Cogstate Limited (CGS) Earnings Call Transcript & Summary

Good morning, everybody. Thank you for joining this Cogstate investor presentation. We're really pleased to have you in attendance. I wonder -- my name is Brad O'Connor, I'm the Chief Executive of Cogstate. I really want to welcome you to this presentation, which is the first time we've done something like this. I think it's a great opportunity for our investors to see the broader executive team at Cogstate. We've got an excellent team, and I think you'll be pleased to get an opportunity just to get to know them and understand their expertise in the industry. We also wanted out of this presentation to give you the opportunity to understand Cogstate's Clinical Trials business a little better. I think people have a really good understanding of Cogstate's potential assessments and the role that they play in clinical trials and in the health care setting. But I think sometimes we don't do as good a job of explaining the broader services that we offer to our pharmaceutical company customers. So one of the things we want to do today was to give you the opportunity to really understand that our Clinical Trials business represents over 90% of our revenue at Cogstate presently. So it's the major part of our business. And in that business, we act as true advisers and partners with large pharmaceutical companies as they're running global clinical trials and central nervous system diseases. So I wanted to give you an opportunity to understand that a little bit better. [Operator Instructions]. So again, we welcome your questions, but we'll do that at the end of today's presentation. So I'd like to introduce our presenters today. We have Chris Edgar, who is the Chief Science Officer at Cogstate. We have Pam Ventola, who's the VP of Science, and predominantly works in our rare disease area. And we have Rachel Colite, who's recently taken the role of Executive Vice President of Clinical Trials. So I'll let those folks introduce themselves, and then we'll get into the presentation.

Thank you, Brad. Welcome, everyone, from me. My name is Chris Edgar, and as Brad said, I'm the Chief Science Officer with Cogstate. I've been with the company for about 5.5 years now. My academic background primarily is obviously psychopharmacology, but I've been working in drug development for around 23 years. Formerly, I was with the Swiss pharmaceutical company Roche, where I was a principal scientist working across their neuroscience portfolio. And my role at Cogstate is to oversee the science function activities across the various elements of the business, the clinical trials, academic research and health care components.

Hi, everyone. I'm Pam Ventola. I'm a pediatric clinical neuropsychologist by training. I've been consulting with Cogstate for about 12 years, and I joined full time about 5 years ago. Prior to that, I was an associate professor at Yale University at the Child Study Center, and I retain a dual appointment between Yale and Cogstate even now. My role at Cogstate, as Brad alluded to, I direct all of our pediatrics in rare disease work. And I also oversee all of our science related to rater training.

Great. Hello, and welcome. My name is Rachel Colite. I'm the Executive Vice President of Clinical Trials at Cogstate. I've been with the company about 8 years now working in leadership roles in various functions, including our decentralized solutions. And currently, I lead our clinical trials organization across commercial and operations. Prior to joining Cogstate, I spent about 7 years at ICON plc, a global contract research organization where I worked primarily in corporate marketing functions across early-phase laboratories and late-phase development groups.

Thanks, guys. So we're going to start today with -- we'll dig into the Alzheimer's disease clinical trials landscape, and Chris will take us through that. We'll then touch on the opportunities that we see in rare disease. And then we'll bring that all together by talking about the capabilities that Cogstate offers to our pharmaceutical company customers. So Chris, we'll hand over to you to talk us through the Alzheimer's clinical trials landscape.

Thanks, Brad. So in this part of the presentation, then the intent is to give an overview of recent developments in the field of Alzheimer's disease clinical trials, emerging trends that address the recent approvals that we've seen and our developing understanding of the pre-dementia stages of disease, particularly what we term preclinical Alzheimer's disease and what are the remaining unmet medical needs in the area. And then from a Cogstate perspective, how our decentralized trials approaches and also how our digital cognitive assessments can really help to address some of the challenges that we'll see for the current and future clinical trials that we expect in this space. So as many of you will be aware, the 1990s and early 2000s saw a series of approvals to the symptomatic treatment of Alzheimer's disease. And these treatments for cholinesterase inhibitors and memantine resulted in some symptomatic relief for patients improvement in cognitive symptoms of the disease and some improvements in activities of daily living, but they weren't seen to modify the underlying course of the disease. So not what we would term disease-modifying treatment. So in parallel to this then, there was clearly much work left to do. And a series of clinical trials will run at the mild cognitive impairment stage of disease with the symptomatic agents and also a number of other mechanisms were explored, but none of these were really successful, and no approvals were seen then over the subsequent 2 decades of research. At the same time, substantial effort was undertaken to explore the amyloid hypothesis, which is that amyloid protein is a causal factor in the clinical symptoms of Alzheimer's disease. And whilst over that period, there are a number of negative trials leading to periods of wavering confidence in that hypothesis, what we now see is that many of those trials fit into a very clear picture now where lowering of amyloid in the brain is clearly associated with clinical benefit and a certain threshold of lowering needs to be achieved in order to see that clinical benefit. And as you hear, that can be clearly fit into that pattern. So these treatments are -- they're an enormous step forward in providing for us the first approvals of disease-modifying treatments really proven to slow progression of the disease. And at the same time, establishing a clear regulatory approval pathway. Naturally, though, with these approvals has come debate. The efficacy of the treatment has been challenged to some extent. There's clearly further work to do in order to further increase the level of effectiveness of treatment. And then two, really understanding what are the important threshold for meaningful change and difference is an important component. And this will help both to understand the benefit to patients but also to differentiate between treatments in terms of their efficacy and effectiveness and also to help payer groups to understand value and pricing of treatments. And there are 2 additional concerns around aspects of safety, dosing and access to treatment that remain to be resolved. And we know that there's this area of amyloid-related imaging abnormalities which are a potential safety concern in reflecting micro bleeds in the brain. And this is clearly an area of concern, although very few cases it seem to be symptomatic and even fewer result in serious adverse events, clearly, a safety concern that drug developers are keen to address. So on the next slide, we'll switch gears a little bit to touch on this concept of preclinical Alzheimer's disease. And it's worth noting first a slightly confusing terminology here. So we're not talking about preclinical studies that may occur prior to human trials but rather a very early stage of Alzheimer's disease, that's prior to the emergence of clinical science and symptoms and it's a stage of Alzheimer's disease that can be defined by biomarkers. So the National Institute on Aging and the Alzheimer's Association research framework in 2018 really helped to further define early Alzheimer's disease by the underlying pathological process and not solely on the clinical consequences of diseases as we used to in the past. And this framework focuses on the diagnosis of Alzheimer's disease, primarily with biomarkers of amyloid, tau and neurodegeneration. And that's the so-called ATN framework. So 3 different pathologic processes occurring in the brain and used to define these stages of Alzheimer's disease. Aligning with FDA then, these frameworks provide us with a clear understanding of how to define preclinical ATN and so to some extent, mild cognitive impairment and early Alzheimer's disease, and they really are a driver for helping us to recruit the right kinds of patients into trials and really helping us to design robust studies that the regulators will be comfortable with as demonstrating a well-defined disease process. So switching back then to the research area itself. Clearly, as we were outlining there are substantial areas of unmet medical need that drug developers will seek to address around efficacy, safety and access to treatment. The approved amyloid treatments now provide a foundation for combination therapy. And that's a really exciting potential area in the field of Alzheimer's disease that we now have this foundation on which we can add additional treatments potentially with different and novel mechanisms of action that may address further aspects of the disease. We know that the approved treatments may only slow progression by 20% or 30%. So there's another 70% to 80% worth of improvement, that additional mechanisms of action that combination therapies might be able to achieve in fully arresting the progress of disease. This could include things like targeting different species of amyloid such as the Acumen lead asset, which is believed to preferentially target oligomers over fibrils or it can be nonamyloid mechanisms, things like tau propagation, neuroinflammation or synaptic plasticity. And we see that these targets are being addressed both with small molecules and biologics. If we then think about route of administration and dosing regimens. This will also be an important area to address seeking to flying treatments, which may have subcutaneous or oral routes of administration will aid convenience for patients. And of course, fewer infusions would also be an advantage for patients. And then we touched upon the ARIA, the amyloid-related imaging abnormalities, certainly improvements to safety that can happen. And then overall, health care system preparedness presents us with a series of challenges to access. We want to improve availability. We want to lower the cost and invasiveness of the approaches to diagnosis. So shifting away from lumbar puncture and the measurement of cerebrospinal fluid shifting away from imaging techniques in the use of PET scans and towards blood-based biomarkers will aid in cost and convenience and efficiency of trial conduct and identification of patients. So it's perhaps unsurprising then that this is an active research area. There's an annual report produced by Jeff Cummings and colleagues that looks at the Alzheimer's disease trial pipeline. It's a rich area for understanding what's happening. But we see that there are over 180 active trials as of January of this year and something like 141 agents being investigated. So this pipeline review is really helping us understand that it's an active research area. And then if we think about the number of disease modifying therapies that are being explored, something like 79% of that active pipeline is in disease-modifying therapies, new molecules and biologics that aim to change the disease course. Around 8 of these are in this preclinical AD stage, so 4 Phase II trials, 4 Phase III trials are enrolling preclinical AD patients. There are substantial advantages to drug developers in trying to treat these patients. It's a larger population, a bigger market for the drug. And of course, there's a potential substantial benefit to patients in being treated earlier, in trying to prevent progression at the very earlier stages of disease, the benefit to patients and families, of course, is that you maintain function at a much higher level, at the point at which people are not really experiencing prominent symptoms of the disease. Of course, all these trials do face major challenges. They're much longer in duration. Patients may be on treatment in a preclinical AD trial for somewhere between 4 and 5 years back rather than the 18 to 24 months that we might see for an early Alzheimer's disease clinical trial. The studies require larger sample sizes. They have higher screen failure rates. So recruitment and retention are major challenges. And as a consequence of all of these things, the idea of Phase II proof-of-concept trials is somewhat more challenging for drug developers. We won't tend to see drug developers address the preclinical AD population as their first series of studies with a new drug but rather they may seek to generate evidence first in later stages of the disease before they move into the preclinical population because they can generate that evidence more quickly with smaller, shorter trials. So how might we start to then address some of those challenges? Well, the first area, which Cogstate in particular, are well positioned to address is the use of decentralized clinical trial approaches. So these can include remote assessment and various solutions from home visits through to self-administered and bring your own device or passive assessment approaches. The potential here is really to lower burden. It's lower burden for patients, lower burden for caregivers and family members, too. And we should remember that for most of these Alzheimer's disease trials, many of the assessments that are conducted are dependent on an informed caregiver or family member to provide information about how the patient is doing. So really, we're enrolling 2 people into the clinical trial. And one of those, the healthy family member or caregiver may well have many other commitments on their time. Certainly in the preclinical AD population, these people are going to be somewhat younger than we see in AD dementia trials. They may be working or have warranteering commitments. So really supporting them over a very long period is a difficult thing to do. As we touched on recruitment and retention, then becomes really important. So we have to seek ways to lower the burden for these participants in the trial. By supporting some of that assessment at home, we can substantially lower burden. People are not having to come into the clinic to do quite lengthy assessments where interviews might last for 30 to 60 minutes perhaps or cognitive test batteries might last for a similar period of time. Many of these things can be conducted in the home. And digital health technologies too provide us with opportunities to conduct this kind of remote and at-home assessment. And this then provides us with overall far greater flexibility in study design and conduct these opportunities to lower burden and support recruitment and retention. And then also we may be able to use pools of central raters where we can conduct traditional assessments via telehealth approaches to further support those remote assessments. On the next slide then, we'll look at the idea of digital health technologies which include computerized cognitive assessment. And it's clear that these are likely to play a really critical role in the early detection of Alzheimer's disease, and in its diagnosis, it's prognosis and therapeutic decision-making. So really a role for these assessments to play across the journey for patients from early screening through diagnosis and to later treatment and monitoring of that treatment. These technologies too have the potential to create awareness around brain health in the community, and that may, in part, drive important lifestyle changes. But also change behavior around awareness and willingness to participate in clinical trials. And there are 2 elements then that are important to this. The idea that we can leverage these technologies to help with the substantial challenge that may be faced around recruitment. Even the Cummings report suggests we need something in the order of 58,000 patients to support the number of clinical trials that are planned then that might result in screening of 500,000 or 600,000 participants. And being able to find those individuals in the community is going to be very difficult and raising awareness, it will be an important element of that and digital technologies have a role to play there. Additionally, for the approved treatments, it's going to be important to try and identify patients earlier in the disease course. These treatments are approved for people with mild cognitive impairment. And currently in clinical practice, processes and tools are not well designed to identify those people. And there's a potential challenge then for real-world evidence if there's a bias skewed towards treating patients who are later in the disease. It may be that those treatments fail to demonstrate as great a degree of effectiveness as we might expect or even it may show additional safety concerns. So certainly, an important role for digital technologies and for blood-based biomarkers to play in early detection of disease as well. In summary for this section, we see then that recent approvals have the potential to act as a catalyst for research in this area. But at the same time, there's still a substantial unmet medical need to be addressed. So we think that there is likely to be continued effort in this area and large numbers of trials seeking to address both a greater understanding of how to increase efficacy and effectiveness as well as safety, but also to address these access challenges to ensure that more patients get on to treatment. And a real opportunity to use decentralized trial, approaches and digital technologies in order to address some of these key challenges and barriers that these trials may face.

Chris, that's excellent. I think a really great summary of what's been happening and what's the really exciting space at the moment. I want to dig into a couple of things before we move on to Pam. The first is you mentioned the challenges around recruitment of over 58,000 patients at the moment. I think our belief certainly is it's fair to say that those recruitment challenges are only going to get harder in the future when we're looking at certainly the exploration of new drugs and other pharma companies coming into this space. Is it the competition that, that recruitment is going to have with respect to the drugs that are on market, I thought that the investors would like to hear from us some of the activities we've been doing in as pharma companies seek to sort of address that challenge and think a little bit differently about how do they find patients for their clinical trials?

Yes. Thank you, Brad. And it's worth highlighting that just last month, we conducted a large-scale screening pilot and older adult residents in the U.S. using our digital cognitive assessment tools and also a blood-based biomarker which was on behalf of the pharmaceutical company seeking to find out how they can more rapidly identify more of these patients for enrollment in the clinical trials. And that pilot enabled us to demonstrate the potential to screen several hundred patients over the course of just a few days. And this is really important for us in really showing the potential of these tools to expand the way that we access and screen for trial participants. But I think importantly, too, the willingness of potential participants to undertake digital cognitive assessment and to have a blood test, there's strong interest in the community, if you can make the outreach directly to them.

That's fascinating. The other thing that I think is interesting to dig into is we've got this breakthrough approvals of the monoclonal antibodies. And you showed the Cumming's paper with the nice graphic of the different areas where pharma companies are investing their resources at the moment. Do you think that the approval of disease-modifying therapies changes the investment mix in terms of -- do we expect to see less investment in symptomatic disease and more investment in disease-modifying treatments?

I think disease modification, it already makes up the majority of the investigation of the drugs that we see. And I think from a science and public health perspective, it's likely to remain the focus -- the holy grail for people will be really to prevent disease progression if they can. And I think that's going to be a major target and continue to be so. I think, though, as we do now, we'll probably continue to see symptomatic therapy make up some component of that mix and that may be perhaps more and more targeted in certain areas. We see, for example, that agitation and psychosis is a target for symptomatic therapies. And there are certain categories of symptoms that may be particularly amenable to symptomatic treatment.

Yes. And you mentioned that there's 8 ongoing trials in that presymptomatic clinical area, they're sort of prevention studies as you call them. Is that something that you think will increase in number? Is that an area that more and more companies will push into that nirvana of disease prevention rather than just improvement?

I think for anyone who generates evidence of disease modification at later stages of the disease. But perhaps not even if they have a successful trial, but even if they show ability to modify the disease that leads to enough confidence to initiate a trial in preclinical AD. They may well seek to do that. There's certainly an expectation that for a disease-modifying treatment, efficacy will be greater at an earlier stage of the disease. And so I think really people will be looking at the evidence that they have in front of them and whether that warrants moving further backwards in the disease course. And it may not require that they have a successful readout at later-stage disease or an approval, but rather just the confidence from what they see in the [ test ].

It's fascinating. I think it's a really exciting time for Alzheimer's disease patients and their caregivers as we start to see these therapies come through. And as you suggested at the start, there's still plenty of room for improvement. So we'll keep going with the presentation, and we'll hand over to Pam now to talk about what she's seeing in the rare disease clinical trials landscape.

Great. Thank you, Brad. So I wanted to start by just level setting on what is a rare disease. And it's truly defined by prevalence, exclusively. So a rare disease affects less than 1 in 2,000 people. That's the definition. We also work in what's called ultrarare diseases, and they're just more rare. They affect less than 1 in 50,000 people. And at Cogstate, we work in rare central nervous system diseases. And this list is not exhausted by any means, but I wanted to give you a sense of some examples of what these kinds of rare diseases are. So they're listed here. And the rare disease market is very attractive, and it's driven by multiple factors, largely financial ones. So in the 1970s, there are only 10 orphan drugs that were approved. But in the mid-1980s, there was a law passed in the U.S. that created financial incentives for pharmaceutical companies to work in rare or orphan disease areas, because the market is never going to be as big as it is in other indications where there's more patients. But there's still a very much of an unmet need. So there's incentives to do so that extend beyond just amount of possible patients. And what that led to was this vast increase in the number of orphan drugs that were worked on and therefore, approved. So in this time period, there's 564 drugs approved and their trajectory is just going up as illustrated in this figure. And to talk a bit about the financial incentives, it's termed the Orphan Drug Act, and there's 4 specific financial incentives in this law that encourage pharmaceutical companies to develop orphan drugs. First is they have 7 years of exclusivity. So that prevents competitors from selling the same product for 7 years. There's also tax credits available, grant funding and FDA user fees are waived to about the cost of $2.5 million. In addition to these direct financial benefits, there's also accelerated approval for the trials, so they go faster. In the next slide, I just wanted to talk about the probability of success. It's another factor as to why the rare disease market is growing as such. You're more likely to be successful if you're focused on a rare disease with -- if your new drug focuses on a rare disease. So there's about a 7% probability of success across the board. It's about 6%; less if it's a chronic high-prevalence disease and more about 17% the probability of success for new drugs focused on rare diseases. And now talking about the strategy for biotechs. So not all the time certainly large pharmaceutical companies work in rare disease, but it is a particular focus area for smaller companies, so the biotechs. And they're able to be quite successful in rare disease using a couple of different strategies. Some are science, some are just inherent to being a small biotech. So from a strategy perspective, 1 compound in rare can often target multiple diseases. So you can have 1 treatment and run multiple parallel trials in multiple indications with that 1 compound. And similarly, you could have a trial that has multiple indications, so multiple diseases in the same trial. So as an example, there's rare seizure disorders. They all have a different name. They're named based on the genetic etiology of the disease. And there's rare disease trials that together, people with all multiple different kinds of rare seizure disorders into a single trial. So it increases your market. And it also increases the speed that you can enroll patients. It has multiple benefits. And it's in a really effective strategy for biotechs. As another strategy, and this one is directly related to the regulators. If in many cases, you can make a case for this, if you have a serious disease with no treatment available, you can have approval with 1 pivotal trial. So one efficacy trial. So a lot of our sponsors work in -- and we work within rare disease, combine a Phase II and Phase III into 1 trial. They only need to demonstrate efficacy in 1 trial. So it really speeds up the process. And then just lastly, kind of an inherent sort of approach with biotechs. They tend to be small, so they can work very quickly, very agilely. They're a small group or if not 1 kind of decision maker involved. So it just allows them to -- the approval pathway is fast and they can be fast. So it just -- it allows for quick success. And I wanted to highlight just 1 recent success in this area. We had our first approval of a rare genetic neurological disease. This is huge for the field. And it's really exciting for the families and the patients and the field as a whole. So there's a disease, Rett syndrome. With Rett syndrome, you -- the children, adults has a reduced life expectancy to some degree, so you might hear me just say children. But there -- the individuals are very impaired. So they don't walk, they don't talk, and they have no functional use of their hands. So it's an extremely impairing condition. And we just had our first successful approval for this kind of disease, and again, specifically for Rett syndrome. And the drug is trofinetide. Neuren licensed the initial trials. They then licensed the compound to a different company, Acadia. And that's when Cogstate was brought on board in this approval pathway and then the path of this treatment. And we authored the paper with Acadia providing evidence for the clinical meaningfulness of the difference in the change of how much these individuals got better. So as a scientist, I see a change of 3 points. I get really excited. But the payers say, so what? So we need to show evidence that, that quantitative change on our measures is clinically meaningful to families. So that's the work that we supported with Acadia, sort of making the connection between the quantitative improvement on their primary outcome measure and directly connecting that to saying that's a meaningful change that changes quality of life in a meaningful way for these families that have kids with Rett syndrome.

So I just wanted to jump in here and provide a couple of examples of -- with companies that Pam has worked with recently just to show to bring some of this together in terms of why this is an area that biotech is focus on and what it means from an investment point of view into biotech. So the first company that we're showing here is Reata Pharmaceuticals they have just in this -- a few months ago now, had their first approval in their 21-year history. So there's a little bit of a backway to this drug where they had a successful Phase III trial in 2020 and the FDA asked to see more data. And they've just had the first drug approved in the their focus indication. Small patient population, you see there, 5,000 patients diagnosed in the U.S. and expected to be around 22,000 worldwide, list pricing in the United States of $370,000 annually. You can see the jump in their market cap in NASDAQ listed company in the U.S. in March '23, on the announcement of the successful Phase III trial and the FDA approval. And then you can see just a few weeks ago, Biogen announced a definitive agreement to acquire Reata Pharmaceuticals. So obviously, a fantastic results for the shareholders of that company. One that's perhaps a little closer to home and that many investors on this call will be aware of is Neuren. For those that aren't aware, and have talked about this before, you can see the jump in their market cap with the approval of their treatment for Rett syndrome that Pam just threw. And then again, only a few weeks ago, the jump in market cap when they further licensed the rights to Acadia for the extended rights for NNZ-2591. If we look at Acadia and so the acquirer of that asset and see what happened with -- in respect to their market cap on approval of the treatment, you can see in -- with the announcement of the approval, not much movement in their stock price. Obviously, we're talking about a company here, where they had a $3.5 billion market cap, so a much larger company with much larger revenue. And when you look at the jump post their quarterlies following their first quarter sales of that drug, you can see a substantial increase in their market cap at that time. It's important to note here that they gave a much broader update including an update over an upgrading Parkinson's disease therapy. But as you can see there, the first quarter sales of $20 million to $23 million, more than 10x consensus estimates of the sales for that quarter. And they've estimated two quarter sales in the order of $45 million to $55 million. So once the broader market understood the financial impact of that approval, you see the jump in the market cap there.

Great. And I'm going to circle back now and talk about with this really strong opportunity, why Cogstate is well positioned for this market in rare. We have vast experience. We are currently supporting about 40 trials in rare disease across 25 different indications. We also have significant experience with -- it's called a natural history study. That is a trial that is a nondrug trial. And I'll talk about that more in my next slide, but it's important for a rare disease in the sense that we need to do trials to understand the natural course of the disease before we do intervention trials at times. We also do a lot of work with pharmaceutical companies on developing indication-specific outcome measures. So the majority of time in rare disease, the patients are very, very impaired. They're not able to do complex assessments. They are many times not able to do a digital battery. They're sometimes not even able to do some of the commercially available standardized assessments on the market. So we need to develop outcome measures that are suitable to these patients and are also sensitive enough to detect changes. So to use the example, from Rett syndrome, these patients are incredibly impaired. Again, they're not walking, they're not talking, and they have no functional use of their hands. But the drug was approved because these patients became more engaged. They became more responsive, they were more attentive. They're not -- it was not in the sense curative by any means, yet this small amount of change, relatively speaking, across the disease was significant, but also very, very meaningful for these families. And we can measure that level of change, that kind of granular level of change, it's still very meaningful when we develop these indication-specific outcome measures that are designed with metrics to assess that level of difference. We also -- this field of rare disease is now in comparison to other indications, in neurodegenerative disorders, in psychiatry, I mean we have a recent history. So there's no clear precedence yet from measures or methodology. So the vast work that we are doing now is incredibly valuable to our customers because we can pull on all our breadth to help them decide what to do and move forward with their trials because in contrast to these other indications I mentioned, there's not decades of literature that they can pull on. They need to talk to the experts that are in the field now. And then for Cogstate, these trials are fast. There's fast fails, they quickly work. They're moving on to the next phase, kind of in parallel, very quickly, sequentially. So it allows us to iterate on smaller trials. It's a model that scales for us very easily. So in this next slide, I want to talk more about the point there about natural history studies and our experience there, it's really relevant to rare disease. So again, the natural history study is a trial that does not involve a drug. You're just following the patients over time without any intervention. It allows us to understand the course of the disease. And this is really important for pharmaceutical companies because some of these diseases, we don't know how the individuals change over time. We see them when they're 5 years old, when they're 10 years old, maybe when they're 20 years old, but we don't understand the trajectory of the disease. These natural history studies also allow pharmaceutical companies to gain some information to inform their end points, particularly around feasibility, what can these patients do? What can they not do, what's going to work? And then very importantly, from a regulatory standpoint and further on past the natural history study, in some cases, these natural history studies can serve as a control condition. So in traditional trials, you have a group that's on drug and a group that's on placebo. In rare disease, sometimes there's not enough patients for 2 groups. And in other times, if you're doing a treatment such as a gene therapy trial that is long, they are usually about 5 years, these diseases are so impactful to the patients. It's not always ethical to have a placebo condition, particularly for that long. So these natural history studies that are conducted at the beginning of the program, the beginning of the pharmaceutical companies program, they can often serve as the control condition. So you don't need a placebo group. Currently today, we are supporting 4 natural history studies. I just wanted to highlight 1 here. We're working in collaboration with the foundation. It's called the Loulou Foundation. They're working on indication called CDKL5 deficiency disorder. It's a rare disease, highly impactful to the patients. The Loulou Foundation has developed a partnership with 7 pharmaceutical companies that have come together for this natural history study. So these 7 pharmaceutical companies are working in collaboration to run this natural history trial. My hypothesis then is that these 7 companies are going to then run intervention trials using the data from the natural history study that was collected in conjunction with the foundation. And it's really important for Cogstate because we are supporting this natural history study by -- it positions us very well to then support these additional 7 pharmaceutical companies that will likely work in this area. Then next, I wanted to talk about another kind of point in terms assets of Cogstate that sets us apart. So we have a large team of neuropsychologists that work with us on a consulting basis. We call them our leads. They're local expert advisers. [ Surd ] term for them, but they're consulting neuropsychologists. And we have -- they're a global team, and we can use them as clinicians for trials to actually collect the data. So this -- what this allows is you can use fewer clinicians. So that's the figure on the left. So I collated data from multiple trials, collapsed it and to show that for these several trials for it to collect data on -- for 138 data points. So 138 assessments, we needed 53 people. So there are 53 raters collecting data for 138 assessments. And that's because this is rare disease. No one site's going to have a lot of patients because these patients are so geographically spread. And that creates multitudes of problems. It's not efficient. You increase scientific variance. It's not a great model. So Cogstate's offering this alternative, where we have central raters, so it's our team of neuropsychologists and across multiple trials we were able to collect data on 150 assessments using only 7 clinicians. So the operational efficiencies were there, the financial efficiencies were there and the scientific rigor was improved because we decreased the variance. And then there is another way we use our team of neuropsychologists is to score some assessments centrally. So some assessments you can't do remotely. You either have a baby or you have a test that involves a lot of materials like tangible manipulatives, you can't do that remotely. But what you can do is have a site rater collect that data and then have someone centrally score it and did a small study looking at the benefit of this kind of model, and what we saw, this was about 70 administrations. There were 37% of those administrations that had errors in scoring that were able to be corrected with our central rater, rescoring the assessment and correcting these data points. So it dramatically improved data quality using this approach. So in summary, we have a lot of scientific support, a lot of scientific publications. The work we're doing, we collaborate with our sponsors to get the work sort of out in the field for a peer review process. It demonstrates a scientific merit. Some of these papers I am illustrating here involve the indication-specific outcome measures. I mentioned some around methodological considerations for rare disease and some talk about how to determine the clinically meaningful change? Is that difference enough that 2 or 3 point changes in your measure, is that clinically meaningful? And how you go about this? And we work again collaboratively with our sponsors to get this out. This is also then from a Cogstate standpoint, taken up by the regulators to inform future approaches, which helps our business because it brings people back to us as well. So then in summary, in rare disease, there's been really exciting progress recently. I mean, exciting scientifically financial benefits for our biotech and Cogstate is just very, very well positioned to take advantage of this large opportunity.

Thanks, Pam. That's wonderful. A couple of follow-up questions there. I mean you talked about the first approval of a rare genetic neurological disease or the first treatment in that area. Your thoughts in respect of what that will mean in terms of future opportunities, do you expect that to lead to an increase in [ incident ] in rare neurological disease?

Absolutely. I mean they were the first ones to show that this kind of trial can work, we can change this kind of disease. I mean, that really derisks future investments. I mean it shows it's possible. It also shows that in order for a drug to get approved and then to get payer support, it doesn't need to be curative. And that's really important for these patients that are highly impaired. Just moving the needle is enough, and that's been demonstrated now very clearly. So I think it is going to dramatically sort of increase the market.

Yes, it is almost proof of lowering of the bar and proving to biotech companies that small improvements are really meaningful. You talked about your regulatory interactions. I think people would be interested to hear some of the ways that you engage with the regulars either with or on behalf of Cogstate customers?

So we actually do a lot of interactions with the regulators. That's a really important kind of work that we do. Sometimes it's indirect in the sense that we advise our sponsors based on prior interactions and knowledge that we have. And sometimes -- so that would be in helping them develop the methodology of their trial, selecting endpoints based on the experience that we've had. In other cases, it's direct interactions. So it's attending meetings, communicating with the regulators particularly around endpoints that are new. So these are - these indications, again, they don't have a long history. We're trying new things. So it's educating and collaborating with the regulators to help them understand these endpoints that they might not be familiar with and how to use the endpoint. So what kind of data comes out from them, how to think about that and how we can apply them to rare disease trials.

Fantastic. The thing that fascinates me is that the natural history studies you talked of in the way that they can replace a placebo group in these trials and the logic for that makes a lot of sense. How long do those natural history studies take? What's the normal time frame to conduct those? And in respect of the example you used the Loulou Foundation, I think it's fascinating that it's got 7 pharma companies working in a pretty competitive way. When does that Natural History study finish? So when do we expect new things to come from that in terms of new opportunities?

So the duration of Natural History studies, they can vary. How rare is the disease? How long do we want to follow the patients in a natural way? So they do vary. But even with that variability relatively speaking, they're quick, 2 or 3 years. And pharmaceutical companies can launch them simultaneously with their intervention trial. So it's not that you necessarily need to wait for 3 years -- no, I wouldn't expect them to wait for 3 years necessarily for it to wrap up before they move on. And then with Loulou in particular, that one was 3 years, so about a year from now. It's ongoing. Yes.

Fantastic. Thanks, Pam. Fascinating stuff. And again, we -- Pam will be available for questions at the end of the presentation. So what we're going to try and do now is bring this all together, invite Rachel Colite to speak to this. Just to sort of -- you've had some -- we've had some deep dive now into Alzheimer's disease and rare disease. What we want to do is talk about how that comes together in terms of our offering for pharma companies?

That's right. Thank you, Brad. We can go the next slide, please. So before we jump into capabilities, we want to provide a quick picture of some of the key vendor organizations who typically collaborate closely with Cogstate in the delivery of CNS trials. So I've highlighted here where Cogstate sits in this, but this ecosystem dynamic really provides for us an opportunity for channel relationships, and it really requires that we have strong capability around commercial partnering and interoperability. So this is something that Cogstate has focused on as a competitive advantage. In particular, with the group listed #1, the clinical research organizations who are running the trials as well as number four, electronic clinical outcome assessments for ECOA organizations who support data collection for a wide range of reassessments. So we'll talk about these a little bit more as we go through. So now we'll get into how we bring these services together through science, technology and operational excellence with a focus really on delivering better, more conclusive research data to our pharmaceutical sponsors. Next slide. So it really starts with scientific consulting. We have teams, as you've heard here, such as Pan and Chris who have really earned trusted partner relationships with our pharmaceutical sponsor customers. They engage quite early in the trial planning process, which is really important for us commercially. And they inform things like trial design, selecting which measures to use as Pam described, designing the quality program or the data quality monitoring programs and then all the way through to statistical analysis and interpretation of some of those FDA regulatory interactions that we talked about. So once the design is finalized and the measures are selected, this is when we oversee the licensing for any third-party, license holders or test authors as well as overseeing any translation or cultural adaptations or validations for using global studies. So I guess the point here is we support endpoints that go well beyond that, those that Cogstate offers. And so it really requires that we work with third-party license holders and we've developed a real in-house capability around the nuances of this process, and it can be quite involved and not terribly interesting, but it's something that if you don't get right, it can really have dramatic impacts in terms of study start-up time lines and also data quality. So these capabilities in relationships with the license holders are important for supporting that sort of complete solution in clinical trials. So electronic clinical outcome assessments or ECOA, as we call them, these are primarily conventional paper assessments that are deployed in an electronic format. So think of digital form. Cogstate partners with technology providers in this space. We work with them and then closely direct the paper migration activities. And we do this by infusing it with our clinical experience and expertise to inform the instrument design so that we can really squeeze out any opportunity for error prevention. These technologies come with a lot of capability for observing things like incongruent values. But you really have to have a deep understanding of how these instruments are used and what you would expect as an incongruent value in order to really make the most of technologies like this. So we find it's really important to pair our clinical scientists with the technology in order to really make the most of air prevention, which then helps us pursue that goal of overall data quality. I think it's also important to note that these ECOA partners are important for us as operational partners, but also a commercial partners. So rater training is a really significant part of Cogstate's offering for those conventional assessments. As these assessments can be quite error-prone and quite variable. So while the industry standard was previously, this live instructor-led programs, often at investigator meetings where everyone would come together, we've transformed our offering over the years with technology to be more multimodal and really be more of a focus on e-learning methodologies. So in that time, we've also moved away from more of a one-size-fits-all training. These different more remote approaches have allowed us to also in parallel, develop more bespoke certification pathways that could be more tailored to the specific experience level of their individual rater. So this matters to the sites and to the raters, but it also matters a lot to sponsors because what this does is, it supports on-time study start-up and getting the training of the critical path which ultimately shortens their time line to market, which is quite important to them. Next slide. So central monitoring is really just an extension of the training program itself, but into the study. This is where our global network that Pam described of over 200 clinical scientists, I think they're supporting trials in over 40 languages. These are mostly PhD neuropsychologists, and they'll review audio or video recordings and also source data and database records from the individual rating sessions to ensure that the scoring and administrations were done accurately. Scoring errors in this way can be corrected again, as Pam described, and then administration errors can mean remedial training for the raters. So this is something that we're closely monitoring across studies to make sure that the ratings are of high quality and that we can intervene if we see raters beginning to drift from some of that training that they received at the beginning of the study. The second set of eyes of having additional neuropsychologist will be the work of other neuropsychologists is obviously very cost-intensive and time intensive, which really shows the importance that sponsors place on data quality in the CNS programs like the ones that we support. So next, we'll talk about digital cognitive assessments. And this is really where Cogstate got its start. And I think this is what a lot of people think of when they think of Cogstate. And it's still a very key part of why pharmaceutical sponsors engage us to support the broader cognitive assessment programs in their trials. We offer among the most scientifically validated compliant platforms, and we have a large and growing test menu covering many aspects of cognition. So I've listed some of those here. This is something we're adding to over time as we understand the needs of different sponsors. Recently, we've been developing some psychomotor vigilance tests to support our work in areas like narcolepsy. So this is a dynamic test menu, but one that has a pretty broad domain coverage currently. The platform really allows for these tests to be configured into specific batteries. So sponsors are taking a subset of these tests and putting them together in different combinations to address the research questions that they're seeking to explore in the programs. And I think it's really important that computerized -- computer administered tests, they don't require a rater or many of them don't require a rater. And so they're faster and easier to deploy because there's not all of that rater readiness and training and certification at the front of the trial. And they also dramatically see fewer issues of scoring and administration errors because it's really taken out of the hands of humans. So this can really help bolster signal detection when you're taking all that noise out of the trial. So that's really what we see as a driving factor in the selection of digital endpoints in many cases. So here, you've heard a little bit about this from Pam and Chris, but I wanted to wrap on our decentralized or at home data collection capabilities. So this is increasing in the clinical trials that we support. And as Chris pointed out, it addresses patient burden. And as Pam pointed out, it also addresses data quality. But importantly, there's been some FDA and other regulatory agencies making guidance around the need to increase representation of underrepresented minorities and research. And these approaches can also be really helpful in pursuing those goals. Cogstate has unmatched expertise in this area, and that includes large late-phase regulatory programs. That's really what has set us apart because we're moving beyond small pilots. We're moving beyond certain niche use cases and using these approaches with sponsors and large pivotal programs. There's 2 ways that we support remote assessment. The first is with our digital assessments. So these have been really optimized for self-administration with things like learn modules that are embedded into the test themselves that allow the participant to understand the rules of the game before moving into testing and to really make their way through that in a reliable way on their own. The other way that we support this is through decent -- through central rating and telehealth technology. So this is mostly related to the conventional assessments that we talked about, such as clinical interviews, and this is our Cogstate clinical experts, that network of our over 200 leads, as we call them, they're conducting the assessments internally using a smaller, more highly trained and calibrated pool of raters. So this approach is common in areas like rare disease, that Pam leads, and it's growing in adoption in other areas such as Alzheimer's disease, where there's now trials that are targeting a younger and quite cognitively healthy population who are well suited for the approach, and also who have other time demands. Chris talked about the importance of the caregiver and their considerations. But as we move earlier in the disease, the patients themselves are also quite well. They're younger and also have quite busy lives. And so these remote approaches could fit better into their lives and encourage their participation in the trials, which can be quite burdensome and quite long. So we see this as a real growing capability for us. To wrap up this section, I thought I'd give a quick case example of how our range of services that we provide, they come together to support the needs of sponsors. In this case example, it's a Phase III Alzheimer's disease study that's targeting the preclinical or presymptomatic stage of disease. So these are cognitively normal individuals who have amyloid or tau biomarker of disease. And it's a difficult population to define -- or defined in the community because they are quite well. Your typical Alzheimer's patient may be seeking care for their symptoms, but these individuals may not be. So the sponsor needed -- to a rural patient-centric study design to engage the several thousand participants that are required for this study, which follows over multiple years. And so this study allows for all of the cognitive assessments to be done at home versus requiring that there's a travel into a medical center. So Cogstate's engagement in this started out with consulting. We worked with the sponsor on endpoint selection and optimization, and that included several Cogstate tests. We also trained 2 distinct cohorts of clinical and psychometric raters to conduct all the rating sessions remotely, including the primary end point. This is all conducted via telehealth. And we also deployed our full data quality program and services in this study, where we are doing the central monitoring and rater training to ensure that these raters were trained to really high standards. So the trial is ongoing, but it's been a wonderful example of our close collaboration with sponsors and vendor partners to achieve a really innovative approach that could progress the aims of finding these -- this particular patient population, which is quite difficult to find the traditional clinical trial recruitment strategies. And similar to what Pam pointed out in the rare disease use case, just a slightly larger scale, but we're seeing tens of raters, a few dozen raters versus hundreds of raters to support a program like this one. So that obviously has really important implications on data quality, where we can invest all of the data quality resources and focus those on a small, really tightly controlled group of highly trained raters.