterix did a

James Kupiec: But yes, your question we're hoping to have some biomarker data available later on this year. These, remember, these biomarkers were collecting them at various time points in a 52 week rethink study. The data that was that you raised from phase two, much of it, from CSF done in the Professor Wong's lab, was in a 28 day study. And one of the things that we did a number of years ago was have an independent laboratory, corned terrox, and I want to remind you this, corned terrox did a assessment of a biomarker called PETAL 181, which was invoked in, and then showed in did show a significant significant change.

Speaker Change: assessment of a biomarker called PTAL 181, which was in vogue then.

Professor Wong: and did show a significant, statistically significant change. There's a small number of subjects in each of the treatment groups. This is a double-blind study looking at placebo versus two doses of Gargan. The data was in fact significant.

Professor Wong: And I just want to remind you that we're hoping to not only replicate that type of benefit, but also expand and augment it with a longer study and using perhaps more...

Professor Wong: I'll call it more contemporary blood-based biomarkers that are now available.

Professor Wong: So hopefully that will answer your question.

Speaker Change: No, that's fantastic. And I asked those questions because I don't know if everybody remembers. I'm sure you are very familiar with the data.

James Kupiec: There's a small number of subjects in each of the treatment groups. This is a double blind study, looking at placebo versus two doses of drug and the data was in track and significant. And I just want to remind you that and we're hoping to not only replicate that type of benefit, but also expand and augment it with a longer study and using perhaps more, more contemporary, blood-based biomarkers that are available.

Professor Wong: A lot of the results happened very quickly within those 28 days.

Speaker Change: And that is part of the strength of Stem of Alignment, that you see the effects right away.

Speaker Change: As a follow-up to...

Smith-Royce: Soumit Roy has a question.

Speaker Change: Regarding ADAS Cog 12...

Smith-Royce: Thanks.

Smith-Royce: Bye.

Speaker Change: I was wondering if you could go a little bit into...

James Kupiec: So hopefully that will answer your question. No, that's fantastic. And I ask those questions because I don't know if everybody remembers. I'm sure you are very familiar with the data. A lot of the results happen very quickly within those 28 days and that is part of the strength of the MF lab and that you see the effects right away.

Speaker Change: Perhaps at least characterize your statistical plan and.

Speaker Change: The targeting of what kind of patients.

Speaker Change: You will be announcing at least on the top line level for rethink.

James Kupiec: As a follow-up to Smith-Royza question regarding ADF Cloud 12, I was wondering if you could go a little bit into, you know, obviously it'd be great to get these patients on treatment with some MF lab as early as possible. But with the statistical plan of these facial studies, I was wondering if you could describe a little bit. Not perhaps at least characterize your statistical plan and the targeting of what kind of patients you will be announcing, at least on the top line of level for a rethink and maybe even refocus.

Speaker Change: And maybe even be spoken.

Speaker Change: Mhm.

Speaker Change: So the analysis.

Speaker Change: These types of studies you have to do what's called a modified intent to treat analysis.

Speaker Change: Which means.

Speaker Change: Include everybody in the analysis, who has.

Speaker Change: Taken at least one dose of drug and has had at least one follow up visit in order to determine whether or not.

Speaker Change: Cognition or function has changed.

Speaker Change: For example, if somebody takes the bottle of pills.

Speaker Change: Disappear that loss to follow up they would not be included but otherwise everybody else be they either having mild dementia or moderate dementia will be included in that analysis and that is our primary analysis. That's what the FDA expects there will be certainly sub group analyses that we will do.

James Kupiec: So the analysis. We've had the studies, you have to do what's called a modified intent to treat analysis, which means you include everybody in the analysis who has at least one dose of drug and has had at least one follow-up visit in order to determine whether or not cognition or function has changed. For example, if somebody takes the bottle of pills and then they just disappear, they lost a follow-up, they would not be included.

Speaker Change: They are not the primary analysis, though the secondary analysis will look at patients who have sort of different types of debenture mild dementia and Margaret dementia.

Speaker Change: Patients who have this variable indexed variable is quite a number of sub group analysis.

Speaker Change: I suspect that the time that we are.

Speaker Change: Have the public disclosure later this year, we'll have most of that data and we will provide as much as we can.

James Kupiec: But otherwise, everybody else, be they either having mild dementia or moderate dementia, will be included in that analysis. That is our primary analysis, that is what the FDA expects, there will be certainly subgroup analyses that we will do, they are not the primary analysis though. The secondary analysis will look at patients who have different types of dementia, mild dementia, moderate dementia, patients who have this variable or that variable, is quite a number of subgroup analyses.

Speaker Change: And.

Speaker Change: That's my promise to you.

Speaker Change: Thank you for providing that insight and taking my questions.

Speaker Change: Forward to the data I'll get back in the queue. Thank you.

Brian: Thanks, Brian.

Speaker Change: The next question is from Adam May have Peter.

Speaker Change: Rodman and Renshaw. Please go ahead.

Speaker Change: Yes, good morning, maybe a little bit of a follow up to Dr. <unk>.

Speaker Change: What I'd like to understand is is.

James Kupiec: I suspect at the time that we have the public disclosure later this year, we'll have that in the next few minutes and that's my promise to you. Thank you for providing that insight and taking my questions.

Speaker Change: The statistical analysis plan of the co primary endpoints and data has been locked down and agreed that.

Speaker Change: And if you could provide just some details about.

Speaker Change: Sure.

Speaker Change: How the analysis is going to be performed on the two primary endpoints.

James Kupiec: I look forward to the data, I'll get back in the queue. Thank you.

James Kupiec: Thanks for having me.

Jim Muehlbauer: Jim Muehlbauer.

Speaker Change: Okay.

Vernon Bernardino: The next question is from LMAF Piros, Rodman and Ren Shaw, please go ahead. Yes, good morning, maybe a little bit of follow-up to Dr. Kruppiak. What I'd like to understand is the statistical analysis plan of the co-prime variant points and that has been locked down and agreed that the FDA, and if you could provide just some details about how the analysis is going to be performed on the two primary variant points.

Speaker Change: I guess so.

Speaker Change: So the statistical analytical plan has been written in conjunction with.

Speaker Change: Statisticians at both Premier we will be analyzing the safety data.

Speaker Change: Dr. Hendrick start to Mallinckrodt Terror Corporation.

Speaker Change: We'll be analyzing our dataset for efficacy.

Speaker Change: To your question.

Speaker Change: They will be doing a modeling approach to our patients.

Speaker Change: Which is very typical is a very sophisticated approach as opposed to what we call simple statistics.

Speaker Change: And there'll be doing that analysis.

James Kupiec: In your public, I guess so. So the statistical analytical plan has been written in conjunction with statisticians at both premier, who will be analyzing the safety data and Dr. Hendrick's, Dr. Malin caught a particular corporation, they will be analyzing our data sets for efficacy. They, to your question, they will be doing a modeling approach to our patients, which is very typical, so very sophisticated approach, as opposed to what we call simple statistics.

Speaker Change: We have written yet.

Speaker Change: Statistical analytical plan, we are done with the physical and the medical plan.

Speaker Change: <unk>.

Speaker Change: It is now is sitting at the SBA, we're waiting for their commentary on it assuming that they improve then we will basically mark it down and sign off on it and will be done but clearly.

Speaker Change: The essence of your question as it needs to be completely done.

Speaker Change: So that the analysis pre specified before we even get close to the data lock date.

Speaker Change: Don't know if thats, what youre looking for but hopefully I answered your question.

James Kupiec: And they'll be doing that analysis. We have written the statistical analytical plan. We are done with the statistical analytical plan. Internally, it is now sitting at the FDA, we're waiting for the commentary on it, assuming that they approve, then we will basically lock it down and sign off on it and we'll be done. But clearly, to the essence of your questions, it needs to be completely done so that the analysis is pre-specified before we even get close to the data lock.

Speaker Change: Yes, yes.

Speaker Change: Maybe just one additional follow.

Speaker Change: Follow up to that is that both of these primary endpoints would have to meet that'd be level a P.

Speaker Change: <unk> zero point in time is that correct for it to be successful.

Speaker Change: That is correct that is correct.

Speaker Change: Okay.

Speaker Change: And maybe just.

Speaker Change: Bring in Chris if we could.

Speaker Change: How did the how did you arrive to the figure of a potential settlement of $40 million what is that based on some precedents.

James Kupiec: So I don't know if that's what you're looking for, but I'm going to answer your question. Yes, yes, maybe just one additional follow up to that is that both of these primary and points would have to meet at the level of P less than 0.5. Is that correct for it to be successful? That is correct, that is correct. And maybe just to bring in Chris if he could How did you and arrived to the figure of a potential settlement of $40 million was that based on some precedence?

Speaker Change: How did that come about.

Speaker Change:

Speaker Change: Okay.

Speaker Change: I appreciate the question but.

Speaker Change: We've said everything we can about our ongoing discussions with the SEC and we have reserved $40 million.

Speaker Change: But as we indicated we're still in discussions with the SEC.

Speaker Change: Be appropriate to give a little more detail.

Speaker Change: Okay. Thank you.

Rick Barry: Maybe one last question to Rick.

Speaker Change: You alluded to that there was a demand.

Speaker Change: Could you expand the.

Speaker Change:

Rick Barry: Expanded access program to be on the wrong year, what precipitated that.

James Kupiec: How did that figure come about as an estimate? I appreciate the question, but we've said everything we can about our ongoing discussions with the SEC and we have reserved $40 million, but as we indicated, we're still in discussions with the SEC and it really wouldn't be appropriate to get a little more details.

Rick Barry: More like the nixons demand or patients.

Speaker Change: Family demand that you observed.

Speaker Change: You could provide a little bit of color there.

Speaker Change: I think the honest answer is it was a lot of things. So we heard from the sites that patients are going off and they wanted to stay on the drug.

Speaker Change: We heard that loud and clear through the clinical team.

Chris Cook: Okay, thank you. And maybe one last question to Rick, you alluded to that there was a demand to expand the extended access program to be on the wrong year. What precipitated that was it more like clinicians demand or patients less family demand that you observed. If you could provide a little bit of color there. I think you know, I think the honest answer is there was a lot of things. So we heard from the sites that patients were going off and they wanted to stay on the drug.

Speaker Change: And I got to tell you.

Speaker Change: I have received.

Speaker Change: Quite a few emails from the patient community generally from loved ones have patients who are on the drug or on that we're on the trial are now on the extension trial.

Speaker Change: They werent begging to continue but they very clearly wanted to continue they understood the constraints of us being a small company and this being very costly.

Speaker Change: So it was you know.

Speaker Change: There was a lot of things that led to it but like I said it was an easy decision.

Speaker Change: It's just the right thing to do for patients and.

Chris Cook: We heard that loud and clear through the clinical team. And I got to tell you, I have received quite a few emails from the patient community, generally from loved ones of patients who are on the drug or on the trial that were on the trial or now on the extension trial. And, you know, they weren't begging to continue, but they very clearly wanted to continue. They understood the constraints of us being a small company and this being very costly.

Speaker Change: To me it struck me is key.

Speaker Change: True to have somebody on.

Speaker Change: A drug for that long and they think that they are getting a benefit from it.

Speaker Change: We're taking them off.

Speaker Change: It's driven by a lot of factors.

Speaker Change: No.

Speaker Change: And Rick I can imagine that.

Speaker Change: <unk> received quite a bit of an interest I mean this is one of the only handful of pivotal.

Speaker Change: Programs ongoing in Alzheimer's.

Speaker Change: From potential partners.

Chris Cook: So it was, you know, it was a lot of things that led to it, but like I said, it was an easy decision. It's just the right thing to do for patients. And, you know, to me, it struck me as cruel to have somebody on a drug for that long. And they think that they're getting a benefit from it and, you know, we're taking them off. So it's driven by a lot of factors.

Rick Barry: Can you describe some of the dynamics.

Rick Barry: There was in the past.

Speaker Change: What would be our anticipation once data is available.

Speaker Change: Hi.

Speaker Change: Yes, I don't think I want to go too far into it but the.

Speaker Change: Realistically I.

Speaker Change: I would not expect us to see.

Speaker Change: I wouldn't expect to see a partnership.

Chris Cook: Yeah. And Rick, I can imagine that you received quite a bit of an interest. I mean, this is one of the only handful of pivotal programs ongoing in Alzheimer's from potential partners. Can you describe some of the dynamics of those in the past and what would be our anticipation once data is available? Well, yeah, I don't think I want to go too far into it, but the realistically, I would not expect us to see, I wouldn't expect to see a partnership before we have faced three data.

Speaker Change: Before we have phase III data.

Speaker Change: Do you think about it from the other side of this is a big pharma company.

Speaker Change: Some business development officer, who would have to take the risk of backing into the Ceo's office, and saying, Hey, I want to make a bet on this company, we don't have data yet.

Speaker Change: Most of the deals you see with Big Pharma. These days are very expensive and they are expensive because they're diverse and they wait until theres, a phase III result, or theres, an FDA approval.

Speaker Change: So it's.

Speaker Change: I guess, the best I could say stay tuned.

Speaker Change: Okay.

Speaker Change: Thank you so much for us and I. Thank you for your questions.

Matthew <unk>: The next question is from Matthew <unk>, a private investor. Please go ahead.

Chris Cook: And if you think about it from the other side, this is a big farmer company, you know, some business development officer would have to take the risk of blocking it with CEO's office and saying, hey, I want to make a bet on this company we don't have data yet. You know, most of the deals you see with big farm in these days are very expensive and they're expensive because they're diverse and they wait until there's a phase three result or there's an FDA approval.

Matthew <unk>: Hello, first off that was a great update.

Matthew <unk>: It's nice to have Jim talking about some of the details on the trials.

Matthew <unk>: And I wanted to thank you personally for focusing on the patients and extending the open labels I think that was a great decision and made a lot of families.

Richard Barry: So it's, I guess the best I could say is stay tuned. Okay, certainly will. Thank you so much for asking.

Speaker Change: Much much more calm and happy.

Speaker Change: And I'd like to congratulate the entire team it's been quite a journey of the last three years, but you guys did an incredible job getting Smith lumps at the doorstep of a completed phase III trial.

Matt Mechtrub: Thank you. Next question is from Matt MacTrabbe, a private investor. Please go ahead.

Speaker Change: Hi, I have two related questions. So some estimates say, there's about 46 million patients worldwide with all farmers.

Matt Mechtrub: Hello. First off, that was a great update. It's nice to have Jim talking about some of the details on the trials. And I wanted to thank you personally for focusing on the patients and extending the open labels. I think that was a great decision and made a lot of families much, much more calm and happy. And I'd like to congratulate the entire team. It's been quite a journey the last three years, but you guys did an incredible job getting Smithlum to the doorstep of a completed phase three trial.

Speaker Change: $5 million in the U S and $11 million in Europe.

Speaker Change: Have you guys analyzed the worldwide demand for some F alarm if theres a successful phase III readout and FDA approval and.

Speaker Change: Can you give any additional color on what steps you're taking to ensure Smith one could be delivered to patients quickly after the FDA approval and scale worldwide.

Speaker Change: Yes.

Speaker Change: It's very timely question so were.

Speaker Change: We don't have a chief commercial officer here for a small company as you know.

Richard Barry: I have two related questions. So some estimates say there's about 46 million patients worldwide with Alzheimer's, six and a half million in the U.S, and 11 million in Europe. Have you guys analyzed the worldwide demand for Smithlum that there's a successful phase three read out an FDA approval? And can you give any additional color on what steps you're taking to ensure Smithlum could be delivered to patients quickly after the FDA approval and scale worldwide?

Speaker Change: But.

Speaker Change: We're interviewing several different firms too.

Speaker Change: To do the commercial plan for us.

Matthew <unk>: In fact, if two or three calls I think scheduled today on that very topic. So.

Matthew <unk>: Sure.

Speaker Change: That's going to be the best way for us to do it and then at that point, we'll decide do we need to have a chief commercial officer and build a commercial team here or not but that will take a look at.

Speaker Change: Whereas the demand.

Speaker Change: It depends on the label obviously.

Speaker Change: And as far as preparing for it I mean, the first thing we have to do and I made reference to it in my remarks.

Richard Barry: Yeah, the very timely question. So we're we don't have a chief commercial officer here. We're a small company, as you know, but we're interviewing several different firms to do the commercial plan for us. In fact, it's two or three goals. I think schedule today on that very topic. So it's that's going to be the best way for us to do it. And then at that point, we'll decide, do we need to have a chief commercial officer and build a commercial team here or not?

Speaker Change: We have to beef up the API or active pharmaceutical ingredients and we've done that.

Matthew <unk>: We're also looking at we have a manufacturer right now that is making me.

Matthew <unk>: Inadequate number of tablets.

Matthew <unk>: But for the demand that.

Matthew <unk>: We are internally forecasting it is not enough. So we're looking at other sources for that manufacturing.

Richard Barry: But that will take a look at where as a demand depends on the label obviously. And as far as preparing for it, I mean, the first thing we have to do, and I made reference to it in my remarks is, you know, we have to beef up the API or the act of pharmaceutical ingredient. And we've done that. We're also looking at, we have a manufacturer right now that is making making an adequate number of tablets. But for the demand that, you know, we're internally forecasting, it's not enough. So we're we're looking at other sources for that manufacturing.

Speaker Change: Okay. So you mean.

Speaker Change: New company that can scale up.

Speaker Change: Successfully to a worldwide.

Speaker Change: No.

Speaker Change: Yeah.

Speaker Change: Another plant within the same company.

Speaker Change: We have greater capacity, but yes.

Speaker Change: Second source in the second source might have to be a lot larger.

Speaker Change: Okay. That's all I had.

Matt: Okay. Thank you Matt.

Matt: Thank you.

Speaker Change: So I think that was our last question.

Speaker Change: I just wanted to say, we really appreciate you joining us today.

Speaker Change: And I want everybody to remember.

Richard Barry: Okay, so you mean a new company that can scale up successfully to a worldwide scale? Yeah, or, you know, another plant within the same company that you know, would have greater acidity. But yeah, a second source and the second source might have to be a lot larger.

Speaker Change: Our goal is to bring the best in class Alzheimer's patients that's why we're here.

Speaker Change: Thanks for listening have a good day.

Speaker Change: This does now conclude today's conference teleconference. You may now disconnect. Your lines at this time. Thank you for your participation.

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Speaker Change: Welcome to Cassava Sciences reports for the second quarter 2024.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: <unk> and answer session will follow the formal presentation. As a reminder, this webcast is being recorded.

Speaker Change: During this call and the question and answer session. Afterwards Representatives of Cassava Sciences may make what are known as forward looking statements. A forward looking statement is one off that is not a historical fact forward looking statements are not guarantees and they involve risks uncertainties and assumptions.

Speaker Change: Such statements represent our current expectations or beliefs concerning future events or future performance forward looking statements are predictions only based upon information currently available to the company average.

Matt Mechtrub: Okay, that's all I had. Okay, thank you, thank you.

Speaker Change: Actual events or results could differ materially from those made in any forward looking statements due to a number of factors risks and uncertainties.

Speaker Change: Please refer to cassava Sciences' recent filings with the FCC, including Form 10-K for a description of the factors that could cause events or results to differ materially from those made in forward looking statements. Importantly, This conference call contains time sensitive information that is accurate only.

Speaker Change: As of the date of the live webcast. The eighth of August 2024, except as required by law. The company undertakes no obligation to revise or update any forward looking statements to reflect events and circumstances. After the date of this webcast. It is now my pleasure to turn today's meeting over to.

Speaker Change: Rick Barry Executive Chairman of the board of directors the floor is yours.

Rick Barry: Thank you Hilda.

Rick Barry: Good morning, and thank you for joining US with me today are three key members of the cassava team Dr. Jim <unk>, our Chief Medical Officer.

Speaker Change: Eric Schoen to serve as Chief Financial Officer, and Chris Cook, Our General Counsel and internal Swiss Army knife.

Rick Barry: You'll be meeting other talented players on the team and the future.

Rick Barry: We have a lot of material to cover this morning, So I'll get right to it.

Speaker Change: By now you've hopefully seen the press release that we put out this morning that discusses some of our progress during the second quarter.

Richard Barry: So I think that was our last question. I just want to say we really appreciate you joining us today. And I want everybody to remember our goal is to bring the best in classroom Alzheimer's patients. That's why we're here. Thanks for your listening.

Rick Barry: Specifically, we highlighted the progress in our phase III trials.

Operator: Have a good day.

Operator: This does now conclude today's conference. You may now disconnect your lines at this time.

Speaker Change: The execution of these trials has been impressive.

Operator: Thank you for your participation.

Speaker Change: <unk>, our last patient last visit in our rethink trial in early Q4, and a top line readout of the data by year end.

Speaker Change: We also expect our second phase III trial, we focus to readout in mid year.

Speaker Change: We remain optimistic about the results of these trials, we think they are well powered to demonstrate a statistically significant difference between drug and placebo arms, but investors should keep in mind that no. One can correctly forecast the results of any trial. There are of course no guarantees.

Operator: [inaudible] I know I know I know[inaudible] I know I know I know I know I know I know I know I know I know I know[inaudible] and thank you for your time, and thank you for your time, and thank you for your time[inaudible] your time, and thank you for your time, and thank you[inaudible][inaudible] and thank you for your time[inaudible] time, and thank you for your time[inaudible] your time, and thank you for your time, and thank you for your time, and thank you for your time,[inaudible] your time, and thank you for your time Welcome to Cassava Sciences Report for the second quarter of 2024.

Operator: At this time, all participants are in a listen only mode. A question and answer session will follow the former presentation. As a reminder, this webcast is being recorded. During this call and the question and answer session afterwards, representatives of Cassava Sciences may make what are known as forward looking statements. A forward looking statement is one of that is not a historical fact. Forward looking statements are not guarantees and they involve risks on certainties and assumptions.

Speaker Change: Earlier in the second quarter.

Speaker Change: Cassava raised $123 million from the warrants that we distributed to shareholders in January.

Speaker Change: The warrants allow shareholders to invest directly in the company or to sell their warrants in the open market.

Speaker Change: The funds that we raised from the program significantly strengthened our balance sheet.

Speaker Change: As a reminder, several of US inside the company converted all or a portion of our warrants and to stock including me.

Operator: Such statements represent current expectations or beliefs concerning future events or future performance. Forward looking statements are predictions only based upon information currently available to the company. Actual events or results could differ materially from those made in any forward looking statements due to a number of factors, risks and uncertainties. Please refer to Cassava Sciences' recent filings with the SEC, including form 10K for a description of the factors that could cause the events or results to differ materially from those made in forward looking statements.

Speaker Change: I converted every warrant that was available to me.

Speaker Change: Suffice it to say that we are believers.

Operator: Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live webcast, the 8th of August, 2024. Exept as required by law, the company undertakes no obligation to revise or update any forward looking statements to reflect events and circumstances after the date of this webcast.

Speaker Change: We expect to end 2024, with a cash balance of between 117 and $127 million.

Speaker Change: Which will allow us enough liquidity to get past, our phase III readouts and by the way that cash number includes the impact of a potential settlement, which I will discuss shortly.

Speaker Change: We're very grateful for the confidence and investors have demonstrated in cassava.

Speaker Change: Just last week, we announced that we are lengthening our open label extension trials for both our phase II and phase III patients I want to take a minute to explain why we thought this is important.

Speaker Change: Prior to making this change patients who participated in our phase III program had the opportunity, but not a requirement.

Speaker Change: To remain on our drug <unk> for an additional two years.

Speaker Change: After being on the drug in some cases for four years. Some of these phase III patients, we're losing access to it.

Speaker Change: In our phase III program patients have the opportunity to go on the phone for 12 months after completing the trial.

Speaker Change: It is important for our patients to have continued access to our drug.

Speaker Change: Just imagine being the patient or the loved one of a patient who was on the drug and had perceived that the patient had received the benefit from the drug, but who had exhausted the duration of the open label extension.

Speaker Change: After asking patients to take the inherent risk of joining our clinical trials. We felt it was unfair to those patients to not continue to offer them. The option to continue at least until we knew the results of our phase III programs.

Speaker Change: And the FDA has the opportunity to review our results.

Speaker Change: Honestly the decision to expand our open label trials was not a hard one.

Speaker Change: It was driven by our clinical team, who carefully listened to the investigators at our clinical sites.

Speaker Change: Cassava needs to prepare for success and even though it will add significant cost over the next two to three years. It is absolutely. The best thing we could do for our patients.

Speaker Change: It bears repeating that 89% of the patients in our trials have elected to continue on the open label extensions.

Speaker Change: You may have also noticed that we added further cognition and plasma biomarker monitoring every six months for patients who choose to continue on our open label extension trial.

Speaker Change: We're doing that because the data we generate could have real value and helping us understand the potential long term impact of similar film.

Speaker Change: Our phase III program has been very well executed and on track.

Dr. <unk>: Dr. <unk> will tell you more about that shortly.

Dr. <unk>: Now we must plan for success.

Dr. <unk>: Continuing our open label extension trials was one way for planning for success, but in the coming months, you will see others.

Dr. <unk>: You will notice an uptick in our R&D spending during the second half of the year.

Dr. <unk>: Some of that increased spending will be devoted to preparation for the commercial launch of our drugs.

Speaker Change: We are currently ramping up our active pharmaceutical ingredient purchases.

Speaker Change: Securing increased outsourced manufacturing capacity and exploring distribution capabilities.

Speaker Change: We have the plan for cassava successful transition from a development stage company to a commercial enterprise.

Speaker Change: What we cannot accept is for us to fail the drug.

Speaker Change: There was an overwhelming need for Alzheimer's patients to have a drug that has the profile that <unk> has displayed so far and its development.

Speaker Change: We cannot let patients and their loved ones down.

Speaker Change: In today's press release, we discussed the $40 million reserve, we're taking for potential settlement with the Securities and Exchange Commission.

Speaker Change: This statement does not mean that we have an agreement in principle with the SEC yet, but it does mean that we now have enough information to understand what our exposure could be.

Speaker Change: If we do come to a resolution with the SEC that will end their investigation of the company.

Speaker Change: I should add that we are continuing to have constructive conversations with both the SEC and the department of Justice.

Speaker Change: There really isn't more we can say about this now, but we hope to be able to do so before long.

Speaker Change: We are not taking a charge of this magnitude lightly $40 million is an awful lot of money for anyone let alone a company of our size.

Speaker Change: But it is our goal to put our past behind us and focus entirely on our mission developing a best in class treatment for Alzheimer's patients.

Speaker Change: Many of you have likely read the letter I wrote to the cassava community after becoming executive chair on July 17th.

Speaker Change: In that letter I told the story of my original connection to Alzheimer's disease. The father of a good friend named Buddy.

Speaker Change: Whose life was cut short by the disease.

Speaker Change: Since I wrote that letter I've come to understand that nearly everyone has a buddy story and hear cassava. Each of our people have many bodies stories before July 17th I thought to save had a good management team in place, but now I appreciate how great. The team really is.

Richard Barry: It is now my pleasure to turn today's meeting over to RigBerry, Executive Chairman of the Board of Directors, the floor is yours. Thank you, Judith. Good morning and thank you for joining us. With me today are three key members of the Cassava team. Dr. Jim Kupek, our Chief Medical Officer, Eric Shone, Cassava's Chief Financial Officer, and Chris Cook, our General Counsel and Internal Swiss Army Knife. You'll be meeting other talented players on the team in the future.

Speaker Change: What I see as a group are determined and dedicated people who come to work each day, because they are committed to making a difference in the lives of patients and their families and that is what motivates us.

Richard Barry: We have a lot of material to cover this morning, so I'll get right to it. By now you have hopefully seen the press release that we put out this morning that discusses some of our progress during the second quarter. Specifically, we highlighted the progress in our phase three trials. The execution of these trials has been impressive. We expect our last patient last visit in our rethink trial in early Q4 and a top line readout of the data by year end.

Speaker Change: As you might imagine I had a lot to think about before taking on this challenge.

Richard Barry: We also expect our second phase three trial we focus to read out in mid-year. We remain optimistic about the results of these trials. We think they're well-powered to demonstrate a statistically significant difference between the drug and placebo arms, but investors should keep in mind that no one can correctly forecast the results of any trial. There are, of course, no guarantees. Earlier in the second quarter, Cassava raised $123 million from the warrants that we distributed to shareholders in January.

Speaker Change: Cassava Sciences has been through an awful lot. The last few years and frankly some of our loans may have been self inflicted.

Speaker Change: Clearly not.

Speaker Change: Most of you are probably familiar with the expression that what doesn't kill you makes you stronger.

Speaker Change: Our company has been the subject of intense scrutiny for the past three years.

Speaker Change: Today, we are a stronger company because of it.

Speaker Change: We are thinking ahead to what we could create and not dwelling on the various challenges we have faced in the past.

Speaker Change: For me the opportunity to work alongside people, who are so focused on bringing what could be a game changing therapy to patients who are in dire need of one.

Richard Barry: The Warrens allowed shareholders to invest directly in the company or to sell their warrants in the open market. The funds that we raised from the program significantly strengthened our balance sheet. As a reminder, several of us inside the company converted all or a portion of our warrants into stock, including me. I converted every warrant that was available to me. Suffice it to say that we are believers. We expect to end 2024 with a cash balance of between 117 and 127 million, which will allow us enough liquidity to get past our phase three readouts. And by the way, that cash number includes the impact of our potential settlement, which I will discuss shortly. We are very grateful for the confidence and investors that demonstrated in Cassava.

Richard Barry: Just last week, we announced that we are lengthening our open-label extension trials for both our phase two and phase three patients. I want to take a minute to explain why we thought this was important. Prior to making this change, patients who participated in our phase two program had the opportunity but not the requirement to remain on our drug, Simifolan, for an additional two years. After being on the drug, in some cases for four years, some of these phase two patients were losing access to it.

Speaker Change: It was too great for me to ignore.

<unk>: For more than three decades, Dr. <unk> has been intimately involved in drug development for companies like Pfizer, Sanofi and Ciba Geigy.

Speaker Change: Before joining cassava and 2021.

<unk>: Jim served as Vice President Global clinical leader for Parkinson's disease, and clinical head of Neuroscience research unit at Pfizer.

Speaker Change: I should add that Dr. <unk> is one of the key reasons why I joined the board of Cassava and 2021.

Speaker Change: Jim also serves the independent review committee the IRC at target ALS also known as Lou Gehrig's disease, another neuro degenerative disorder any surface pro bono.

Speaker Change: The truth is that Jim's experience in running trials like this is so deep he's probably forgotten more about running a phase III trial than most people will have ever learned.

Speaker Change: I've asked Dr. <unk> to walk you through our phase III program.

Speaker Change: So you understand how well controls and rigorous program it's.

Speaker Change: Jim.

Speaker Change: Yes.

Jim <unk>: Yeah, Hey, Thanks, Rick for the introduction and good morning, everyone. This is Jim <unk> Chief Medical Officer can solve the sciences.

Jim: As Rick stated I've been actively involved in drug development efforts at various companies for over 30 years and I've.

Jim: Had a particular focus on investigational drugs for the treatment of neurologic diseases since the late 19 nineties.

Jim: Worked on teams have successfully developed drugs and welcome to the pharmacy shelves. However.

Richard Barry: In our phase three program, patients had the opportunity to go on Simifolan for 12 months after completing the trial. It is important for our patients that have continued access to our drug. Just imagine being the patient or the loved one of a patient who was on the drug and had perceived that the patient had received the benefit from the drug, but who exhausted the duration of the open-label extension. After asking patients to take the inherent risk of joining our clinical trials, we felt it was unfair to those patients to not continue to offer them the option to continue, at least until we knew the results of our phase three programs, and the FBA had the opportunity to review our results.

Speaker Change: Eloping, new medicines for Neurodegenerative disorders, such as pulse timely disease, Parkinson's disease ALS as.

Speaker Change: More often than not been associated with failure.

Speaker Change: The clinical outcomes or endpoints that reassessing randomized clinical studies are associated with large variance and phase III studies and <unk> studies had to be quite large so hopefully show enough of the treatment signal to then justify a very large phase III financial investment.

Richard Barry: Honestly, the decision to expand our open-label trials was not a hard one. It was driven by our clinical team who carefully listened to the investigators at our clinical sites. Cassava needs to prepare for success, and even though it will add significant costs over the next two to three years, it is absolutely the best thing we could do for our patients. It bears repeating that 89% of the patients in our trials have elected to continue on the open-label extensions.

Richard Barry: You may have also noticed that we added further cognition and plasma biomarker monitoring every six months for patients who choose to continue on our open-label extension trial. We're doing that because the data we generate could have real value in helping us understand the potential long-term impact of Simifilm. Our phase three program has been very well executed and on track. Dr. Kufeck will tell you more about that shortly.

Speaker Change: When I, let these phase II and phase III programs in the past, we frequently know until the end of a large phase III study with.

Richard Barry: Now we must plan for success. Continuing our open label extension trials was one way for planning for success, but in the coming months you will see others. You will notice an uptick in our R&D spending during the second half of the year. Some of that increased spending will be devoted to preparation for the commercial launch of our drug. We are currently ramping up our active pharmaceutical ingredient purchases, securing increased outsourced manufacturing capacity, and exploring distribution capabilities.

Speaker Change: The drug itself.

Speaker Change: And this was always sent for both patients everyone involved in the search efforts.

Speaker Change: Drug development for neurologic diseases.

Speaker Change: Turning to change dramatically around 20 <unk> with the.

Richard Barry: We have to plan for Cassava's successful transition from a development stage company to a commercial enterprise. What we cannot accept is for us to sell the drug. There is an overwhelming need for Alzheimer's patients to have a drug that has the profile that Simaphillum has displayed so far in its development. We cannot let patients and their loved ones down. In today's press release, we discussed the $40 million reserve we are taking for potential settlement with the Securities and Exchange Commission.

Jim: The advent of ultra sensitive fluid based biomarkers technological advancement that many have characterized as a biomarker with evolution to.

Speaker Change: Brain diseases.

Speaker Change: Biomarkers allow us to examine the machinery inside the cells brain cells with patients with Alzheimers disease.

Speaker Change: Why is this important.

Speaker Change: All of us in the research community understand that drug induced changes in.

Speaker Change: In the most basic cellular functions must occur first with one expects to also see cognitive benefit later on.

Speaker Change: In January 2021 I accepted an offer from cassava to design and execute a significant phase III program in patients with mild to moderate Alzheimers disease.

Speaker Change: I'm very excited and I consider this a great opportunity to leverage both on many years of Alzheimers disease trial experience.

Speaker Change: The availability of these <unk> biomarkers to design a true state of the art Phase III program.

Speaker Change: Got my colleagues in the research community with you as the new gold standard.

Speaker Change: Soon after my arrival, we had a successful into phase II meeting yesterday.

Speaker Change: They agree that we had enough evidence to justify transition to phase III.

Richard Barry: This statement does not mean that we have an agreement in principle with the SEC yet, but it does mean that we now have enough information to understand what our exposure could be if we do come to a resolution with the SEC that will end their investigation of the company. I should add that we are continuing to have constructive conversations with both the SEC and the Department of Justice. The really isn't more we can say about this now, but we hope to be able to do so before long.

Linda: I joined two phase III studies and had been reviewed by key colleagues and leaders in the field to ensure they were both scientifically rigorous and operationally feasible Linda.

Richard Barry: We are not taking a charge of this magnitude lightly. $40 million is an awful lot of money for anyone, let alone a company of our size. But it is our goal to put our paths behind us and focus entirely on our mission, developing a best in-class treatment for Alzheimer's patients.

Linda: And then the FDA approved each protocol via a regulatory procedure called a special protocol assessment or S. P. A.

Speaker Change: I took advantage of the biomarker Revolution.

Gary: Gary unique design element to these studies was to require a plasma based plus formulated tell biomarker level to confirm abnormal neuropathology instead of a pet scan pet.

Richard Barry: Many of you have likely read the letter I wrote to the Casava community after becoming Executive Chair on July the 17th. In that letter, I told the story of my original connection to Alzheimer's disease, the father of a good friend named Buddy, whose life was cut short by the disease. Since I wrote that letter, I've come to understand that nearly everyone has a buddy story. And here at Casava, each of our people have many buddy stories.

Speaker Change: Skins are expensive and they can have a significant negative impact on rapid study recruitment.

Richard Barry: Before July 17th, I thought Casava had a good management team in place, but now I appreciate how great the team really is. What I see is a group of determined and dedicated people who come to work each day because they are committed to making a difference in the lives of patients and their families. And that is what motivates us. As you might imagine, I had a lot to think about before taking on this challenge.

Speaker Change: We wouldn't lead with this strategy and other sponsors have subsequent we've started to do the same thing.

Speaker Change: In 2021, we selected Premier research Cielo to help operationalize two studies.

Richard Barry: Casava Sciences has been through an awful lot the last few years. And frankly, some of our wounds may have been self-inflicted, while some clearly have not. Most of you are probably familiar with the expression that what doesn't kill you makes you strong. Our company has been the subject of intense scrutiny for the past three years. Today we are a stronger company because of it. We are thinking ahead to what we could create and not dwelling on the various challenges we have faced in the past.

Speaker Change: I've worked with many senior rose during my career.

Speaker Change: I have to tell you that premier has been outstanding and they have worked as hard and diligently on these studies as my own team.

Richard Barry: For me, the opportunity to work alongside people who are so focused on bringing what could be a game-changing therapy to patients, who are in dire need of one, was too great for me to ignore. For more than three decades, Dr. Kupiec has been intimately involved in drug development for companies like Pfizer, Santa Fe, and C. Bugatti. Before joining Cassava in 2021, Jim served as Vice President, Global Clinical Leader for Parkinson's Disease, and clinical head of the Neuroscience Research Unit at Pfizer.

Richard Barry: I should add that Dr. Kupiec is one of the key reasons why I joined the board of Cassava in 2021. Jim also serves the Independent Review Committee, the IRC, at Target ALS, also known as Lugaric's Disease, another neurodegenerative disorder, and he serves as pro bono. The truth is that Jim's experience in running trials, like this, is so deep. He's probably forgotten more of our running a Phase III trial than most people will have ever learned.

Speaker Change: Countless hours were spent selecting and vetting high quality investigators to conduct these studies here in the U S and also in Canada, Puerto Rico, Australia, and South Korea.

James Kupiec: I've asked Dr. Kupiec to walk you through our Phase III program, so you understand how well controlled and rigorous this program is. Jim? Yeah, hey, thanks for the introduction. Good morning, everyone. This is Jim Kupiec, Chief Medical Officer at Cassava Sciences. As Rick stated, I've been actively involved in drug development efforts at various companies for over 30 years, and I've had a particular focus on investigational drugs, including the Neurologic Diseases, since the late 1990s.

Speaker Change: We selected declaring a company with two decades of experience assessing.

James Kupiec: I've worked on teams that have successfully developed drugs and brought them to the pharmacy shelves, however, developing new medicines for neurodegenerative disorders such as Alzheimer's disease, Parkinson's disease, or ALF, has more often than not been associated with failure. The clinical outcomes or endpoints that we assess in randomized clinical studies are associated with large variants, and Phase II studies and AD studies had to be quite large to hopefully show enough of a treatment signal to then justify a very large Phase III financial investment.

Speaker Change: <unk> and MRI scans in patients with Alzheimer's disease.

James Kupiec: When I led these Phase II and Phase III programs in the past, we quickly did not know until the end of a large Phase III study that the drug had failed, and this was always sad for both patients and everyone involved in research efforts. Drug development for neurologic diseases began to change dramatically around 2018 with the advent of ultra-sensitive fluid-based biomarkers, a technological advancement that many have characterized in the biomarker revolution for brain diseases.

Speaker Change: They would evaluate the thousands of images, we would collect in this program.

Speaker Change: We selected Cigna health.

Speaker Change: Stellar leader in the field of Labor training later assessments to ensure each cognitive and functional assessments at the clinical sites was conducted against a gold standard.

Speaker Change: Similar high performance companies were selected to collect and analyze safety lab values, you see Gs and even patient compliance with study drug.

Speaker Change: Now with everything in place, including IRB approvals, we began to screen and recruit patients in late 2021.

Speaker Change: We have about 170 committed.

Speaker Change: Search sites worldwide in less than two years, we have recruited over 1900 patients in both studies over 555 patients have completed their participation in the <unk>.

Speaker Change: Two we rethink study.

Speaker Change: Over 420 patients have completed their participation in the 76 week refocus studied drove a total of 975 computers.

Speaker Change: It is important to note that there is no overlap of clinical research sites between the two studies the studies have a separate completely different.

Speaker Change: Set of investigative supporting research.

Speaker Change: As just mentioned the rethink study has 52 weeks in Lincoln.

Speaker Change: We used the potential cognitive and functional benefits of the film in patients with mild to moderate Alzheimers disease.

Speaker Change: Half of the 800, plus patients were randomized to film and half were randomized to placebo.

Speaker Change: <unk>, 70% of the randomized patients had mild dementia and approximately 30% of randomized patients.

Speaker Change: Dementia.

Speaker Change: A substantial number of patients and the rethink study.

Speaker Change: <unk> also agreed to have their plasma analyzed for key Alzheimers disease Biomarkers. These blood samples will be analyzed by completely independent clear certified accredited laboratory.

Speaker Change: Cassava Premier and our other collaborators have worked very closely to ensure the integrity of this entire study.

Speaker Change #102: One of this program to be the best I had ever created worked out well.

Speaker Change: We reviewed data from research sites monitor any areas that occur we work closely with the IRB is to ensure the sites appropriately conducting their efforts in a way that's consistent with good clinical practice.

James Kupiec: Biomarkers allow us to examine the machinery inside the cells, brain cells, the patients with Alzheimer's disease. Why is this important? All of us in the research community understand that drug and disease changes, in the most basic cellular functions must occur first if one expects to also see positive benefit later on. In January 2021, I accepted an offer from Cassava to design and execute the Simiphone Phase 3 program in patients with mild to moderate Alzheimer's disease.

Speaker Change: We conduct routine audits, we redeemed all safety reports and we document everything.

James Kupiec: I was very excited and I considered this a great opportunity to leverage both my many years of Alzheimer's disease trial experience and the availability of these new biomarkers to design a true state-of-the-art Phase 3 program that my colleagues in the research community would do as a new gold standard. So after my arrival, we had a successful interface to meeting with the FDA, in which they agreed that we had enough evidence to justify transitioning to Phase 3.

Speaker Change: We call this doing it by the book.

Speaker Change: We know that the FDA and other regulatory authorities expect this of us in the.

James Kupiec: I designed two Phase 3 studies and had them reviewed by key colleagues and leaders in the field to be sure they were both scientifically rigorous and operationally feasible. Then the FDA approved each protocol via a regulatory procedure called the Special Protocol Assessment for SPA. I took advantage of the biomarker revolution. A very unique design element to these studies was to require a plasma-based phosphorylated tau biomarker level to confirm abnormal neuropathology. Instead of a PET scan, PET scans are expensive and they can have a significant negative impact on rapid study recruitment.

Speaker Change: They themselves conduct audits of cassava, our CLO, our other collaborators and many of our research sites.

James Kupiec: We were in lead with this strategy and other sponsors have subsequently started to do the same thing. In 2021, we selected premier research as a COO to help operationalize two studies. I have to tell you that premier has been outstanding and they have worked as hard and diligently on these studies as my own team. Countless hours were spent selecting and vetting high quality investigators to conduct these studies here in the U.S, and also in Canada, Puerto Rico, Australia, and South Korea.

Speaker Change: I need to highlight that the patients their physician investigators all of us are cassava and the premier remain completely blinded to what treatment each patient has taken.

James Kupiec: We selected a Clareo, a company with two decades of experience in assessing PET and MRI scans in patients with Alzheimer's disease and they would evaluate the thousands of images we would collect in this program. We selected SIGGET Health, a stellar leader in the field of radar training, radar assessments, to ensure each cognitive and functional assessment at the clinical sites was conducted against a gold standard. Similar high performance companies were selected to collect and analyzed safety lab values, ECGs, and even patient compliance with study blood.

James Kupiec: Now with everything in place, including IRB approvals, we began to screen and recruit patients in late 2021. We have about 170 committed research sites worldwide and in less than two years, we have recruited over 1,900 patients in both studies. Over 555 patients have completed their participation in the 52-week re-think study and over 420 patients have completed their participation. In the 76-week re-focus study, over a total of 975 completed. It's important to note that there's no overlap of clinical research sites between the two studies.

Speaker Change: Once the last patient is past his or her last visit and therefore.

Speaker Change: We will work quickly and thoroughly to ensure that all minor inconsistency. There are questions in the database or address we will confirm the accuracy of each and every piece of data.

Speaker Change: This includes for example, all clinical data cognitive assessment data lab, and ECG data imaging data.

Speaker Change: Once we have satisfied the database will be locked in at that point, we cannot make any changes to its content.

James Kupiec: The studies have a separate, completely different set of investigators supporting research. As Justin mentioned, the rethink study is 52 weeks in length and evaluates the potential cognitive and functional benefits in the film and patients with mild to moderate Alzheimer's disease. Half of the 800-plus patients were randomized to Symmath Dylan and half were randomized to placebo. Approximately 70% of the randomized patients have mild dementia and approximately 30% of the randomized patients have moderate dementia.

Speaker Change: David Lock has always been a significant and dramatic milestone for me on any of the programs that I've loved.

Premier Research: Premier Research will make this happen at which point the walk and blinded database, including blinded biomarker results will be shared with the bio statisticians.

James Kupiec: A substantial number of patients in the rethink study have also agreed to have their plasma analyzed for key Alzheimer's disease biomarkers. These blood samples will be analyzed by a completely independent, clear-certified, accredited laboratory. Cassava, premier, and our other collaborators have worked very closely to ensure the integrity of this entire study. I, one of this program to be the best I had ever created or worked on. We reviewed data from research sites, monitor any errors that occur.

Speaker Change #102: Tara Corporation, along with the treatment codes. This will allow them to break the blind and determined with us and mcdonalds as effective as.

Premier Research: Everyone at Cassava and Premier continues to remain blinded during this analytical period pipe and tariff.

Speaker Change: <unk> is the Premier independent Biostatistician Biostatistician group, both statistics I should say.

Speaker Change: Working on <unk> studies in my opinion.

Speaker Change #102: And that of many others when start to Suzanne hindrance and her team members that entire conclude they are properly analyze all the data they will call us to set up a meeting to go over all of their analyses positive or negative.

Speaker Change: We will then prepare a public disclosure.

Speaker Change: Committed to doing this by the end of the year.

Speaker Change: Yes.

Speaker Change: Moving ahead, the second phase III study is to refocus study.

Speaker Change: And that has recruited over 1100 patients.

Speaker Change: This study and to rethink study are very similar in that patient selection is the same.

Speaker Change: However, and refocus study is 76 weeks in length.

Speaker Change: And there are three different treatments, which a patient can be randomized two doses of sunoco arm and placebo.

Speaker Change: As the study is six months longer in duration, we expect top line results to report out mid year 2025.

Speaker Change: The refocus study is also different in that many patients have the option of participating in a number of sub studies, which evaluate the impact of some of the film on CSF Biomarkers plasma Biomarkers amyloid pet imaging Tau pet imaging and brain volume changes as determined by MRI.

Speaker Change: The goal of these sub studies is to demonstrate that some film has the potential to modify the underlying disease process of all time is disease.

Speaker Change: Patients in both phase III studies in the option then of rolling over into the open label extension study and as Rick shared some 89% of patients have elected to do just that.

Speaker Change #104: As Chief Medical Officer for Cassava on ultimately responsible for the safety of these patients and I spend a lot of time reviewing all types of safety lab ECG reports, along with a medical monitor per year.

Speaker Change: When a patient of course, a new medical condition or symptom.

Speaker Change: The adverse event for the purpose of regulatory filings.

Speaker Change: I'm pleased to report that no serious adverse event has yet been linked to study drugs any of our phase II or phase III studies.

Speaker Change: A huge amount of safety data has now been shared on two separate occasions with the data safety monitoring board or <unk>.

James Kupiec: We were closely with the IRBs to ensure the sites are properly conducting their efforts in a way that's consistent with good clinical practice. We conduct routine audits and we review and assess all safety reports and we document everything. We call this doing it by the book. We know that the FDA and other regulatory authorities expect this of us and they themselves conduct audits of Cassava, our CRO, our other collaborators, and many of our research sites.

Speaker Change: Have instructed us to continue the studies without change.

Speaker Change: This board is composed of very experienced independent clinical scientists and statisticians.

Speaker Change: They are charged with reviewing all safety data, even if they feel obligated to look at any unblinded safety data behind closed doors as per their charter and a strict set of rules that enables such a assessment.

James Kupiec: I need to highlight that the patients, their physician investigators, all of us at Cassava and the premier remain completely blinded to what treatment each patient is taking. Once the last patient has passed his or her last visit in the fall, we will work quickly and thoroughly to ensure that all minor inconsistencies or questions in the database are addressed. We will confirm the accuracy of each and every piece of data. This includes, for example, all clinical data, cognitive assessment data, lab and ECG data, imaging data.

James Kupiec: Once we are satisfied, the database will be blocked and at that point we cannot make any changes to his content. Data lock has always been a significant and dramatic milestone for me on any of the programs that I've led. Premier research will make this happen at which point the lock and blinded database, including blinded biomarker results, will be shared with the biostatisticians at the Pintera Corporation, along with the treatment codes. This will allow him to break the blind and determine whether it's in its own as effective.

Speaker Change: They are attached to advise cassava on how best to ensure the safety of our study participants.

James Kupiec: Everyone at Cassava and Premier continue to marry blinded during this analytical period by Pintera. Pintera is the premier independent biostatistician group, by statistics route, I should say, working on AD studies in my opinion in that of many others. Once Dr. Suzanne Hendrix and her team members at Pintera conclude they have properly analyzed all the data, they will call us to set up a meeting to go over all their analyses, positive or negative.

Speaker Change: Any changes in the conduct of the study are required.

Speaker Change: This is an extra step we've taken to ensure patient safety.

Speaker Change: <unk> has already met twice and we will meet again for the third time next month.

Speaker Change: With that my update for phase III, but I wanted to share, but if I may I'd like to.

Speaker Change: Sure final personal note.

Speaker Change: I was excited when I joined cassava, but I'm, even more excited and optimistic now about some of the film and its chance of success in phase III.

Speaker Change: <unk> continues to be safe and well tolerated in a very large number of patients.

Speaker Change: Clustered data from the 24 month open label Phase III safety study was remarkable in that patients with mild to mentioned apparently had no significant decline during that two year treatment period.

Speaker Change: If this is true.

Speaker Change: And replicated in phase III, it would represent an exceptional achievement and the significant events in the field.

James Kupiec: We will then prepare a public disclosure and we are committed to doing this by the end of the year. Moving ahead, the second phase three study is the Rift Focus Study, and that has recruited over 1,100 patients. This study and the Rift Think Study are very similar in that patient selection is the same. However, the focus study is 76 weeks in length and there are three different treatments to which a patient can be randomized.

Speaker Change: So thanks for everybody on the line for your attention and I look forward to sharing our results with.

James Kupiec: Two doses are synopelom and placebo. As the study is six months longer in duration, we expect top-line results to report out mid-year 2025. The Rift Focus Study is also different in that many patients have the option of participating in a number of substudies which evaluate the impact of synopelom on CSF fluid biomarkers, plasma biomarkers, amaway pet imaging, tau pet imaging, and brain volume changes as determined by them are. The goal of these substudies is to demonstrate that synopelom has the potential to modify the underlying disease process of Alzheimer's disease.

Speaker Change: At the end of the year Rick back to you.

Rick Barry: Thanks, so much for that Tim.

Eric Schoen: I'm now going to ask Eric Schoen, Chief Financial Officer to discuss our second quarter results and our financial projections for the remainder of 'twenty four.

James Kupiec: Patients in both phase three studies have the option then of rolling over into the open label extension study, as Rick shared some 89% of patients have elected to do just that. As chief medical officer, I am ultimately responsible for the safety of these patients and spend a lot of time reviewing all types of safety lab and ECG reports along with the medical monitor at premier. When a patient records a new medical condition or symptom, this is called an adverse event for the purpose of regulatory filings.

Eric Schoen: Thanks, Rick.

Eric Schoen: On the cash front, we ended the June quarter with $207 $3 million in cash.

Eric Schoen: That balance is expected to be sufficient for operations due to the conclusion of both ongoing phase III trials and into calendar 2026, even after considering the potential $40 million loss contingency recorded in Q2 to resolve the SEC investigation that was discussed by Rick.

James Kupiec: I am pleased to report that no serious adverse event has yet been linked to study drug in any of our phase two or phase three studies. A huge amount of safety data has now been shared on two separate occasions with the data safety monitoring board or DSMB who have instructed us to continue the studies without change. This board is composed of very experienced, independent clinical sciences and statistician and they are charged with reviewing all safety data, even if they feel obligated to look at any unblinded safety data behind closed doors as per their charter and a strict set of rules that enable such an assessment.

James Kupiec: They are tasked to advise Kassava on how best to ensure the safety of our study participants and if any changes in the conduct of the study are required. This is yet an extra step we've taken to ensure patient safety. The DSMB has already met twice and we will meet again for the third time next month.

James Kupiec: Brick death is my update for phase three that I wanted to share but if I may, I'd like to share a final personal note. I was excited when I joined Kassava but I'm even more excited and optimistic now about semaphilm and its chances of success in phase three. Semaphilm continues to be safe and well-toleried in a very large number of patients plus the data from the 24-month open-labeled Phase Two Safety Study was remarkable in that patients with mild dementia apparently had no significant decline during that two-year treatment period.

Eric Schoen: Rick also covered the successful completion of our warrant distribution during the second quarter.

James Kupiec: If this is true and replicated in phase three, it would represent an exceptional achievement in a significant event in the field. So thanks for everybody in the line for your attention. I look forward to sharing our results with you at the end of the year.

Eric Schoen: During the duration of the program a total of approximately $3 8 million warrants were exercised.

Richard Barry: Let's get back to you. Thanks so much for that, Jim.

Eric Schoen: I'm now going to ask Eric Schoen, Chief Financial Officer, to discuss our second quarter results and our financial projections for the remainder of 24. Thanks, Rick. On the cash front we ended the June quarter with 207.3 million in cash. That balance is expected to be sufficient for operations through the conclusion of both ongoing phase three trials and into calendar 2026. Even after considering the potential $40 million loss contingency recorded in Q2 to resolve the SEC investigation that was discussed by Rick.

Eric Schoen: As a result, the company sold five 7 million common shares at $22 per share for gross proceeds totaling $126 3 million.

Eric Schoen: After offering costs net proceeds to the company were $123 6 million.

Speaker Change: There are currently no remaining warrants outstanding.

Speaker Change: The work program was a really good boost for the balance sheet.

Eric Schoen: Rick also covered the successful completion of our warrant distribution during the second quarter. During the duration of the program, a total of approximately 3.8 million warrants were exercised. As a result, the company sold 5.7 million common shares at $22 per share for gross proceeds totaling $126.3 million. After offering costs, net proceeds to the company were $123.6 million. There are currently no remaining warrants outstanding. The warrant program was a really good boost for the balance sheet.

Speaker Change: We were pleased to offer our shareholders, a dividend, which gave them the choice to sell their warrants and receive cash or to exercise their warrants and increase their equity stake in the company.

Speaker Change: On the cash spend side net cash used in operations. During the six months ended June 32024 was 37 4 million.

Speaker Change: This was in line with our previous guidance.

Speaker Change: Net cash used in operations for the second half of 2024 is expected to be between 80 and $90 million.

Speaker Change: Including an estimated $40 million loss contingency related to fully resolving the SEC investigation.

Eric Schoen: We were pleased to offer our shareholders the dividend which gave them the choice to sell their warrants and receive cash or to exercise their warrants and increase their equity stake in the company. On the cash spend side, net cash used in operations during the six months and the June 30, 2024 was $37.4 million. This was in line with our previous guidance. Net cash use in operations for the second half of 2024 is expected to be between 80 and 90 million, including an estimated $40 million loss contingency related to fully resolving the SEC investigation.

Speaker Change: Considering this spending level, we believe we will end the year with between $117 million to $127 million in cash.

Speaker Change: Net income was $6 2 million in Q2 compared to a net loss of $26 4 million for the same periods in 2023.

Speaker Change: Net income resulted from a change in fair value of warrant liabilities.

Speaker Change #104: Noncash item.

Speaker Change: This warrant gain was partially offset by the estimated SEC loss contingency settlement and cost to conduct the phase III clinical program as well as other studies with similar fill out.

Eric Schoen: Considering the spending level, we believe we will end the year with between $117 to $127 million in cash. Net income was $6.2 million in Q2 compared to a net loss of $26.4 million for the same period in 2023. Net income resulted from a change in fair value of warrant liabilities, a non-cash item. This warrant gained was partially offset by the estimated SEC loss contingency settlement and cost to conduct the Phase III clinical program, as well as other studies with SimifileM.

Speaker Change #104: Research and development expenses for Q2 were $15 2 million.

Speaker Change: This compared to $25 million for the same period in 2023.

Speaker Change: R&D expenses decreased due primarily to the completion of patient screening and enrollment for our phase III clinical program in the fall of 2023.

Speaker Change: Now I'll turn it back to Rick.

Rick Barry: Thank you Eric.

Rick Barry: Okay. Operator could you. Please open the line for questions.

Speaker Change #101: At this time, we will be conducting a question and answer session for those of you on the telephone lines to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please.

Eric Schoen: Research and development expenses for Q2 were 15.2 million. This compared to 25 million for the same period in 2023. R&D expenses decreased due primarily to the completion of patient screening and enrollment for our Phase III clinical program in the fall of 2023.

Speaker Change: Star then two at this time, we will pause momentarily to assemble our roster.

Speaker Change: Yeah.

Speaker Change: Yes.

Richard Barry: Now let's turn it back to Rick. Thank you, Eric.

Operator: Okay, operator, could you please open the line for questions? At this time, we will be conducting a question and answer session. For those of you on telephone lines, to ask a question, you may press star, then one, on your touch telephone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw a question, please press star, then two. At this time, we will pause momentarily to assemble a roster.

Speaker Change: The first question is from Sumit Jones research.

Speaker Change #115: Please go ahead.

Sumit Jones: Good morning, everyone and thank you for providing all the details.

Speaker Change #101: One.

Speaker Change #115: Three questions one is.

Speaker Change #116: On the discontinuation dropout rate up about 20% to 22% could you describe us what was the key driver for that was it.

Speaker Change #106: Dose reduction discontinuation due to any controversy relating to the drug.

Speaker Change #112: Any details would be great and the second is M.

Speaker Change #106: The Adas Cog 12, I suppose was designed more.

Soumit Roy: The first question is from Roy Soumit, John's research. Please go ahead. Good morning, everyone. And thank you for providing all the details, Eric. One question, one is, on the discontinuation, the dropout rate of about 22%, would you describe us what was the key driver for that? Was it dose reduction, discontinuation due to AE or any controversy related to the drug? Any details would be great. And the second is, the ADAS COG 12, by suppose, was designed more within mild to moderate patients versus ADAS COG 14.

Speaker Change #107: Within my mild to moderate patients versus either Cork 14, now that we know.

Soumit Roy: Now that we know a good chance that mild patients would show the benefit is ADAS COG 12 still be appropriate endpoint. And if FDA gave any guidance, if only one of the co-primary hits, so what would be the regulatory fastball work? Okay, I think I've got it. Thanks, Soumit. Probably, I'm going to ask Jim, I think, to answer your question, he's probably better prepared for it. Jim? Yeah, let me see. I have the ADAS COG question.

Speaker Change #107: Good chance that mild patients would show the benefit.

Speaker Change #101: Is adas Cogs.

Speaker Change #106: Still the appropriate endpoint and you can't do you gave any guidance.

Speaker Change #125: Only one of the co primary kits what would be the regulatory path forward.

Speaker Change #107: Okay, I think I've got it.

Sumit: Thanks Sumit.

Speaker Change #106: Probably I'm going to ask Jim I think.

Speaker Change #106: To answer your questions. He is probably better prepared for it Jim.

Jim: Yeah, let me see.

Jim: It is called a question. The first question was about the dropout rates dropout rate that we've seen in both the two studies is about 20% slightly more than 20% in the longer study.

Speaker Change #101: As is common in these studies the most typical reason core and drop out is because of what I call.

Speaker Change #101: Study for key patient fatigue, they withdraw consent patients are moving someplace.

Speaker Change #106: Study.

Speaker Change #106: It's not just the patient involved in the study but also.

Speaker Change #106: Partner, a study partner and they oftentimes are just.

Speaker Change #106: Theory from coming back and forth back and forth to research center. So if you look at let's say other studies that have recently.

Soumit Roy: The first question was about the dropout rate. It's a dropout rate that we've seen in both of the two studies. It's about 20% slightly more than 20% in the longer study. As is common in these studies, the most typical reason for a dropout is because of what I call study fatigue, patient fatigue. They withdrawal consent, patients are moving someplace, study, it's not just the patient evolving study, but also a partner, a study partner, and they oftentimes are just weary from coming back and forth, back and forth through the research center.

Speaker Change #106: Then reported and approve the FTA.

Speaker Change #106: Such as out of Catamount.

Speaker Change #106: <unk> are down about again, the most common reason for drop outs is not adverse events, but withdrawal of consent.

Speaker Change #126: With regards to aid us call it 12.

Speaker Change #106: That's a good question.

Speaker Change #106: We were going to even earlier population like a mild cognitive impairment, we might use either 13 or 14, but for mild to moderate population. It is called 12 is more than adequate.

Speaker Change #128: <unk> agrees as.

Speaker Change #106: As part of our earlier discussion in a few years ago.

Soumit Roy: So, if you look at, let's say, other studies that have recently been reported and approved at FDA, such as out of catamab, or the catamab, or denatimab, again, the most common reason for dropouts is not adverse events, but withdrawal of consent. With regards to ADAS COG 12, that's a good question. If we were going to an earlier population, like a mild cognitive impairment, we might use an ADAS COG 13 or 14, but for a mild to moderate population, ADAS COG 12 is more than adequate.

Speaker Change #106: And I think there was a third question.

Speaker Change #126: Can you please repeat that.

Speaker Change #116: You had any discussions with the FDA if you hit on one of the corporate how many endpoints not.

Speaker Change #136: Cop 290 video.

Speaker Change #118: No we have not had such a discussion at this point. Thank you.

Speaker Change #127: Thank you for taking the questions.

Speaker Change #115: Thank you Sir.

Vernon Bernardino: The next question is from Vernon Bernardino H C. Wainwright. Please go ahead.

Speaker Change #106: Hi.

Speaker Change #124: Good morning, and thanks for taking my questions.

Soumit Roy: The agency agrees as part of our earlier discussion a few years, and I think there was a third question. Can you please repeat that? If you had any discussion with the FDA, if you hit only one of the co-primary and points, not both go up to 80, 80, 80. No, we've not had such a discussion at this point. Thank you. Thank you for taking the question. Thank you, Sarah.

Speaker Change #136: Rick and Jim I also walked through.

Speaker Change #138: And I welcome you to cassava look forward too.

Speaker Change #131: Your activities in helping grow the company.

Rick Barry: Have a couple of questions Rick I know you can't go into the details so as far as the FCC investigation, but.

Speaker Change #116: I do want to press, a little bit in the sense that could.

Rick Barry: Could you remind us again what the.

Speaker Change #142: She is investigating and what are the drivers of the 40 billion dollar amount.

Vernon Bernardino: The next question is from Vernon Bernardino, H.C. Wayne Wright. Please go ahead. Hi. Good morning and thanks for taking my question. Rick and Jim, I also want to welcome you to Cassava. Look forward to your activities and helping grow the company. Have a couple of questions. Rick, I know you can't go into the details as far as the SEC investigation, but I do want to press a little bit in the sense that, could you remind us again, what the SEC is investigating and what are the drivers of the $40 million amount for the estimated loss contingency that you're recording?

Speaker Change #121: Maybe the loss contingency that you're recording.

Rick Barry: Well I think I think you know the investigation began in 2021 after the citizen's petition was filed and there were all kinds of allegations raised in that.

Speaker Change #122: And that petition.

Speaker Change #132: The settlement, if we reach one will.

Speaker Change #122: All I can say is it will it will in the investigation.

Speaker Change #122: And.

Speaker Change #139: The commission seems to be most focused on the fact that the company raised money.

Speaker Change #138: Some time and I can't remember announces the fourth quarter or the beginning of 'twenty one.

Speaker Change #121: And that seems to be really what they are focused on.

Speaker Change #132: Okay terrific.

Vernon Bernardino: Well, I think you know the investigation began in 2021 after the citizens petition was filed and there were all kinds of allegations raised in that petition. The settlement, if we reach one, will, all I could say is it will end the investigation. And the commission seems to be most focused on the fact that the company raised money. Sometime, I can't remember now, it was the fourth quarter of the beginning of 21.

Jim: One question I have for you Jim Dr.

Jim: Dr.

Speaker Change #121:

Jim: It's great that you've added a biomarkers to the phase III studies.

Speaker Change #147: Regarding those biomarkers.

Speaker Change #146: Well that would be a part of question one would be the top part of the topline announcement for a rethink and.

Speaker Change #147: Some of those biomarkers going to be.

Speaker Change #151: That's not necessarily targeted but perhaps once that would answer some of the controversy that arose from the phase two results. The early phase II results that led to.

Vernon Bernardino: And that seems to be really what they're focused on. Okay, perfect. The second question I have for you. It's great that you've added a biomarkers to the phase three studies regarding those biomarkers. Well, that'd be part of question one would be the top one part of the top line announcement for a rethink. And are some of those biomarkers going to be, let's say not necessarily targeted, but perhaps once that would answer some of the controversy that arose from the phase two results, the early phase two results that led to the indictment and charges against a former advisor.

Speaker Change #121: Hum.

Speaker Change #121: And thats been the charges.

Speaker Change #121: Against a former advisor.

Speaker Change #121: As you know there's controversy about those results.

Speaker Change #121: I don't want to get into the assortment itself, but with these biomarkers.

Speaker Change #122: It seems like there'd be an opportunity for.

Speaker Change #122: The phase III results to answer any lingering questions as far as.

Speaker Change #122: Not necessarily duplicating those results, but perhaps.

Speaker Change #122: Confirming the directionality of those Biomarkers.

Speaker Change #122: Okay.

Speaker Change #122: Yeah.

Speaker Change #122: Rick you want to take that question.

Rick Barry: Sorry, I forgot I'll, let you handle that one Jim.

Jim: Okay. Thanks, Rick.

Speaker Change #146: That's a really good set of questions. Thank you so much.

Vernon Bernardino: As you know, there's controversy about those results. I don't want to get into the indictment itself, but with the biomarkers, it seems like there'd be an opportunity for the phase three results to answer any lingering questions as far as not necessarily duplicating those results, but perhaps confirming the directionality of those biomarkers. Rick, you want to take that question? Sorry, I was going to let you handle it on June. Okay, thanks Rick.

Rick Barry: In our phase III study.

Rick Barry: Have a number of biomarkers.

Speaker Change #136: And plasma in particular, we were hoping like you cannot absolutely promise, but we are hoping that our <unk>.

Speaker Change #136: Plasma biomarker assessment and patients from rethink will be available in at the end of the year, but at the same time, we have cognitive data to present publicly that is our hope and.

Speaker Change #122: We're working to that end.

Speaker Change #122: The types of Biomarkers, we're going to be looking at in phase III, We will look at some of the basic.

Speaker Change #122: Abnormalities of of cell function in patients who have all timers disease.

Vernon Bernardino: That's a really good set of questions. Thank you so much. In our phase three study, we have a number of biomarkers. There's in plasma, in particular, we're hoping, you cannot absolutely promise, but we are hoping that our plasma biomarker assessment in patients from we think will be available in at the end of the year. At the same time, we have cognitive data to present publicly. That is our hope, and we're working to that end.

Speaker Change #122: The.

Speaker Change #122: Plus correlation of Tau inflammatory changes that have been seen.

Speaker Change #122: And degeneration of excellence for example in patients with Alzheimer's disease. This is the type of Biomarkers that can be looked at in the plasma.

Speaker Change #122: Accurately with great precision.

Speaker Change #122: And they.

Speaker Change #122: They are the common ones that are being examined by most of the companies who are doing this type of work.

Vernon Bernardino: The types of biomarkers that we're going to be looking at in case three will look at some of the basic abnormalities of cell function in patients who have Alzheimer's disease. The phosphorylation of tau, the inflammatory changes that have been seen, the generation of axons, for example, in patients with Alzheimer's disease. These types of biomarkers that can be looked at in the plasma, very accurately in a great precision, and they are the common ones that are being examined by most of the companies who are doing this type of work.

Speaker Change #122: They are also biomarkers that we can do in CSF, but that's part of the new focus study and that we won't have those until sometime in the second half of next year.

Speaker Change #122: But yes to your question, we are hoping to have some biomarker data available later on this year.

Speaker Change #122: These numbers. These biomarkers, we're collecting them at various time points in a 52 week.

Speaker Change #122: We think study.

Speaker Change #136: The data that was.

Speaker Change #147: You raised from phase II much of it.

Speaker Change #135: She is F N b.

Professor Wounds: Professor wounds.

Professor Wounds: Was.

Vernon Bernardino: There are also biomarkers that we can do in CSS, but that's part of the refocus study, and that we won't have those until sometime in the second half of next year, in all likelihood. But yes, so your question, we're hoping to have some biomarker data available later on this year. These biomarkers, we're collecting them at various time points in a 52 week rethink study. The data that was that you raised from phase two, much of it, from CSF done in the Professor Wong's lab, was in a 28 day study.

Speaker Change #158: And a 28 day study and one of the things that we did a number of years ago, which has an independent laboratory <unk> and I want to remind users when terex did a.

Professor Wounds: Assessment of a biomarker called <unk> 181, which was invoked then.

Professor Wounds: In mid shirt and did show a significant statistically significant changes in a small number of subjects in each of the treatment group. So this is a double blind study.

Professor Wounds: Looking at placebo versus two doses of drug and the data was in fact.

Speaker Change #156: And I just wanted to remind you that.

Professor Wounds: And we're hoping to normally replicate that type of.

Professor Wounds: Benefits, but also extend and augment it with a longer study using perhaps more.

Vernon Bernardino: And one of the things that we did a number of years ago was have a independent laboratory, corned terrox, and what I remind you of this. Corned terrox did a assessment of a biomarker called PETA181, which was invoked them, and did show a significant certificate certificate change. There's a small number of subjects in each of the treatment groups. This is a double-blind study looking at procedure versus two doses of drug and the data was in fact significant.

Speaker Change #136: More contemporary blood based Biomarkers that are now available so hopefully that will answer your question.

Speaker Change #155: No that's fantastic and I asked those questions because I don't know if everybody remembers I'm sure you are very well.

Speaker Change #155: Familiar with the data a lot of the results happened very quickly within those 28 days.

Speaker Change #160: That is part of the strength of the alignment that youll see the effects right away.

Vernon Bernardino: And I just want to remind you about it, and we're hoping to not only replicate that type of benefit, but also expand and augment it with a longer study and using perhaps more contemporary blood based biomarkers that are now available. So hopefully that will answer your question. No, that's fantastic, and I ask those questions because I don't know if everybody remembers. I'm sure you are very familiar with the data. A lot of the results happen very quickly within those 28 days, and that is part of the strength of the MFLAM and that you see the effects right away.

Speaker Change #153: A follow up too.

Speaker Change #139: It's always a question.

Speaker Change #140: Regarding Adas Cog 12.

Speaker Change #140:

Speaker Change #159: I was wondering if you could go a little bit into.

Speaker Change #140: Obviously it.

Speaker Change #158: It would be great to get these patients on treatment muscle I'm as early as possible.

Speaker Change #140: With the statistical plan of these phase III studies.

Speaker Change #140: I was wondering if you think of.

Speaker Change #168: Describe a little bit.

Speaker Change #140: <unk>.

Speaker Change #140: Perhaps at least characterize your statistical plan and.

Speaker Change #140: The targeting of what kind of patients.

Vernon Bernardino: As a follow-up to Smith-Royza question, regarding ASCOG 12, I was wondering if you could go a little bit into, you know, obviously it'd be great to get these patients on treatment with MFLAM as early as possible. But with the statistical plan of these facial studies, I was wondering if you describe a little bit if not perhaps at least characterize your statistical plan and the targeting of what kind of patients you will be announcing, at least on the top line of level for rethink and maybe even refocus.

Speaker Change #140: You will be announcing at least on the top line level for a rethink.

Speaker Change #140: And maybe even be spoken.

Speaker Change #140: Mhm.

Speaker Change #143: So the analysis.

Speaker Change #163: These types of studies you have to do what's called a modified intent to treat analysis.

Speaker Change #143: Which means.

Speaker Change #140: Include everybody in the analysis, who has.

Speaker Change #140: Taken at least one dose of drug and has had at least one follow up visit in order to determine whether or not.

Speaker Change #140: Cognition or function has changed.

Speaker Change #140: For example, if somebody takes the bottle of pills.

Speaker Change #140: Just disappear they lost a follow up they would not be included but otherwise everybody else be they either have a mild dementia or moderate dementia will be included in that analysis and that is our primary analysis that is what the FDA expects there will be certainly sub group analyses that we will do.

Vernon Bernardino: So the analysis. You have to do what's called a modified intent to treat analysis, which means you include everybody in the analysis who has taken at least one dose of drug and has had at least one follow-up visit in order to determine whether or not cognition or function has changed. For example, if somebody takes the bottle of pills and then they just disappear, they're lost to follow-up, they would not be included.

Speaker Change #140: They are not the primary analysis, though secondary analysis will look at patients who have sort of different types of debenture mild dementia and Margaret dementia.

Speaker Change #140: Patients who have this variable indexed variable there's quite a number of sub group analysis.

Speaker Change #165: I suspect that the time that we.

Speaker Change #165: Have the public disclosure later this year, we'll have most of that data and we will provide as much as we can.

Vernon Bernardino: But otherwise, everybody else, be they either having mild dementia or moderate dementia, will be included in that analysis. That is our primary analysis. That is what the FDA expects. There will be certainly subgroup analyses that we will do. They're not the primary analysis though. The secondary analysis will look at patients who have different types of dementia, mild dementia, moderate dementia, patients who have this variable or that variable. There's quite a number of subgroup analyses.

Speaker Change #140: And.

Speaker Change #140: That's my promise to you.

Speaker Change #160: Thank you for providing that insight and taking my questions I look forward to the data I'll get back into queue. Thank you.

Brian: Thanks, Brian.

Speaker Change #160: The next question is from Peter.

Peter Rodman: Rodman and Renshaw. Please go ahead.

Peter Rodman: Yes, good morning, maybe a little bit of a follow up to Dr. <unk>.

Vernon Bernardino: I suspect at the time that we have the public disclosure later this year, we'll have most of that data. And we'll provide as much as we can. And that's my promise to you. Thank you for your providing that insight and taking my questions. I look forward to the data. I'll get back in the queue. Thank you. Thanks, Vernon.

Peter Rodman: What I'd like to understand is is.

Speaker Change #158: The statistical analysis plan of the co primary endpoints and data has been locked down and agreed that.

Speaker Change #175: And if you could provide just some details about.

Speaker Change #175: <unk>.

Speaker Change #153: How the analysis is going to be performed on the two primary endpoints.

Speaker Change #177: Jim Muehlbauer.

Vernon Bernardino: The next question is from LMRP Roch, Rodman and Ren Shaw. Please go ahead. Yes, good morning. Maybe a little bit of follow-up to Dr. Kruppier. What I'd like to understand is the statistical analysis plan of the co-prime REM points. And that has been blocked down and agreed that the FDA, and if you could provide just some details about how the analysis is going to be performed on the two primary end points.

Speaker Change #153: Okay.

Speaker Change #160: I guess so.

Speaker Change #156: So the statistical analytical plan has been.

Speaker Change #153: <unk> written in conjunction with.

Speaker Change #160: Statisticians at both Premier.

Speaker Change #173: And lunching the safety data.

Speaker Change #160: Dr. Hinrich start to Mallinckrodt Terror Corporation, they will be analyzing our dataset for efficacy.

Speaker Change #160: To your question they will be doing a modeling approach to our patients.

Speaker Change #160: Which is very typical is a very sophisticated approach as opposed to what we call simple statistics.

Speaker Change #160: And they'll be doing that analysis.

Vernon Bernardino: I guess so. So the statistical analytical plan has been written in conjunction with statisticians at both premier who will be analyzing the safety data. And Dr. Hendricks, Dr. Malin caught a terror cooperation. They will be analyzing our data set for efficacy. They to your question, they will be doing a modeling approach to our patients, which is very typical, so very sophisticated approach. It's supposed what we call simple statistics. And they'll be doing that analysis.

Speaker Change #160: They have we have written a statistical analytical plan.

Speaker Change #160: <unk> done with the physical political plan.

Speaker Change #160: Internally.

Speaker Change #160: It is now is sitting at the FDA, we are waiting for their commentary on it but assuming that they approve.

Speaker Change #160: We'll basically mark it down and sign off on it will be done but clearly.

Speaker Change #160: The essence of your question as it needs to be completely done.

Speaker Change #160: So that the analysis pre specified before we even get close to the data lock date.

Speaker Change #170: Don't know if that's what you were looking for but hopefully I answered your.

Speaker Change #193: Yes, yes.

Speaker Change #162: Maybe just one additional follow.

Vernon Bernardino: They have, we have written the statistical analytical plan. We are done with the statistical analytical plan internally. It is now is sitting at the FDA waiting for the commentary on it, assuming that they approve. Then we will basically lock it down and sign off on it and we'll be done. But clearly into the essence of your questions, it needs to be completely done so that the analysis is pre-specified before we even get close to the data lock.

Speaker Change #175: Follow up to that is that both of these primary endpoints would have to meet at the level of P.

Vernon Bernardino: I don't know if that's what you were looking for but I hope you answered your question. Yes, yes, maybe just one additional follow-up to that is that both of these primary and points would have to meet at the level of P less than 0.5. Is that correct for it to be successful? That is correct, that is correct. And maybe just to bring in Chris if he could how did you arrive to the figure of a potential settlement of $40 million was that based on some precedence?

Speaker Change #164: <unk> zero point in time is that correct for it to be successful.

Speaker Change #182: That is correct that is correct.

Speaker Change #182: Okay.

Speaker Change #164: And maybe just.

Speaker Change #162: Bring in Chris if we could.

Speaker Change #194: How do you how did you arrive to the figure of a potential settlement of $40 million what is that based on some precedence.

Speaker Change #194: How did that come about.

Speaker Change #162:

Speaker Change #153: I.

Speaker Change #185: Hate the question, but.

Speaker Change #188: We've said everything we can about our ongoing discussions with the SEC and we have reserved $40 million, but.

Speaker Change #153: But as we indicated we're still in discussions with the SEC and it really wouldn't be appropriate to give a little more detail.

Speaker Change #171: Okay. Thank you and maybe one last question to Rick.

Speaker Change #189: You alluded to that there was a demand.

Speaker Change #172: Could you expand the.

Rick Barry: Expanded access program to be on the wrong year.

Vernon Bernardino: How did that figure come about as an estimate? I appreciate the question but we've said everything we can about our ongoing discussions with the SEC and we have reserved $40 million but as we indicated we're still in discussions with the SEC and it really wouldn't be appropriate to get into more details. Thank you. And maybe one last question to Rick, you alluded to that there was a demand to expand the expanded access program to be on the one here.

Speaker Change #190: What precipitated that more.

Speaker Change #159: More like the nixons demand or patients right family demand that you observed.

Speaker Change #183: Could provide a little bit of color there.

Speaker Change #199: I think the honest answer is it was a lot of things. So we heard from the sites that patients were going off and they wanted to stay on the drug.

Speaker Change #159: We heard that loud and clear through the clinical team.

Speaker Change #159: I got to tell you.

Speaker Change #159: I have received.

Speaker Change #159: Quite a few emails from the patient community generally from loved ones have patients who are on the drug or on that we're on the trial are now on the extension trial.

Vernon Bernardino: What precipitated that was it more like clinicians demand or patients less family demand that you observed if you could provide a little bit of color. I think the honest answer is it was a lot of things so we heard from the sites that patients were going off and they wanted to stay on the drug. We heard that loud and clear for the clinical team and I have to tell you I have received quite a few emails from the patient community generally from loved ones of patients who are on the drug or that we're on the trial are now on the extension trial.

Speaker Change #191: They werent begging to continue but they very clearly wanted to continue they understood the constraints of us being a small company and this being very costly.

Speaker Change #159: So it was.

Vernon Bernardino: They weren't begging to continue but they very clearly wanted to continue they understood the constraints of us being a small company and this being very costly. So it was a lot of things that led to it but like I said it was an easy decision. It's just the right thing to do for patients and to me it struck me as cool to have somebody on a drug for that long and they think that they're getting a benefit from it and you know we're taking them off so it's driven by a lot of factors.

Speaker Change #159: It was a lot of things that led to it but like I said it was an easy decision.

Speaker Change #159: It's just the right thing to do for patients.

Speaker Change #166: To me it struck me as.

Speaker Change #179: True to have somebody on.

Speaker Change #179: A drug for that long and they think that they're getting a benefit from it.

Speaker Change #179: We're taking them off.

Speaker Change #159: It's driven by a lot of factors.

Speaker Change #159: Yeah.

Speaker Change #159: And Rick I can imagine that.

Rick Barry: <unk> received quite a bit of an interest I mean this is one of the only handful of pivotal.

Rick Barry: Programs ongoing in Alzheimer's.

Speaker Change #159: From potential partners.

Speaker Change #194: Can you describe some of the dynamics there was in the past and what would be our anticipation once data is available.

Speaker Change #159: Hi.

Speaker Change #198: Yes, I don't think I want to go too far into it but the.

Speaker Change #159:

Speaker Change #204: Realistically I.

Speaker Change #159: I would not expect us to see.

Vernon Bernardino: Yeah and Rick I can imagine that you received quite a bit of an interest. I mean this is one of the only handful of pivotal programs ongoing in Alzheimer's from potential partners. Can you describe some of the dynamics of those in the past and what would be our anticipation once data is available? Yeah I don't think I want to go too far into it but realistically I would not expect us to see I wouldn't expect to see a partnership before we have faced three data.

Speaker Change #159: I wouldn't expect to see a partnership.

Speaker Change #159: Before we have phase III data.

Speaker Change #159: You think about it from the other side. If this is a big pharma company.

Speaker Change #199: Some business development officer, who would have to take the risk of backing into the Ceo's office, and saying, Hey, I want to make a bet on this company, we don't have data yet.

Speaker Change #159: Most of the deals you see with Big Pharma. These days are very expensive and they are expensive because they're risk averse and they wait until there is a phase III result, or theres, an FDA approval.

Speaker Change #159: So it's.

Speaker Change #159: I guess, the best I can say stay tuned.

Speaker Change #159: Okay.

Speaker Change #159: Thank you so much for us thank you.

Matthew <unk>: The next question is from Matthew <unk>, a private investor. Please go ahead.

Vernon Bernardino: And if you think about it from the other side if this is a big farmer company you know some business development officer would have to take the risk of blocking it with CDO's office and saying hey I want to make a bet on this company we don't have data yet. Most of the deals you see with big farmers these days are very expensive and they're expensive because they're diverse and they wait until there's a phase three result or there's an FDA approval. So I guess the best I could say is stay tuned. Okay. Secretary Willem. Thank you so much for asking me. Thank you.

Speaker Change #200: Hello, first off that was a great update.

Speaker Change #159: It's nice to have Jim talking about some of the details on the trials.

Matthew <unk>: And I wanted to thank you personally for focusing on the patients and extending the open labels I think that was a great decision and made a lot of families.

Speaker Change #200: Much much more common and happy.

Speaker Change #203: And I'd like to congratulate the entire team it's been quite a journey of the last three years, but that you guys did an incredible job getting Smith to the doorstep of a completed phase III trial.

Matt Mechtrub: Next question is from Matt Mechtrub, a private investor. Please go ahead. Hello. First off, that was a great update. It's nice to have Jim talking about some of the details on the trials. I wanted to thank you personally for focusing on the patients and extending the open labels. I think that was a great decision and made a lot of families much more calm and happy. I'd like to congratulate the entire team. It's been quite a journey the last three years, but you guys did an incredible job getting Smithlam to the doorstep of a completed phase three trial.

Speaker Change #194: I have two related questions. So some estimates say there was about 46 million patients worldwide with all farmers $6 5 million in the U S and $11 million in Europe.

Speaker Change #190: Have you guys analyzed the worldwide demand for some F alarm if theres a successful phase III readout and FDA approval and can you give any additional color on what steps you're taking to ensure Smith one could be delivered to patients quickly after the FDA approval and scale worldwide.

Speaker Change #190: Yes.

Speaker Change #183: It's very timely question so were.

Speaker Change #206: We don't have a chief commercial officer here for a small company as you know.

Richard Barry: I have two related questions. Some estimates say there's about 46 million patients worldwide with Alzheimer's, 6.5 million in the US, then 11 million in Europe. Have you guys analyzed the worldwide demand for Smithlam if there's a successful phase three read out an FDA approval? Can you give any additional color on what steps you're taking to ensure Smithlam can be delivered to patients quickly after the FDA approval and scale worldwide? Yeah, the very timely question.

Speaker Change #206: But.

Speaker Change #183: We're interviewing several different firms too.

Speaker Change #183: Due to the commercial plan for us.

Speaker Change #183: In fact, if two or three calls I think scheduled today on that very topic. So.

Speaker Change #183: <unk>.

Speaker Change #183: It's.

Speaker Change #183: That's going to be the best way for us to do it and then at that point, we'll decide do we need to have a chief commercial officer and build a commercial team here or not but that will take a look at.

Speaker Change #183: Whereas the demand.

Speaker Change #199: It depends on the label obviously.

Speaker Change #183: And as far as preparing for it I mean, the first thing we have to do and I made reference to it in my remarks.

Richard Barry: We don't have a chief commercial officer here. We're a small company, as you know, but we're interviewing several different firms to do the commercial plan for us. In fact, it's two or three goals. I think schedule today on that very topic. That's going to be the best way for us to do it, and then at that point we'll decide do we need to have a chief commercial officer and build a commercial team here or not, but that will take a look at where the demand depends on the label, obviously.

Speaker Change #183: As we have to beef up the API or active pharmaceutical ingredients and we've done that.

Speaker Change #183: We're also looking at we have a manufacturer right now.

Speaker Change #183: It is making.

Speaker Change #183: Making an adequate number of tablets.

Speaker Change #183: But for the demand that we're internally forecasting it is not enough. So we're looking at other sources for that manufacturing.

Speaker Change #202: Okay. So you mean like a new company that can scale up.

Speaker Change #183: Successfully to a worldwide scale.

Richard Barry: As far as preparing for it, I mean, the first thing we have to do, and I made reference to it in my remarks, is we have to beef up the API, or the act of pharmaceutical ingredient, and we've done that. We're also looking at, we have a manufacturer right now that is making an adequate number of tablets, but for the demand that we're internally forecasting, it's not enough, so we're looking at other sources for that manufacturing.

Speaker Change #192: Yeah or another plant within the same company.

Speaker Change #192: Have greater capacity, but yes.

Speaker Change #192: A second source in the second source might have to be a lot larger.

Speaker Change #192: Okay. That's all I had.

Matt: Okay. Thank you Matt.

Speaker Change #192: Thank you.

Speaker Change #192: So I think that was our last question.

Speaker Change #212: I just wanted to say, we really appreciate you joining us today.

Richard Barry: Okay, so you mean a new company that can scale up successfully to a worldwide scale. Yeah, or you know, another plan within the same company that would have greater capacity, but yeah, a second source, and the second source might have to be a lot larger. Okay, that's all I have. Okay, thank you, man. Thank you.

Speaker Change #192: And I want everybody to remember our.

Speaker Change #202: Our goal is to bring the best in class Alzheimer's patients that's why we're here.

Speaker Change #202: Thanks for listening have a good day.

Speaker Change #211: This does now conclude today's conference teleconference. You may now disconnect. Your lines at this time. Thank you for your participation.

Richard Barry: So I think that was our last question. I just want to say, we really appreciate you joining us today, and I want everybody to remember, our goal is to bring the besting classroom Alzheimer's patients. That's why we're here. Thanks for listening. Have a good day.

Operator: This does now conclude today's conference, teleconference, you may now disconnect your lines at the time. Thank you for your part.