Cognition Therapeutics, Inc. (CGTX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Cognition Therapeutics Sequel Study Clinical Update Conference Call and Webcast. My name is Sarah, and I will be your conference operator today. This call is being recorded. I would like to turn the presentation over now to your host for today's call -- sorry, Mr. Daniel Kontoh-Boateng, Investor Relations for Cognition Therapeutics. Please proceed, Mr. Kontoh-Boateng.

Good morning, and thank you for participating in Cognition Therapeutics conference call and webcast today. With me today are Lisa Ricciardi, President and Chief Executive Officer of Cognition; Anthony Caggiano, Chief Medical Officer and Head of R&D of Cognition and Willem de Haan, neurologist and senior researcher of Amsterdam University Medical Center. A press release of the company's Phase II SEQUEL study results is available in the Investors section of the company's investor website. In addition, this conference call is being webcast through the company's website and will be archived for 90 days. Please note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that during this call, management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in cognitions press releases and SEC filings, including its annual report on Form 10-K and previous filings. This conference call contains time-sensitive information that is accurate only as of this date of the live broadcast. Cognition undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I would now like to hand the call over to Lisa Ricciardi. Lisa?

Thank you, Daniel. Good morning, everyone. Thank you for joining our discussion on the positive and compelling top-line results from our SEQUEL study in patients with mild to moderate disease. Against the backdrop of Alzheimer's and brain awareness month, we are pleased to report out the findings of this trial. Please see our forward-looking statement as we begin our discussion. With generous funding from the NIA, Cognition colleagues and advisers designed this exploratory study to further understand the potential of CT1812 to protect synaptic function as measured by brain wave activity in EEG patterns. In this trial, we met our primary endpoint of confirming safety and tolerability and showed strong positive trends in our primary EEG endpoints. In total, we believe the data support the role of CT1812 in normalizing synaptic function. CT1812 targets sigma-2 receptors, protecting neurons from toxic amyloid beta oligomers that disrupt signals between cells and ultimately lead to cell death. By protecting and maintaining neurons and their synapsis, we hypothesized that the neuroprotective effect of CT1812 would be detectable through meaningful changes in quantitative EEG patterns, and the data support this hypothesis. Our trial used a novel approach to incorporate quantitative EEG measuring multiple parameters with an emphasis on satawaves, a type of brain activity associated with processing information and memory formation. In addition, improvements we're seeing in brain connectivity during the CT1812 treatment period. Chief Medical Officer and Head of R&D, Dr. Tony Caggiano, will now take you through our top-line results. Tony?

Thanks, Lisa. So as most of you know, current belief in the field is that the 8 beta oligomers are the most toxic species of amyloid beta and bind to synapsis, and disrupt normal activity. We believe that our drug CT1812, which is the ligand for the sigma-2 receptor, interacts with the oligomer receptor, displaces A beta oligomers, and thereby protects neurons from their toxicities. In this study, we are testing the hypothesis that displacement of those oligomers could have a relatively rapid effect on synapse activity, which could be measured by quantitative EEG. So this study, which was conducted at a single site in Amsterdam, is a 16-patient study, double-blind, placebo-controlled in a crossover design or individuals with mild to moderate Alzheimer's disease as confirmed by positive CSF amyloid beta screening and a score of MMSE between 18 and 26 were enrolled and were treated with either CT1812 or placebo for 4 weeks. Before and after this treatment period, we assessed their EEGs. There has been a washout period, and each subject then crossed to the other treatment and received either placebo or CT1812 for another 4 weeks. And again, their EEGs were assessed before and during those treatment periods. So this study was run under the guidance of our principal investigator, Yord Fiberberg, again, at Amsterdam UMC, and then with the guidance of neurophysiologists and neurologist Willem de Haan, who we have here to answer questions should they come up. Going into a little more detail around the study design. Again, we had 16 individuals with mild to moderate Alzheimer's disease. The primary objective of this study, as Lisa had mentioned, was to demonstrate consistent safety and tolerability, pharmacokinetics of CT 1812 throughout the treatment period. Also as a primary objective, we're looking at whether CT1812 could alter EEG patterns, primarily the global relative data power, global alpha AEC, global relative Alpha Power, and then there were several other secondary measures behind that. Exploratory measures, which were collected or cognitive measures, including ADAS-Cog14, the CGIC, in the activities of daily living. We also collected cerebrospinal fluid and plasma for biomarkers. The biomarker data are still pending and will be reported out at a future time. So going through the data very quickly. First, we'll go through the disposition of the patients, the safety and tolerability data, and then the top-line EEG data. So we screened 34 individuals. 16 were randomized as planned. 15 individuals completed the study. We had no discontinuations due to adverse events. One subject did discontinue because of a death in this individual's family, and they chose not to continue in the study. One individual did not attend one of their EEG visits. So in the end, we have 14 individuals with data in the placebo period, and we have 16 individuals with data during the CT1812 treatment period. Looking at the demographics of the individuals who participated in the study. The mean age was 66.5 years. We had an even split of male and female patients. They're all white non-Hispanic. We see here the entering cognitive function with MMSE of '21, the ADAS-Cog is 30, and activities of daily living of 52.6%. When looking at the distribution of APOE, we saw that about 1/3 did not express APOE4, approximately 1/3 were heterozygous, and approximately 4 were homozygous within APOE4. Most of our patients were approximately 1 year or 1.14 years from the time of diagnosis. So these characteristics are similar to what we have seen in our previous studies. Taking a look at the safety and tolerability data. So as we've seen in previous studies, CT1812 was generally well tolerated and safe. All of our AEs in this study were mild or moderate. There were no severe AEs, there were no serious SAEs, and no AEs led to adapt or discontinuation. When we look at more detail at the treatment-emerging AEs, there are 11 participants who had treatment-emergent AEs in the CT1812 period, and 6 participants at treatment-emergent AEs during their placebo treatment period. We had 6 treatment-emergent AEs, which were categorized as related to the study drug, and those were evenly split between people receiving CT1812 and receiving a placebo. The most common AEs that we saw, again, consistent with previous studies, were GI-related, specifically nausea, diarrhea, and then, as is typical in patients of this age, there are injuries, such as falls and then procedural complications, which largely in this study meant headaches following lumbar punctures. Again, consistent with previous studies, we had one individual who had mild elevated liver enzymes with no further complications. So taking a little bit of a deeper look here at the EEG. So we now have several ways of looking at biomarkers in Alzheimer's disease, right? We can look at amyloid burden PIB-PET. We can measure amyloid and other economical biomarkers in CRM and seedless biofluids. We have anatomical measures such as volume, and we have ways to assess cognition with tools such as the ADAS-Cog. Here, quantitative EEG is really a biomarker for us to look at the active neurophysiology of the brain. Here, we're looking at global activities, we're looking at regional activity, and also we're able to look at the connectivity of brain regions in real-time. So what we're showing here is an example of what the EEG patterns look like. So the EEG is simply a measure of the difference of electrical potential between 2 different leads that are placed on the scalp. Fast waves like the alpha and beta waves are typically dominant in healthy individuals and indicative of awake and alert states. Individuals with dementia, particularly Alzheimer's disease, have a greater preponderance for the slower ways, particularly Sata and Delta wave. And here, throughout the rest of the presentation, you'll see the phrase relative power. And what that means is the portion of the total EEG, which is made up of that particular band, either data or alpha or beta. So as we mentioned, we met the primary outcome of demonstrating consistent safety and tolerability, and now we'll turn to the EEG data. So as we mentioned before, we're looking at several measures of EEG, and these were analyzed in a ranked and ordered manner. First was the global relative data power. After that was the global alpha AEC, then the global relative to Alpha Power. And then as we mentioned before, there are many other secondary outcomes and exploratory outcomes, which will be discussed in the future. So turning now to the data, which we're showing on the screen now. On the left side, what you can see is the change in global relative data power. So what you'll observe here is that, as a reminder, the increased data power is typical of worsening disease in Alzheimer's disease. And what you'll see here, shown in green, is that during the treatment period when folks are on CT1812, there is a decrease or a normalization in their relative data power in contrast to the general increase that you see in placebo. Now this difference was not significant. The p-value was 0.123, but this is a strong trend, and Willem can give us more detail on this as we go forward. Also, what we observed was a nominally significant increase in the global alpha AEC or the connectivity, meaning how the different regions of the brain were acting in synchrony. So what you'll see here is that, in general, in the disease state, there is a reduction in the alpha AEC, whereas here, during the CT1812 period, there is an increase in the Alpha AEC power. In contrast, in the individuals who are taking placebo, there is a decrease in that alpha AEC power. And then finally, when we look at the global relative alpha power, again, in the disease state, you tend to see a decrease in the relative alpha power. And here in this study, what you'll see is individuals taking CT1812 had an increase in alpha power or a normalization of that signal in contrast to these same individuals who have a continued decrease during their placebo period. So we'll take a little bit deeper look into each of these measures. Again, remembering that the global relative data power was our first outcome measure and that data is shown here. And we showed a nice trend for reduction in data power, which would be in a treatment direction. The data power -- the global data power, is made up of several different regions. And here, we're showing all the regions that comprise the global data power. So the frontal, the temporal, the posterior, and the central. And what you see is that throughout the brain is the same consistent trend for a reduction in global relative data power and our relative data power in each region when individuals are receiving CT1812 in contrast to a general increase during the same time while they are receiving placebo. In the central region, this difference was nominally significant. As we look at the Global Alpha AEC, again, this is a measure of connectivity. So this outcome looked at the synchrony of the deep and troughs of the EEG patterns between 2 different regions of the brain. And it suggests the ability of the brain to communicate and exchange information efficiently. Again, in individuals with Alzheimer's disease, this connectivity measure tends to decrease. And what you can see here is that in individuals in this study, an increase in the global alpha AEC while on CT1812 in comparison to a general decrease while on placebo. These findings are both directionally and nominally significant. And then finally, looking at the global relative alpha power, again, the alpha power tends to decrease in individuals with Alzheimer's disease. And alpha power is thought to be a general background rhythm of the healthy brain. And what you can see here in this data is that in individuals in this study, there was an increase in global relative alpha power during their CT1812 treatment period in comparison with during their placebo period, where there was a general decrease in global relative alpha power. Again, this finding was not significant, with a p-value of 0.149. However, directionally favorable. So in conclusion, what we're able to show in the SEQUEL study was that CT1812 was safe and well tolerated and then the safety and tolerability findings were consistent with our previous studies. We have strong trends on our prespecified quantitative EEG measures. All of the EEG measures were consistent and directionally favorable. Finally, we'd like to point out that CT1812 -- this data really demonstrates that CT1812 has an impact on brain activity in these individuals with mild to moderate Alzheimer's disease. So obviously, we've completed several other studies up to this point. And in summary, these studies have demonstrated target engagement. This was demonstrated in our SMAP study, which we recently published. We have anatomical effects of CT1812 and volume load reduction of brain volume, which was down in our SPARK study. We have preliminary data on improved cognitive function from the first part of our SHINE study. And finally, now we have trends for improved neurophysiology in the SEQUEL study. We've shown in all of our studies supported biomarker evidence that we can impact Alzheimer's disease biology. And then finally, we'll point out that we have 3 ongoing fully funded proof-of-concept studies, one in early Alzheimer's disease, one in mild to modern Alzheimer's disease, and one in dementia with [indiscernible]. These studies, we plan to complete enrollment for the SHINE study and for the SHIMMER study towards the end of this year and then be able to read out data towards the middle of next year. At this point, I'll pass it on to Lisa.

Great. Thank you, Tony. Operator, over to you for questions.

[Operator Instructions]. Your first question comes from the line of Charles Duncan with Cantor Fitzgerald.

This is Elian on for Charles Duncan at Cantor Fitzgerald. Congratulations on the data. Just wanted to ask, in consideration of the normalization of the data wave and the AEC analysis showing greater connectivity of the brain regions, have you seen a correlation with the CSF plasma biomarkers that suggest the removal of the beta oligomers?

So the plasma and the CSF biomarkers are still pending. They're being processed right now and will be read out in the near future.

Your next question comes from the line of Mayank Mamtani with B. Riley Securities.

And very interesting data. So I was just curious in terms of protocol, were the researchers blinded to sort of how the EEG information was collected throughout the protocol? And then I have a quick follow-up.

Yes. So this was a double-blind placebo-controlled trial, and you see in the crossover design, the subjects and the investigators and us obviously had no idea whether they were receiving active or placebo. So obviously, the investigators knew they were collecting EEG, and they knew the subjects were in the study, but they did not know which period the participants were in.

Understood. And then in terms of the -- you've got a number of different ways, and I understand the focus is on the data maybe, and the understanding on cross connectivity. Could you just talk about sort of your observations on the overall additional waves that you looked at? And how should we think about as you prepare to present on some of the additional CSF biomarkers, the correlation to kind of exist? And if you could clarify what medical conferences you may target in the fall for full data disclosures, that would be helpful.

Sure. Why don't we start with the second question? Obviously, we don't know yet what meeting this will be disclosed at. We'll be applying and submitting abstracts now, and we'll make an announcement about what's accepted. And maybe we can ask Willem to comment briefly on what additional measures and data we might be able to examine in this robust data set.

Yes. Thanks, Tony, and thanks for the question. So yes, as Tony pointed out, I think the -- what we see so far, the effects seem to be quite consistent. So it's more fast activity and less slowing, and there seems to be a better functional connectivity. And yes, these are the main things that we would be interested in. And I think it's important to emphasize that we see this now in a relatively short time span of 4 weeks. And yes, that is something we have not really seen before. But yes, besides this, we can look at a large list of exploratory outcomes where we have, for example, the AEC or the connectivity measure. We can also look at that in a regional session. So see how this differs between regions. That's something I would expect, actually. And there are other also export variables not mentioned now that we will have looked to also have a better understanding of what we see here, for example, why the central fit is showing this strong difference that will be subject to further exploration.

[Operator Instructions] Your next question comes from the line of Jay Olson with Oppenheimer.

Congrats on these results. Can you talk about the correlation of quantitative EEG clinical outcomes and the predictability of clinical outcomes? Would quantity EEG be considered reasonably predictive of clinical benefits that could be used for accelerated approval? And then I had a couple of other follow-up questions.

Yes. So I don't know necessarily whether it could be used for accelerated approval. Certainly, if we continue to collect data and strong, we could address that in the future with the FDA. Maybe again, we can ask Willem to comment. His group has done a lot of work looking at how EEGs are growing with the advancement of the disease. Willem, do you want to comment on that?

Yes. Yes. Sure. if I may. So I think by now, if you look at the EEG literature, you can say that these measures, especially the robust -- relatively robust [indiscernible], they show a clear correlation with cognitive performance during the disease course. So we see a deterioration in cognition and relevant domains like episodic memory and executive function with these quantitative measures. There is less data on how they behave as treatment monitoring. But now with these new results and also with some other recent trials, we do see correlations, but this is also something that we have to investigate more, looking at the neuropsychological results for this study as well.

Okay. Great. And then can you talk about whether it's more important to look at the change in alpha wave in the global rain? Or is it more important in certain reasons of the brand? And also if you could talk about how you plan to leverage these findings in your other studies. For example, are there any implications for quantitative AG and Lilybody dimensions?

Yes. So there are -- what we -- in general, what I could say is that what we expect is that the posterior part of the brain, so the prior occipital region, and in the bar diagram here labeled as posterior, that is where we see most of the pathological slowing. You can see it in other regions, but the dominant changes are in the back. So those regions have our special interest. And yes, that's also because this alpha rhythm, what Tony talked about earlier, the healthy rhythm that adults have, that is slowing that. And it's also found me in the posterior part. So yes, further regional analysis will be interesting. Yes, I think -- I hope that answers your question.

And also just how you plan to -- which is finding in your other studies. For example, do you expect the quantity of EEG to have [indiscernible] and body dementia?

Yes. So right now, we don't have any specific plans to alter the trials that we are executing right now. However, this is encouraging then. And given the relatively noninvasive manner in which EEG is collected, it is something that we could incorporate in the future.

Thank you. I will now turn the call to Lisa Ricciardi for closing remarks.

Thank you, Sarah. Cognition is laser-focused on taking innovative science and through the course of drug development, bringing new medicines to the market. Our lead candidate, CT1812, is a neuroprotective compound targeting the signature receptor. And in this SEQUEL data, we saw, again, new evidence for the neuroprotective effect of our drug in Alzheimer's disease. As Tony indicated, readouts from our development program build on target engagement demonstrated in our SNAP trial. This study was published last month. The paper can be found on our website. Our SPARC trial demonstrated anatomic impact on CT1812 on brain volume, and our SHINE study demonstrated early proof of cognitive changes in mild to moderate patients. With SEQUEL, we have now added neurophysiology evidence for neuroprotection to our understanding of CT1812. As noted earlier, we're grateful to the NIA for their continued financial support of our trials. With their funding and our disciplined fiscal practices, we have cash to fund our work to the second half of 2024. This management team and our R&D organization are focused on achieving our targets and milestones over the next 24 months. In closing, I'd like to thank the NIA, researchers, patients and their caregivers who participated in this study. They are essential in advancing medical care to battle disease. As we commemorate Alzheimer's and brain awareness month, we recognized considerable progress this year with new treatment approvals offering a new sense of hope and optimism in the field of neurodegeneration. The science is truly progressing, and we're pleased to play a role in these advances. In closing, as Cognition, we have an important mission to take on Alzheimer's disease, dementia with Lewy bodies, and dry age-related macular degeneration. All of these conditions impact people as they age, eroding their quality of life and independence and a struggle for them as well as their loved ones. We look forward to sharing our future progress with patients, caregivers, clinicians, investors, and the scientific community. Thank you again.

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.