DALLAS, TX -- January 30th, 2025 -- Alpha Cognition Inc. (NASDAQ: ACOG): Stonegate Capital Partners initiates their coverage on Alpha Cognition Inc. (NASDAQ: ACOG). Alpha Cognition Inc. reported significant progress in 2024 so far, marked by key financial and corporate milestones. Alpha Cognition received approval for its flagship Alzheimer’s therapy ZUNVEYL (benzgalantamine), successfully raised ~$54.5M in financing, and completed the necessary preparations for listing on the NASDAQ exchange. These initiatives have positioned the Company to launch ZUNVEYL in 1Q25, with an in place sales force, sufficient funding and commercial production already underway.
Flagship Product: ZUNVEYL, Alpha Cognition’s lead drug, received FDA approval in July 2024 for mild-to-moderate Alzheimer’s disease (AD), making it only the second oral AD therapy approved this decade. Unlike traditional treatments, ZUNVEYL is designed to bypass GI absorption, significantly reducing nausea, vomiting, diarrhea, and insomnia, which often lead to treatment discontinuation. The Company is preparing for its U.S. commercial launch while also expanding globally. Additionally, Alpha Cognition is partnering with the Department of Defense to study ZUNVEYL’s potential in treating traumatic brain injury (TBI), a condition with no FDA-approved treatments, further expanding ZUNVEYL’s potential impact.
Market Opportunity: Alzheimer’s disease (“AD”) affects 7 million people in the U.S., with 11 million prescriptions written annually, yet 55% of patients discontinue treatment within a year due to severe side effects. The initial target market for ZUNVEYL is the long-term care (LTC) market which represents 36% of AD prescriptions (~$2B market) but lacks differentiated, well-tolerated treatment options. ZUNVEYL stands out by offering fewer side effects and better cognitive benefits through its unique prodrug mechanism. With 65-70% of LTC patients having access to zero dollar co-pay, adoption potential is very high.
Go to Market: Alpha Cognition is set to launch ZUNVEYL in 1Q25, focusing on the LTC sector. A 33-person sales team will cover over 80% of LTC providers, with pricing and distribution fully in place to ensure broad accessibility. Physicians have expressed high willingness (88%) to prescribe ZUNVEYL, given its superior safety and efficacy profile. The Company has also secured a $44M licensing deal with China Medical Systems Holdings, further solidifying a global expansion strategy. With a strong sales infrastructure, clear market demand, and differentiated product profile, ZUNVEYL is poised for rapid adoption and long-term commercial success.
Strong Management: ACOG boasts a robust management team led by CEO Michael McFadden and COO Lauren D'Angelo, both bringing extensive experience in drug discovery and commercialization. Collectively, the entire team brings in over 350 years of commercial expertise, including 150 years in the long-term care market, and a track record of 140 successful launches.
Financial Performance and Balance Sheet: Alpha Cognition reported a robust balance sheet in the 2Q24. The Company had cash and cash equivalents of $3.7M, providing a solid foundation for its upcoming commercial activities. Pro forma ACOG has added ~$50.0M to cash following its November upsized public offering.
Valuation: We use a DCF Model to guide our valuation. Our DCF analysis produces a valuation range of $30.07 to $40.89 with a mid-point of $34.79. More information can be found in the Valuation section of this report.
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