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Cognition Therapeutics Adjusts to Study Results and Price Target

On Wednesday, investment firm H.C. Wainwright revised its price target for Cognition Therapeutics (NASDAQ:CGTX), a company focused on developing treatments for Alzheimer’s disease. The new target has been set at $7.00, a decrease from the prior target of $10.00, although the firm has maintained a Buy rating on the stock.

This update comes on the heels of Cognition Therapeutics’ announcement regarding the Phase 2 results from its SHINE study for CT1812, a novel treatment aimed at addressing Alzheimer’s disease. The study indicated that participants administered CT1812 over a six-month period exhibited a consistent trend of cognitive enhancement relative to those who received a placebo.

The cognitive improvements were assessed using several evaluation tools, including ADAS-Cog11, ADAS-Cog13, cognitive composite scores, and the Mini Mental State Examination (MMSE). Additionally, there were signs pointing to functional improvements among participants.

The findings from the SHINE study were showcased at the Alzheimer’s Association International Conference held on July 29, 2024, in Philadelphia, PA. The study involved 153 adults diagnosed with mild to moderate Alzheimer’s, who were randomly assigned to receive either 100mg or 300mg of CT1812 or a placebo on a daily basis. Statistical significance was noted at Day 98, the midway mark of the study, particularly for the ADAS-Cog11 and MMSE endpoints.

At the end of the study period, Day 182, it was observed that participants in the placebo group had experienced an average decline of approximately 2.70 points on the ADAS-Cog11 scale. In contrast, those treated with CT1812 experienced an average decline of only 1.66 points, thus reflecting a 39% slower rate of cognitive decline in the treatment group.

However, it’s important to note that CT1812 did not achieve statistical significance for the initial secondary efficacy endpoints when the combined results of the 100mg and 300mg dosage groups were compared to the placebo group.

The updated price target by H.C. Wainwright factors in an increased discount rate of 15%, up from 14%, along with a rise in the estimated probability of CT1812 receiving approval for treating mild Alzheimer’s disease, now set at 35%, an increase from the previous estimate of 30%. Despite the downward revision of the price target, H.C. Wainwright continues to express a positive outlook on Cognition Therapeutics’ stock.

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