By Lisa Thompson



Alpha Cognition, Inc. ACOGF published its 2021 operating and financial results on April 28, 2022 and simultaneously filed its annual report on SEDAR.

Fourth quarter and year-to-date highlights include:

➢ Acceptance of Investigational New Drug Application (IND) for ALPHA-1062 in mild to moderate AD – September 2021

➢ Closing of a C$14.4 million public offering1 – October 2021

➢ Formation of the Scientific Council – October 2021

➢ Investor Relations Agreements – October 2021

➢ CEO Update – October 2021

➢ Cedric O’Gorman, MD, MBA appointed Medical Director – December 2021

➢ Preclinical functional data for ALPHA-1062 in TBI – December 2021

➢ Preclinical histological data for ALPHA-1062 in TBI – February 2022

➢ Preclinical data for Alpha-0602 announced – March 2022

For calendar year 2021 versus calendar year 2020, both ending December 31st:

➢ No revenue was generated during either period;

➢ Research and development expenses totaled $8.0 million, up 71% from $4.7 million due to increased activity in the development of Alpha-1062 and Alpha-0602;

➢ General and administrative expenses increased 129% to $4.1 million from $1.8 million due to the addition of new management and staff, additional consulting services from relationship companies investors, increased accounting and legal costs related to the closing of the business combination with ACI Canada, and increased stock-based compensation, among other lesser factors;

➢ Total operating expenses increased by 87% from $6.5 million to $12.1 million;

➢ Net other items were ($7.4) million, dominated by loss on remeasurement of derivative liability related to warrants;

➢ Net loss was ($19.5) million versus ($5.8) million or ($0.37) and ($0.13) per share, respectively.

As of December 31, 2021, cash and cash equivalents totaled $11.3 million. This amount compares to $5.9 million at the end of December 2020. In terms of debt, Alpha Cognition carries a promissory note issued in March 2015 to Neurodyn Life Sciences for the acquisition of Alpha-1062 held on the balance sheet at 1, $1 million. Cash used in operations for 2021 was ($9.9) million, compared to cash used of ($14.7) million in 2020. Financing cash flow totaled $14.9 million , supported by funds generated from share issuances and warrant exercises, partially offset by share issuance costs and interest paid. on promissory notes.

Next steps of Alpha Cognition

➢ Alpha-0602 preclinical results (gene therapy) – March 2022

➢ Addition of Don Kalkofen as CFO – April 2022

➢ Results of the Alpha-1062 pivotal trial in AD – 2Q:22

➢ Start of Alpha-1062 patient tolerance study in AD – 2Q:22

➢ FDA meeting to discuss ongoing development of Alpha-1062 – mid-2022

➢ NDA submission for Alpha-1062 in AD – 3Q:22

➢ IND Submission for Alpha-1062 in Light TBI – 4Q:22

➢ Preclinical study Alpha-0602 (2n/a mammal) start – 4Q:22

➢ Potential FDA approval of Alpha-1062 for mild to moderate AD – 2Q:23

➢ First results of the Alpha-1062 patient tolerance study in AD – 2Q:23

➢ Alpha-0602 2nd Results of Preclinical Study in Mammals – 2Q:23

➢ Potential label change Alpha-1062 – 4Q:23

➢ Initiation of the study on the combination Alpha-1062 (BABE) – 4Q:23

Alpha-1062 Mild Traumatic Brain Injury (mTBI) Program

Alpha-1062 is being studied in the treatment of mild traumatic brain injury and is in preclinical development. According to data from Management of Concussion and Mild Traumatic Brain Injury 2020, three million people are affected by this condition in the United States each year. Unlike the oral form administered for AD, Alpha-1062 for mTBI will be administered using a nasal spray. A mammalian model is being studied to determine the neurobehavioral and cognitive improvement of drug treatment, compared to untreated injured and uninjured cohorts in a three-arm study. In December, neurobehavioral and cognitive improvement results were released and demonstrated statistically significant improvement in treated animals compared to their untreated counterparts. In addition, results for treated injured animals scored equal to those of uninjured animals in four of the five major neurobehavioral endpoints. Additional histology work was discussed in a press release and analyst call and will be presented at an upcoming conference. The results showed a dramatic advantage of Alpha-1062 where enough brain tissue was saved in treated animals compared to vehicle. All of the necessary studies for the IND have been completed and the next steps are to meet with the FDA, which should happen in the latter part of 2Q:22. If the IND is cleared by the FDA, the mTBI program could move immediately to a phase II study.

Summary results of the histological preclinical study of Alpha-1062 versus vehicle in TBIm announced in February 2022. The results of the trial demonstrated:

➢ Statistically significant reduction in the size of the lesions measured at 35 days after the injury;

➢ Hippocampal structure preserved;

➢ Statistically significant reduction in neuronal cell loss. The number of neurons in animals treated with Alpha-1062 was equivalent to that of the cohort of uninjured animals at the end of treatment;

➢ Statistically significant improvement in neurogenesis, as evidenced by an increase in the number of neuronal precursor cells and new neurons in the dentate gyrus, which plays a critical role in learning, information processing and regulation of mood.

Program update Alpha-0602

In February 2020, Alpha-0602 received orphan drug designation from the FDA for the treatment of amyotrophic lateral sclerosis (ALS). This was followed by other live and in vitro preclinical work

On March 29, 2022, Alpha Cognition announced positive preclinical data for its progranulin program designated Alpha-0602 for the treatment of ALS. The study evaluating Alpha-0602 demonstrated “abundant” expression of progranulin in motor neurons and decreased motor neuron cell death when observed in in vitro models. When evaluating live response patterns to Alpha-0602, the candidate reversed motor neuron toxicity resulting from suboptimal levels of TDP-43 and Fused-In-Sarcoma (FUS). In an ALS mouse model, Alpha-0602 was delivered using an adeno-associated virus (AAV) vector, was successfully transduced into central nervous system (CNS) cells, and was able to increase progranulin levels in cerebrospinal fluid (CSF). During the treatment period, the mice gained weight throughout the 10 week study unlike the untreated animals which did not. The study researchers use weight gain as an indicator of the therapeutic benefit of Alpha-0602.

Additional preclinical work for Alpha-0602 is ongoing and expected to be completed in 2Q:22, after which safety studies will be initiated in animal models. The objective of this work is to prepare an IND application to be filed with the FDA in 2H:22. Alpha Cognition plans to conduct Phase I to Phase III trials for the use of progranulin or its granulin epithelin modules (GEMs) in the treatment of ALS.

Management changes

On April 12, 2022, Alpha Cognition filed a press release stating that it had replaced its CFO Jeremy Wright contract with permanent CFO Don Kalkofen. Mr. Kalkofen was previously Chief Financial Officer of Protagonist Therapeutics PTGX. He earned his bachelor’s degree in accounting from Washington State University and is a CPA and Certified Global Management Accountant. The press release then announced that Michael McFadden, the company’s CEO, had been named to the board.

Start of coverage

March 7and, 2022, we launched a cover on Alpha Cognition. In the report, we provide a review of Alzheimer’s disease, its prevalence, its mortality rate compared to other common diseases, and its economic impact. We then turn to other aspects of the disease, including its etiology, diagnosis, and mechanism of neurotransmission that are key to understanding galantamine’s mechanism of action. A review of other products approved for AD is provided, including several in development. Alpha Cognition’s 505(b)(2) approval pathway is also described. Following this background, we present Alpha-1062, providing the drug’s history, mechanism of action, most common side effects, and observed benefits as promulgated in a wide range of clinical research. Our report then moves on to a brief description of the other programs in the company’s portfolio. The following sections discuss Alpha Cognition’s intellectual property rights and patents and provide a financial and operational review of the business, including next steps, and present direction. Business risks are highlighted with a summary of peers and competitors and their market size. We conclude our review with a detailed discussion of our assumptions underlying the company’s valuation.

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1. Alpha Cognition successfully raised C$14.4 million in gross proceeds, selling 9.6 million shares at C$1.50 and issuing 9.6 million warrants with a price of CA$1.75 exercise. 660,000 broker warrants were also issued, each entitling its holder to purchase one share at C$1.50.

2. January 2022 Corporate presentation

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