CGTX

Business Context and Reporting Period

Cognition Therapeutics, Inc. (CGTX) is a clinical-stage biopharmaceutical company developing disease-modifying therapies for age-related degenerative diseases of the central nervous system and retina. The company's lead product candidate is zervimesine (CT1812), targeting the sigma-2 receptor complex. This Form 10-Q covers the quarterly period ended September 30, 2025.

Key Financial Metrics

Material Changes vs. Prior Period

• Expense Reduction: Total operating expenses decreased by $9.1 million (21%) for the nine months ended September 30, 2025, compared to the same period in 2024. This was driven primarily by a $7.5 million decrease in Research and Development (R&D) expenses due to reduced Phase 2 trial activities and lower personnel costs.
• Grant Income Decline: Grant income decreased by $3.1 million year-over-year, correlating with lower eligible reimbursable costs incurred during the period.
• Capital Raising: The company significantly improved its liquidity position through a Registered Direct Offering in August 2025, raising net proceeds of approximately $27.9 million, and At-The-Market (ATM) sales generating $8.3 million in net proceeds during the nine-month period.
• Share Count: Common shares outstanding increased from approximately 59.9 million at December 31, 2024, to 88.3 million at September 30, 2025, due to equity issuances.

Guidance, Outlook, and Risks

• Clinical Progress:
  • Alzheimer's Disease: The Phase 2 SHINE study met primary endpoints for safety. A prespecified analysis indicated a 95% reduction in cognitive decline for participants with low baseline plasma p-tau217. The FDA confirmed the Phase 3 clinical program plan in August 2025.
  • Dementia with Lewy Bodies (DLB): The Phase 2 SHIMMER study met safety endpoints. Zervimesine-treated patients showed significant improvements in behavioral, functional, and motor scales. An Expanded Access Program (EAP) was funded by a philanthropic donation.
  • Geographic Atrophy (GA): The Phase 2 MAGNIFY study was voluntarily concluded to focus resources on CNS indications. Results showed slower GA lesion growth compared to placebo.
• Liquidity Outlook: Management believes current cash resources, combined with grant income, are sufficient to fund operations through the second quarter of 2027. The company has approximately $36.3 million in obligated NIA funds available for future expenses.
• Risk Factors:
  • Government Shutdown: A federal government shutdown effective September 30, 2025, creates uncertainty regarding FDA review timelines and the availability of NIA grant funding.
  • Regulatory Uncertainty: Potential policy changes under the new U.S. presidential administration could impact FDA requirements and approval pathways.
  • Capital Needs: The company expects to continue incurring losses and will require substantial additional funding for future clinical trials and commercialization.

Investor Verification Checklist

• Verify the sufficiency of the $39.3 million cash balance against the projected burn rate to confirm the runway into Q2 2027.
• Monitor the status of the federal government shutdown and its specific impact on NIA grant disbursements and FDA review cycles.
• Review the detailed Phase 3 protocol for zervimesine in Alzheimer's disease following the FDA end-of-Phase 2 meeting.
• Assess the dilution impact of the recent Registered Direct Offering and remaining capacity under the ATM and Lincoln Park equity line.
• Confirm the timeline and enrollment status for the ongoing Phase 2 START study in early Alzheimer's disease.