Alpha Cognition Q4 2024 Earnings Report

Alpha Cognition EPS Results

• Actual EPS: -$0.51
• Consensus EPS: -$0.48
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: N/A

Alpha Cognition Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Alpha Cognition Announcement Details

• Quarter: Q4 2024
• Date: 3/31/2025
• Time: After Market Closes
• Conference Call Date: Monday, March 31, 2025
• Conference Call Time: 4:30PM ET

Alpha Cognition (NASDAQ:ACOG) is a clinical stage biopharmaceutical company that develops treatments for underserved neurodegenerative diseases such as Alzheimer's Dementia and Amyotrophic Lateral Sclerosis. The company was founded in 2000 and is headquartered in Vancouver, Canada.

Alpha Cognition Q4 2024 Earnings Call Transcript

Key Takeaways

• In November 2024, AlphaCognition completed a NASDAQ cross-listing and raised $52 million, funding the commercial launch of Zunveil with a breakeven target in year three if revenue forecasts and expense management stay on track.
• Commercial manufacturing is on schedule with completed 5–15 mg batches, API stability extended to five years, and finished goods available through a retail and long-term care pharmacy distribution model.
• The U.S. launch of Zunveil in Q1 2025 features a $749/month wholesale acquisition price, a fully staffed commercial team, positive early prescriber feedback, and ongoing engagement with major payers for Medicare coverage.
• Pipeline progress includes reclaiming two preclinical programs (cognitive impairment after mild traumatic brain injury and acute pancreatitis), initiating a sublingual ALPHA1062 reformulation for dysphagia patients, and a DoD-funded study showing reduced neuroinflammation post-bomb-blast trauma.
• Q4 2024 operating loss was $2.5 million and net loss $5.7 million; year-end cash of $48.6 million (vs. $1.4 million in 2023) provides a runway under 2025 operating expense guidance of $38–42 million to support U.S. commercialization.

Presentation

[Operator]

Greetings, and welcome to the Alpha Cognition Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

[Operator]

It is now my pleasure to introduce your host, Henry Du, Interim CFO. Thank you. You may now begin.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

Thank you, Drew. Good afternoon, everyone, and thank you for joining us today for Aflacognition's fourth quarter and full year twenty twenty four financial results conference call. Today, after the close of market, the company issued a press release announcing these results. On the call with me today are Aflacognition Chief Executive Officer, Michael McStadden and Chief Operating Officer, Lauren DeAngelo. Today's call is being made available via the Investors section of the company's website at www.alphacognition.com.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

During the course of this call, the management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements reflect AlphaCognition's current perspective on existing trends and information. Any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on 03/31/2025.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. All thought recognition declines any obligation to update these forward looking statements except as required by applicable securities laws. I'll now turn the call over to Michael.

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you, Henry. Good afternoon, everyone. Thanks for taking time to join us on today's call. This is an exciting milestone for our company as it marks our first earnings report following the commercial launch of Zunbel for the treatment of mild to moderate Alzheimer's disease. The fourth quarter of twenty twenty four was characterized by a successful capital raise.

[Michael McFadden, Director & CEO at Alpha Cognition]

A cross list from the Canadian Securities Exchange to NASDAQ, commercial manufacturing progress and preparation for our commercial launch of Zundel. In November, the company executed a cross list from the Canadian Securities Exchange to NASDAQ and raised $52,000,000 in gross proceeds during this process. The company was able to attract an excellent group of investors who recognize the Alzheimer's market represents a large but dissatisfied market primed for disruption. We believe the capital raised is sufficient for the company to move to breakeven status in year three of launch, provided we execute and achieve our internal revenue forecast for years one through three and we manage our expenses judiciously. During the quarter, the company made substantial progress on commercial manufacturing, initiating the commercial batches for the five and ten milligram strengths, which have been followed by the fifteen milligram strength in January to complete our initial commercial supply for the market.

[Michael McFadden, Director & CEO at Alpha Cognition]

CMC stability test results demonstrated a stable compound extending our API life to five years and finished goods to two years, which we feel is more than sufficient for commercialization activities. Finished product for all strengths is available for pharmacies to order. As a reminder, this is a retail pharmacy distribution model, meaning patients can obtain product with a prescription at any retail pharmacy provider. Long term care pharmacies can order the product direct or through their wholesaler and all have access to Zunveil as we have this call. From a pipeline perspective, the company reclaimed two programs from Alpha seven Therapeutics, a preclinical program for cognitive impairment with mild traumatic brain injury and an early stage program for acute pancreatitis.

[Michael McFadden, Director & CEO at Alpha Cognition]

These programs will strengthen the company's pipeline and allow more flexibility and speed in completing the preclinical work for both programs. We have initiated work to reformulate our sublingual formulation of ALPHA1062. This work will initiate in early Q2 to improve taste and disintegration of the formulation. We anticipate the work will be completed in the fourth quarter of twenty twenty five. The significance of this formulation is that it can be used for patients with Alzheimer's who have dysphagia or aphasia, which are difficulty or inability to swallow tablets or capsules.

[Michael McFadden, Director & CEO at Alpha Cognition]

Estimates are that twenty percent of the Alzheimer's patient population may suffer from this malady, and currently they have the option of a patch formulation or they must grind a tablet or mix the contents of a capsule in apple sauce or something similar in order to take their medication. We believe if ultimately approved that some legal formulation can displace the current options available for these patients. Additionally, the company's Bomb Blast preclinical study with ALPHA1062 will conclude in late Q2 with results released in Q3. Now this was a two part study funded with a Department of Defense grant. The first part of the study concluded in Q4 and it demonstrated that ALPHA1062 administration reduced levels of neuroinflammation and neuropathology that occurs after bomb blast trauma.

[Michael McFadden, Director & CEO at Alpha Cognition]

In the quarter, the company added to its IP portfolio, securing a new composition of MATTER patent in The U. S. Covering tablet formulation of benziglantamine. This patent extends ZEMBL protection in The U. S.

[Michael McFadden, Director & CEO at Alpha Cognition]

Market through 02/1944. We have this patent under review in multiple other territories outside The U. S. And expect approvals throughout the world during the next eighteen to twenty four months. We've also made significant progress with our first ex U.

[Michael McFadden, Director & CEO at Alpha Cognition]

S. Partner, CMS Pharmaceuticals, who is representing Sunbelt R and D and distribution in China and greater Asian territories. We expect to hear from Chinese regulatory authorities on the regulatory path in Q3 and expect our first territory distribution initiation to occur the second half of twenty twenty five. Although expected revenues will be modest, the initiation of commercialization activities will allow CMS and AlphaCognition to learn from these activities ahead of potential product approval in China. I'll ask Lauren to discuss commercialization progress momentarily, but I'll turn the call over to Henry to speak to the financials of the company.

[Michael McFadden, Director & CEO at Alpha Cognition]

Henry?

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

Thank you, Michael. Good afternoon, everyone. As I review our fourth quarter and full year twenty twenty four results, please refer to today's press release and 10 ks that were filed earlier today. Starting with our operating loss, for the fourth quarter of twenty twenty four, we reported an operating loss of $2,500,000 which represents a slight increase of 5% compared to $2,400,000 in the same quarter last year. This increase was primarily driven by higher general and administrative expenses, which rose by 50% mainly related to costs associated with our U.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

S. Equity offering. For the full year 2024, our operating loss was $11,900,000 versus $9,900,000 in 2023. This was largely attributed to an increase in general and administrative expenses, reflecting consulting fees related to financing transactions, strategic initiatives, professional services and other operational support. Moving on to net loss.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

For the fourth quarter of twenty twenty four, we reported a net loss of $5,700,000 or $0.51 per share, essentially unchanged compared to a net loss of $5,700,000 or $1.33 per share in the same quarter last year. This was driven by favorable changes in the fair value of derivative liabilities, partially offset by increased interest expenses and a loss from foreign exchange fluctuations. For the full year 2024, our net loss was $14,600,000 or $2.02 per share compared to $13,800,000 or $3.84 per share in 2023. This increase reflects higher operating expenses and interest expense, partially offset by favorable changes in the fair value of derivative liabilities and increased grant income and interest income. As of 12/31/2024, the company apologies.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

As of 12/31/2024, the company had approximately $48,600,000 in cash compared to $1,400,000 as of 12/31/2023. This increase was primarily due to cash generated from the fourth quarter capital raise. The company has a strong balance sheet with sufficient liquidity to launch its unveil into a long term care segment of the market. Now turning to guidance. The company will not provide revenue guidance for 2025, but can provide expense guidance for the year.

[Henry Du, Interim CFO, VP of Finance & Accounting at Alpha Cognition]

For the full year 2025, the company expects operating expenses to range from $38,000,000 to $42,000,000 In summary, while we face increased costs in 2024, these investments were essential to positioning AquaGuard ignition for future growth and success. We remain focused on executing our strategic priorities and delivering value to our stakeholders. With that, I will now turn the call over to Lauren to discuss commercial progress.

[Lauren D'Angelo, COO at Alpha Cognition]

Thanks, Henry. The first quarter of twenty twenty five has been transformational for AlphaCognition. The launch of Zendaya in The U. S. Long term care market represents a significant milestone and I'm pleased to report that our commercial execution has been strong.

[Lauren D'Angelo, COO at Alpha Cognition]

During the first quarter, our commercial team completed meetings with the large payers and updated our previous market research on pricing. The feedback from payers was consistent with previous research indicating a need for new therapies and a price range consistent with the branded product on the market. The team is actively engaging with key payers to submit Medicare bids for the twenty twenty six year. We announced wholesale acquisition price in January of $749 per month. We believe this is a competitive price that balances product differentiation with pricing of other branded products in the market.

[Lauren D'Angelo, COO at Alpha Cognition]

Regarding the commercial team, during the quarter, we hired our commercial leaders who bring significant experience to the company. This exceptional team brings a combined three thirty years commercial experience, one hundred and fifty years in long term care and 140 product launches. Additionally, we hired our four sales leaders with significant CNS and LTC experience and then concluded the hiring of our field sales team in mid Q1. The caliber of talent we've assembled with this sales force truly is exceptional. Collectively, our sales force has an average of sixteen years industry sales experience and ten years in long term care.

[Lauren D'Angelo, COO at Alpha Cognition]

We officially launched the product on March nineteen of this year. With less than two weeks on the market, we are pleased with the positive feedback we are hearing from prescribers and expect that to translate to a strong initial demand for the product. Customers have proactively expressed interest in Zenveil and we are working through their initial pharmacy orders and formulary process to gain access to Zenveil. We expect this to continue over the next several weeks leading to a positive early uptake. With market access, we've made significant progress in engaging with key payers to secure coverage ensuring that Zundail is accessible to patients who need it most.

[Lauren D'Angelo, COO at Alpha Cognition]

Our experienced regional sales leaders supported by an experienced high performing sales force are successfully engaging with healthcare providers across the key long term care networks. From a marketing perspective, our targeted campaigns and physician education initiatives are driving strong brand awareness and interest. Our commercial infrastructure has been optimized for scale, ensuring that we can continue to meet growing demand. As we move into Q2 and beyond, we remain focused on driving continued market penetration, expanding payer coverage and further strengthening our commercial execution. We are confident in our abilities to sustain this momentum and to deliver value to both patients and shareholders.

[Lauren D'Angelo, COO at Alpha Cognition]

Thank you to our incredible commercial team for their dedication and to our investors for their continued support. With that, I'll turn it over to Michael.

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you, Lauren. In summary, the team

[Michael McFadden, Director & CEO at Alpha Cognition]

is executing with commercialization efforts with

[Michael McFadden, Director & CEO at Alpha Cognition]

the full team hired on schedule. Schedule and on budget, and an ex U. S. Partnership activity that's off to a great start. The company believes we have a disruptive opportunity with Sunbelt and will focus the next quarters on our selling efforts, on financial discipline and on ex U.

[Michael McFadden, Director & CEO at Alpha Cognition]

S. Operational execution. Operator, we'll now take questions.

[Operator]

Thank you. We will now be conducting a question and answer session. Thank you. Your first question comes from Michael Freeman with Raymond James. Please go ahead.

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

Hi, good afternoon, Michael, Laura and Henry. Congratulations on closing out this big year and on your inaugural quarterly call. My first question is on coverage. I appreciate how intentional and organized you guys are with ensuring market access. I wonder how given these initial conversations, how you would see the timelines for first commercial agreements being concluded?

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

And will you be do you expect to be announcing these publicly?

[Lauren D'Angelo, COO at Alpha Cognition]

Sure. So I'll take that. Thank you for the question. So we are actively, as I shared, engaging with those key plans. The nice thing about the long term care space is there are five plans that represent greater than 75% of the patients.

[Lauren D'Angelo, COO at Alpha Cognition]

The feedback right now has been very, very positive. We're just completing our clinical presentations. As you probably know, CMS or Medicare runs on an annual. They're about twelve to eighteen months behind. So we're looking at, you know, coverage for next year.

[Lauren D'Angelo, COO at Alpha Cognition]

And when I say coverage, I mean, you know, actually on one of their their tiers. Right now, we are eligible to be covered by CMS and Medicare. It's just with prior authorization or a medical necessity form. We are looking to see if there will be any potential early adds this year. But right now, we plan to announce specific contracts starting early next year.

[Lauren D'Angelo, COO at Alpha Cognition]

Just to highlight again, with long term care, because many of these patients are dual eligibles, you actually don't need coverage to get Zunveil to the patient. And so right now, actually, especially as of April 1, CMS will cover our drug with a medical necessity or a prior authorization. But in the meantime, we are obviously working with these plans to try to get better coverage and contracts in place by early January '1 of next year. And that's the typical Medicare process.

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

All right. Thank you, Lauren. Thanks for that color. I wonder if I guess among your sales leaders and your on the ground sales force, I wonder if you could share some early feedback you've got from physicians in long term care and how might that feedback inform how you're thinking about the launch?

[Lauren D'Angelo, COO at Alpha Cognition]

Absolutely. And this I am thrilled to answer. We've actually had overwhelming feedback from the physicians that we've gotten to in the past. I know it's just a couple of weeks on the market. We've actually been holding national webinars where we've had quite a few more than I've seen in my career or in my launches this early on with physicians, big prescribers dialing into the national webinars to hear about our product.

[Lauren D'Angelo, COO at Alpha Cognition]

And of course, I'm talking to my sales leaders daily. The feedback is very strong. I think once the team is able to get through the Sunveil story, we really do bring a differentiated product to the market. So when we start talking about Sunveil's technology, the way, you know, that that we minimize absorption in the gut, you know, leading potentially leading to less GI, we talk about the insomnia attribute, The physicians are are literally saying you're gonna sell a ton of this. So we're, you know, we're feeling very good about the feedback.

[Lauren D'Angelo, COO at Alpha Cognition]

I think what we're focused on right now is just getting to as many prescribers as we can, you know, as we get out there and we execute. But overall, I think we're feeling very good about how the message is resonating with physicians.

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

All right. That's fabulous. Thank you. Maybe I'll shoehorn one last question. You recently had a very successful equity financing.

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

I wonder with the cash position you currently have, how much runway do you expect that this will provide you, especially given the OpEx guidance you just provided?

[Michael McFadden, Director & CEO at Alpha Cognition]

Yes. So we thank you, Michael, for the question. We anticipate that our spend on a year to year basis will be in the $38,000,000 to $42,000,000 range that Henry outlined. And while we're not providing revenue guidance, we anticipate with

[Michael McFadden, Director & CEO at Alpha Cognition]

a,

[Michael McFadden, Director & CEO at Alpha Cognition]

what I'll call a hockey stick uptick by this product or adoption by this product that we would be cash flow breakeven in year three of launch. So we believe the cash that we have currently is sufficient for us to move to breakeven status in the long term care segment of the business. Now the caveat is if the company chooses to expand in neurology or if the company has excellent feedback from the FDA that allows us to move into clinical programs for some of our pipeline assets, we would need to raise more capital. But for long term care commercialization efforts, the cash that we have currently is sufficient to move the company to breakeven.

[Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial]

Fantastic. Thanks very much for answering my questions. I'll pass the line now.

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you, Michael.

[Operator]

The next question comes from Dave Storms with Stonegate. Please go ahead with your question.

[Dave Storms, Director of Equity Research at Stonegate Capital Partners]

Hello, everyone. And thanks for taking my questions. Just wanted to start with your exciting partnership and wanted to see if there are any other geographies that you're looking at for maybe future partnerships thinking either in Asia or in the Greater Asia region or in Europe?

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you, David, for the call. The CMS partnership, one, we're very pleased with that. They have a great history of excellent partnerships with U. S. Pharmaceutical companies and other companies around the world.

[Michael McFadden, Director & CEO at Alpha Cognition]

And they've shown significant prowess in being able to commercialize those assets in China. They also have rights to a number of Asian or greater Asian companies, excluding Japan. So some of the smaller Asian countries, CMS will launch Zenbelt in those countries as they obtain approval. Additionally, we do believe that we can execute another partnership with another territory around the globe. We're in multiple conversations now and we believe one of those territories will emerge with a second deal for AlphaCognition in 2025.

[Michael McFadden, Director & CEO at Alpha Cognition]

This is the Alzheimer's market is significant in almost every territory around the world and we believe this is a product that can be partnered in different territories around the globe.

[Dave Storms, Director of Equity Research at Stonegate Capital Partners]

Understood. Very helpful. Thank you. And then just one more for me. You mentioned the cash flow breakeven target being year three.

[Dave Storms, Director of Equity Research at Stonegate Capital Partners]

Can you maybe go into a little more detail on what the major variables are to reaching that breakeven? Is it primarily just revenue based or are there other levers that can be pulled there?

[Michael McFadden, Director & CEO at Alpha Cognition]

Two primary levers. One is we have to execute on our selling efforts and the long term care marketplace. I've shared previously that we anticipate a hockey stick uptake for this type of product, meaning that doctors in 2025 will try the product, they'll gain experience with the product, they'll use more of the product if they have good experience. And then as their comfort level increases with them, they'll figure out a way to normalize the product into how they treat their patients with moderate Alzheimer's disease. So we have to execute on that side of the equation with our sales team, educating doctors, educating staff, making sure they understand the benefits that Zumvel can add to their treatment of moderate Alzheimer's patients.

[Michael McFadden, Director & CEO at Alpha Cognition]

On the expense side, we have to be diligent in managing our expenses as the company has been to date. We have to remain diligent as we launch and commercialize the asset. So we watch the expense line very carefully with this company. We'll have to continue to do that as we expand our footprint into long term care and look for efficiencies in how we work and how we execute our commercial plan. Those are the two primary drivers that we have to measure.

[Michael McFadden, Director & CEO at Alpha Cognition]

And if we execute according to our internal plans, we should be in a very good place in year three for this company.

[Dave Storms, Director of Equity Research at Stonegate Capital Partners]

Understood. Thank you for taking my questions. Congrats on the launch and good luck in Q1.

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you,

[Michael McFadden, Director & CEO at Alpha Cognition]

David.

[Operator]

Ladies and gentlemen, this now concludes our question and answer session. I would like to turn the floor back over to management for closing remarks.

[Michael McFadden, Director & CEO at Alpha Cognition]

Thank you, Drew. And thanks everyone for your interest in listening to the AlphaCognition Q4 earnings call. We remain optimistic about our commercialization opportunity with Zenveil. What we believe is a disruptive treatment for the treatment of mild to moderate Alzheimer's disease. The company has executed according to our plan in 2024 and in early twenty twenty five.

[Michael McFadden, Director & CEO at Alpha Cognition]

We remain focused on selling efforts on financial discipline and optimizing our ex US operational execution with our partner CMS. Thank you for attending the call and look forward to future communications with you as the company progresses. Thank you.

[Operator]

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Participants

Executives

• Henry Du, Interim CFO, VP of Finance & Accounting
• Michael McFadden, Director & CEO
• Lauren D'Angelo, COO

Analysts

• Michael Freeman, Equity Research Analyst - Healthcare at Raymond James Financial
• Dave Storms, Director of Equity Research at Stonegate Capital Partners