What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-08-08 · 68 added, 59 removed, 237 unchanged (35% of the section changed)

12 unchanged sentences

In blinded and unblinded clinical trials, several participants experienced asymptomatic, reversible elevations in serum liver chemistries prompting harmonization of monitoring, increasing frequency where appropriate, across our clinical trials.

In July 2024, we reported results from our Phase 2 SHINE trial, which showed a consistent trend in cognitive improvement in participants treated with CT1812 (pooled 100mg and 300mg) compared to placebo across all cognitive measures including ADAS-Cog 11, ADAS-Cog 13, cognitive composite and Mini-Mental State Examination scores.

The SPARC trial, results of which were published in January 2024 in the Journal of Alzheimer’s Research & Therapy, showed the ability of CT1812 to mitigate brain volume atrophy consistent with neurodegenerative disease.

In addition, there were signals of improvement in functional measures (ADCS-ADL and ADCS-CGIC).

8 unchanged sentences

The percentage of participants experiencing any adverse event was similar between the pooled CT1812 treatment arms (76.5%) and the placebo group (78%).

The majority of adverse events were mild or moderate in severity.

The majority of

adverse events were mild or moderate in severity.

In the placebo arm, 10% of participants experienced a serious adverse event (“SAE”) compared to approximately 5% in the combined CT1812 treated arms.

Among CT1812-treated participants, two experienced treatment-emergent SAEs in the 100mg group, including stomatitis, chronic constipation, and hip fracture

(all deemed not related to treatment) and three experienced treatment-emergent SAEs in the 300mg group, including hematuria, abdominal pain, and infection (all deemed not related to treatment) and recurrent presyncope (deemed related to treatment).

At the 300mg dose, nine participants experienced treatment-emergent liver enzyme test (“LFT”) increases (greater than 3xULN), which subsided after cessation of drug without evidence of serious liver injury.

Among CT1812-treated participants, two experienced treatment-emergent SAEs in the 100mg group, including stomatitis, chronic constipation, and hip fracture (all deemed not related to treatment) and three experienced treatment-emergent SAEs in the 300mg group, including hematuria, abdominal pain, and infection (all deemed not related to treatment) and recurrent presyncope (deemed related to treatment).

At the 300mg dose, ten participants (nine at scheduled visits and one at an unscheduled visit) experienced treatment-emergent liver enzyme test (“LFT”) increases (greater than 3xULN) that subsided after cessation of drug without evidence of serious liver injury.

There were no LFT elevations observed in the 100mg dose.

The SHINE study was designed with several pre-planned analyses to further our understanding of CT1812’s mechanism of action and its impact on certain biomarker-defined subgroups.

Results of a pre-specified analysis based on participants’ blood levels of p-tau217 at baseline were reported at the Clinical Trials in Alzheimer’s Disease (CTAD) conference in October 2024.

Individuals with lower Alzheimer’s disease pathology at baseline as reflected by lower levels of plasma p-tau217 have been shown to have a greater response to amyloid-based therapies.

This analysis demonstrated that CT1812-treated participants with plasma p-tau217 below the median of 1.0 pg/mL experienced a 95% slowing in rate of cognitive decline on the ADAS-Cog 11 scale and 108% decline on the MMSE.

The placebo-treated participants with below-median p-tau217 declined almost 3 points on the ADAS-Cog 11 scale by the end of the study.

Placebo patients in both analyses experienced cognitive decline.

We have enrolled 130 patients in the Phase 2 COG1201 (SHIMMER) study of CT1812 in mild-to-moderate dementia with Lewy bodies, or DLB.

1 unchanged sentence

Clinical endpoints of the trial include safety and physical activity measurements, cognitive assessments, and PK and pharmacodynamic biomarker analyses compared to baseline measurements recorded at the beginning of the trial.

In addition, cerebrospinal fluid will be collected and analyzed for α-synuclein content and established patterns of differential protein expression.

In addition, as an exploratory analysis, cerebrospinal fluid will be collected and analyzed for α-synuclein content and established patterns of differential protein expression.

This study is not powered to show significance in the efficacy endpoints.

1 unchanged sentence

Since our inception in 2007, we have incurred significant operating losses and devoted substantially all of our time and resources to developing our lead product candidate, CT1812, building our intellectual property portfolio, raising capital and recruiting management and technical staff to support these operations.

As of June 30, 2024, we had an accumulated deficit of $157.4 million.

We incurred a net loss of $7.0 million and $16.2 million for the three and six months ended June 30, 2024, respectively, and net loss of $4.7 million and $10.9 million for the three and six months ended June 30, 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $167.3 million.

We incurred a net loss of $9.9 million and $26.1 million for the three and nine months ended September 30, 2024, respectively, and net loss of $6.7 million and $17.6 million for the three and nine months ended September 30, 2023, respectively.

To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging (the “NIA”), a division of the National Institutes of Health (the “NIH”), and proceeds from our initial public offering (the “IPO”), completed in October 2021, proceeds from our follow-on public offerings, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity (“SAFE”) and stock option exercises.

Since our inception, we have received approximately $171.0 million in cumulative grant awards to fund our clinical trials, primarily from the NIA, and we have raised approximately $126.4 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO and follow-on public offerings, ATM, and equity line financing with Lincoln Park.

As of June 30, 2024, we had cash and cash equivalents of $28.5 million.

As of September 30, 2024, we had cash and cash equivalents of $22.0 million.

To date, $53.6 million of the cumulative grant funds remain available.

2 unchanged sentences

(the “Sales Agents”), providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).

We sold 191,273 shares of common stock under the ATM during the six months ended June 30, 2024 for gross proceeds of approximately $0.4 million.

As of June 30, 2024, there was approximately $34.3 million of common stock remaining available for sale under the ATM.

We sold 864,404 shares of common stock under the ATM during the nine months ended September 30, 2024 for gross proceeds of approximately $0.9 million.

As of September 30, 2024, there was approximately $33.8 million of common stock remaining available for sale under the ATM.

On March 10, 2023, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Lincoln Park Purchase Agreement”).

The Lincoln Park Purchase Agreement provides that, subject to the terms and conditions set forth therein, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $35.0 million of shares of common stock at our sole discretion, over a 36-month period commencing on March 10, 2023.

The Lincoln Park Purchase Agreement provides that, subject to the terms and conditions set forth therein, we have the right, but not the obligation, to direct Lincoln Park

to purchase up to $35.0 million of shares of common stock at our sole discretion, over a 36-month period commencing on March 10, 2023.

We filed a prospectus supplement to our registration statement on Form S-3 (File No.

333-268992) covering the resale of shares of common stock that are issued under the Lincoln Park Purchase Agreement.

During the six months ended June 30, 2024, we did not sell any shares of common stock to Lincoln Park.

As of June 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

During the nine months ended September 30, 2024, we did not sell any shares of common stock to Lincoln Park.

As of September 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we completed our follow-on public offering, pursuant to which we issued and sold 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

1 unchanged sentence

In connection with the follow-on public offering, we received net proceeds of approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses.

and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

We expect to continue to incur significant and increasing expenses and net losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates.

22 unchanged sentences

Research and development expenses consist primarily of direct and indirect costs incurred for our research activities, including development of our drug discovery efforts and the development of our product candidates.

Direct costs include

laboratory materials and supplies, contracted research and manufacturing, clinical trial costs, consulting fees, and other expenses incurred to sustain our research and development program.

Direct costs include laboratory materials and supplies, contracted research and manufacturing, clinical trial costs, consulting fees, and other expenses incurred to sustain our research and development program.

Indirect costs include personnel-related expenses, consisting of employee salaries, related benefits, and stock-based compensation expense for employees engaged in research and development activities, facilities, and other expenses consisting of direct and allocated expenses for rent and depreciation, and lab consumables.

14 unchanged sentences

The grants awarded relate to agreed upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to contract research organizations (“CROs”), research institutions and /or consortiums involved in the grant, as well as facilities and administrative costs.

These grants are cost plus fixed fee arrangements in which we are reimbursed for eligible direct and indirect costs over time, up to the maximum amount of each specific grant award.

These grants are cost plus fixed fee arrangements in which we

are reimbursed for eligible direct and indirect costs over time, up to the maximum amount of each specific grant award.

Only costs that are allowable under the grant award, certain government regulations and the NIH’s supplemental policy and procedure manual may be claimed for reimbursement, and the reimbursements are subject to routine audits from governmental agencies from time to time.

As of June 30, 2024, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

As of September 30, 2024, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Our clinical trials have been funded by approximately $171.0 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203-START) study of CT1812 in participants with early-stage AD, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201-SHINE) study of CT1812 in participants with mild-to-moderate AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of CT1812 in participants with dementia with Lewy bodies.

4 unchanged sentences

Results of Operations

Comparison of the Three Months Ended June 30, 2024 and 2023

Comparison of the Three Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Operating Expenses:

9 unchanged sentences

The following table summarizes our research and development expenses (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Clinical programs

2 unchanged sentences

Other expense

Research and development expenses were $11.6 million for the three months ended June 30, 2024, compared to $8.5 million for the three months ended June 30, 2023.

The increase of $3.1 million was primarily due to the following:

Research and development expenses were $11.4 million for the three months ended September 30, 2024, compared to $11.7 million for the three months ended September 30, 2023.

The decrease of $0.3 million was primarily due to the following:

● an increase of $2.6 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

3 unchanged sentences

General and Administrative Expenses

General and administrative expenses were $3.1 million for the three months ended June 30, 2024, compared to $3.3 million for the three months ended June 30, 2023.

The decrease of $0.2 million in general and administrative expenses was driven by lower professional services.

General and administrative expenses were $3.1 million for the three months ended September 30, 2024, compared to $3.1 million for the three months ended September 30, 2023.

The change in general and administrative expenses was not significant period over period.

Other Income (Expense)

Grant income was $7.3 million for the three months ended June 30, 2024, compared to $6.9 million for the three months ended June 30, 2023.

The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2024 as compared to 2023.

Grant income was $4.3 million for the three months ended September 30, 2024, compared to $7.7 million for the three months ended September 30, 2023.

The change in grant income is correlated with the decrease in eligible reimbursable costs related to clinical trials incurred during 2024 as compared to 2023.

Other Income, Net

Other income, net was $0.3 million for the three months ended June 30, 2024, compared to other income, net of $0.2 million for the three months ended June 30, 2023.

The change in other income, net was driven primarily by interest earned on money market funds.

Other income, net was $0.2 million for the three months ended September 30, 2024, compared to other income, net of $0.3 million for the three months ended September 30, 2023.

The decrease in other income, net was driven primarily by lower interest earned on money market funds.

Interest Expense

Interest expense was less than $0.1 million for the three months ended June 30, 2024, compared to interest expense of less than $0.1 million for the three months ended June 30, 2023.

Interest expense was less than $0.1 million for the three months ended September 30, 2024, compared to interest expense of less than $0.1 million for the three months ended September 30, 2023.

Interest expense was not significant in either period.

Comparison of the Six Months Ended June 30, 2024 and 2023

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Expenses:

10 unchanged sentences

The following table summarizes our research and development expenses (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Clinical programs

3 unchanged sentences

Total research & development expenses

Research and development expenses were $ 22.1 million for the six months ended June 30, 2024, compared to $13.9 million for the six months ended June 30, 2023.

Research and development expenses were $ 33.5 million for the nine months ended September 30, 2024, compared to $25.6 million for the nine months ended September 30, 2023.

The increase of $ 7.9 million was primarily due to the following:

1 unchanged sentence

● an increase of $1.4 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● an increase of $0.6 million in manufacturing related to higher costs with contract manufacturing organizations for the replenishment of clinical trial supply;

● a decrease of $1.6 million in manufacturing related to lower costs with contract manufacturing organizations for the production of pre-clinical and future clinical trial supply;

● a decrease of $2.3 million in preclinical programs and other expense, primarily due to decreased research activities.

General and Administrative Expenses

General and administrative expenses were $6.7 million for the six months ended June 30, 2024, compared to $6.9 million for the six months ended June 30, 2023.

General and administrative expenses were $9.7 million for the nine months ended September 30, 2024, compared to $9.9 million for the nine months ended September 30, 2023.

The decrease of $0.2 million in general and administrative expenses was driven by lower professional services.

Other Income (Expense)

Grant income was $12.2 million for the six months ended June 30, 2024, compared to $10.4 million for the six months ended June 30, 2023.

The change in grant income is correlated with the increase in eligible reimbursable costs incurred during 2024 as compared to 2023.

Grant income was $16.5 million for the nine months ended September 30, 2024, compared to $18.0 million for the nine months ended September 30, 2023.

The change in grant income is correlated with the decrease in eligible reimbursable costs incurred during 2024 as compared to 2023.

O ther Income (Expense), Ne t

Other income, net was $0.6 million for the six months ended June 20, 2024, compared to other expense, net of $0.4 million for the six months ended June 30, 2023.

The change in other income (expense), net was driven primarily by interest earned on money market funds, as well as prior year expenses related to the Lincoln Park Purchase Agreement.

Other income, net was $0.8 million for the nine months ended September 30, 2024, compared to other expense, net of $0.1 million for the nine months ended September 30, 2023.

The increase in other income (expense), net was driven primarily by interest earned on money market funds, as well as prior year expenses related to the Lincoln Park Purchase Agreement not repeated in 2024.

Interest Expense

Interest expense was less than $0.1 million for the six months ended June 30, 2024, compared to interest expense of less than $0.1 million for the six months ended June 30, 2023.

Interest expense was less than $0.1 million for the nine months ended September 30, 2024, compared to interest expense of less than $0.1 million for the nine months ended September 30, 2023.

Interest expense was not significant in either period.

7 unchanged sentences

On December 23, 2022, we entered into a sales agreement with the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in ATM offerings.

As of June 30, 2024, we sold 3,050,347 shares of common stock under the ATM for gross proceeds of approximately $5.7 million.

As of June 30, 2024, there was $34.3 million of common stock remaining available for sale under the ATM.

As of September 30, 2024, we sold 3,723,478 shares of common stock under the ATM for gross proceeds of approximately $6.2 million.

As of September 30, 2024, there was $33.8 million of common stock remaining available for sale under the ATM.

In addition, in March 2023, we entered into the Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, giving the Company the right, but not the obligation to sell to Lincoln Park up to $35.0 million worth of shares of our common stock.

As of June 30, 2024, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of June 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

As of September 30, 2024, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of September 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we closed a follow-on public offering of 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

1 unchanged sentence

The net proceeds were approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

As of June 30, 2024, we had $28.5 million in cash and cash equivalents and have not generated positive cash flows from operations.

As of September 30, 2024, we had $22.0 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that our existing cash and cash equivalents, and income from non-dilutive grants, will be sufficient for us to fund our operating expenses and capital expenditures into the second quarter of 2025, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

We have based these estimates on assumptions that may prove to be incorrect or require adjustment as a result of business decisions, and we could utilize our available capital resources sooner than we currently expect.

As of August 8, 2024, the date of issuance of this Quarterly Report, we believe that our cash and cash equivalents as of June 30, 2024 is not sufficient to fund operations for the period through one year after the date of this filing and therefore we have concluded that substantial doubt exists about our ability to continue as a going concern.

As of November 13, 2024, the date of issuance of this Quarterly Report, we believe that our cash and cash equivalents as of September 30, 2024 is not sufficient to fund operations for the period through one year after the date of this filing and therefore we have concluded that substantial doubt exists about our ability to continue as a going concern.

To execute our business plans, we will need substantial funding to support our continuing operations and pursue our growth strategy.

4 unchanged sentences

Future Funding Requirements

We anticipate that we will need to raise additional funding in the future to fund our operations, including continuing and completing our clinical trials.

12 unchanged sentences

● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

● our ability to maintain the listing of our common stock on the Nasdaq Global Market;

● the additional costs we may incur as a result of operating as a public company, including our efforts to enhance operational systems and hire additional personnel, including enhanced internal controls over financial reporting.

4 unchanged sentences

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and preferred equity financing, if

available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.

6 unchanged sentences

The following table summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows used in operating activities

4 unchanged sentences

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2024 was $13.2 million, which consisted primarily of a net loss of $16.2 million, offset primarily by the impact of equity-based compensation of $2.3 million and a net change of $0.3 million in operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2024 was $20.1 million, which consisted primarily of a net loss of $26.1 million, offset primarily by the impact of equity-based compensation of $3.2 million and a net change of $2.4 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to an increase in grant receivables of $2.1 million, an increase in accounts payable and accrued expenses of $3.6 million, a decrease in prepaid expenses and other assets of $1.6 million, and a decrease in deferred grant income and other liabilities of $0.7 million.

Net cash used in operating activities for the six months ended June 30, 2023, was $6.4 million, which consisted primarily of a net loss of $10.9 million, offset primarily by the impact of equity-based compensation of $2.2 million and a net change of $1.9 million in operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2023 was $10.6 million, which consisted primarily of a net loss of $17.6 million, offset primarily by the impact of equity-based compensation of $3.3 million and a net change of $3.3 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to a decrease in grant receivables of $2.0 million, a decrease in prepaid expenses and other assets of $1.0 million, an increase in accounts payable and accrued expenses of $1.8 million, and a decrease in deferred grant income and other liabilities of $1.4 million.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 and 2023 was less than $0.1 million and less than $0.1 million, respectively.

Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was less than $0.1 million and $0.1 million, respectively.

Overall, the change in net cash used in investing activities was insignificant.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2024 and 2023 was $11.9 million and $2.1 million, respectively.

Net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was $12.2 million and $2.1 million, respectively.

The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock in our follow-on offering in March 2024 and under the ATM program.

Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2024 (in thousands):

The following table summarizes our contractual obligations as of September 30, 2024 (in thousands):

Operating lease obligations:

Other obligations:

In October 2023, we entered into an insurance premium financing arrangement with a lender whereby we financed $0.7 million of certain premiums at a 8.65% annual interest rate.

Payments of less than $0.1 million are due monthly from October 2023 through September 2024.

As of September 30, 2024, there was no remaining outstanding principal on the loan.

In October 2024, we entered into an insurance premium financing arrangement with the same lender whereby we financed $0.4 million of certain premiums at a 8.65% annual interest rate.

Payments of less than $0.1 million are due monthly from November 2024 through August 2025.

We have entered into an operating leases for office and laboratory facilities under agreements that run through May 31, 2029.

29 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis