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What changed in COGNITION THERAPEUTICS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of COGNITION THERAPEUTICS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+398 added−391 removedSource: 10-K (2024-03-26) vs 10-K (2023-03-23)

Top changes in COGNITION THERAPEUTICS INC's 2023 10-K

398 paragraphs added · 391 removed · 342 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

151 edited+19 added−18 removed284 unchanged
Biggest changeWe are currently engaged in preclinical development activities for this indication, including studies to elucidate the key mechanisms by which CT1812 and the S2R complex alter the biological processes that contribute to dry AMD. 24 Table of Contents Early proof-of-concept studies with CT1812 indicate a role of S2R modulators in rescuing key aspects of dry AMD including maintaining homeostatic functions of RPEs, ameliorating lysosomal dysfunction and preventing RPE cell death.
Biggest changeEarly proof-of-concept studies with CT1812 indicate a role of S2R modulators in rescuing key aspects of dry AMD including maintaining homeostatic functions of RPEs, ameliorating lysosomal dysfunction and preventing RPE cell death. PK assessment indicates that we can achieve therapeutic levels (>80% receptor occupancy) of CT1812 in retinal tissue through oral administration.
Our goal is to develop disease modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the sigma 2 receptor, or S2R, which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.
Our goal is to develop disease modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor, or S2R, which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.
The clinical trials we have conducted to date have enabled us to evaluate the safety profile of CT1812, as well as validate its mechanism through proof-of- concept trials and conduct initial assessments of its therapeutic potential. The following is the status of our completed and ongoing clinical trials.
The clinical trials we have conducted to date have enabled us to evaluate the safety profile of CT1812, as well as validate its mechanism through proof-of-concept trials and to conduct initial assessments of its therapeutic potential. The following is the status of our completed and ongoing clinical trials.
COG0105 — Phase 1 (SPARC) Trial The COG0105 SPARC study is a randomized, double-blind, placebo-controlled Phase 1 clinical trial of 23 patients with mild-to-moderate AD. The primary objectives of the study were to evaluate CT1812 for safety and tolerability.
COG0105 — Phase 1 SPARC Clinical Trial The COG0105 SPARC study is a randomized, double-blind, placebo-controlled Phase 1 clinical trial of 23 patients with mild-to-moderate AD. The primary objectives of the study were to evaluate CT1812 for safety and tolerability.
Overview of the Disease AMD is the leading cause of blindness in people over 50 years of age in the United States, afflicting approximately 11 million people in the U.S., including an estimated 12% of all U.S. adults over 80 years of age. Dry AMD is a progressive condition and accounts for up to 90% of all AMD cases.
Overview of the Disease AMD is the leading cause of blindness in people over 50 years of age in the United States, afflicting approximately 11 million people in the United States, including an estimated 12% of all U.S. adults over 80 years of age. Dry AMD is a progressive condition and accounts for up to 90% of all AMD cases.
CT1812 blocked the binding and internalization of α-synuclein oligomers the neuronal synapses ​ The potential for S2R modulators to reverse the deleterious cellular effects of α-synuclein oligomers is also reflected in the in vitro analysis of LAMP2A expression presented below. LAMP2A is a critical component of chaperone-mediated autophagy, one of several processes that eliminate damaged cellular proteins.
CT1812 blocked the binding and internalization of α-synuclein oligomers in the neuronal synapses ​ The potential for S2R modulators to reverse the deleterious cellular effects of α-synuclein oligomers is also reflected in the in vitro analysis of LAMP2A expression presented below. LAMP2A is a critical component of chaperone-mediated autophagy, one of several processes that eliminate damaged cellular proteins.
Further, we believe that they corroborate our mechanism of action previously demonstrated in preclinical studies, providing the first evidence that our preclinical studies translate to patients with AD. 19 Table of Contents First evidence of target engagement in humans, which mirrors that found preclinically; and we believe this reinforces that our mechanism of action extends to patients with AD ​ COG0102 — Phase 1 Trial Our COG0102 study was a randomized, double-blind, placebo-controlled, Phase 1 clinical trial of 19 patients with mild-to-moderate AD.
Further, we believe that they corroborate our mechanism of action previously demonstrated in preclinical studies, providing the first evidence that our preclinical studies translate to patients with AD. 20 Table of Contents First evidence of target engagement in humans, which mirrors that found preclinically; and we believe this reinforces that our mechanism of action extends to patients with AD ​ COG0102 — Phase 1 Clinical Trial Our COG0102 study was a randomized, double-blind, placebo-controlled, Phase 1 clinical trial of 19 patients with mild-to-moderate AD.
Our competitors also may be in a position to obtain FDA or other regulatory approval for their products more rapidly, resulting in a stronger or dominant market position before we are able to enter the market. The key competitive factors affecting the success of all of our programs are likely to be product safety, efficacy, convenience and treatment cost.
However, our competitors also may be in a position to obtain FDA or other regulatory approval for their products more rapidly, resulting in a stronger or dominant market position before we are able to enter the market. The key competitive factors affecting the success of all of our programs are likely to be product safety, efficacy, convenience and treatment cost.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● the U.S. civil False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government; ● U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti- Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s 44 Table of Contents voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and ● the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; beginning in 2022, applicable manufacturers are required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● the U.S. civil False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government; ● U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti- Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and 45 Table of Contents ● the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; applicable manufacturers also are required to report such information regarding payments and transfers of value provided, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
To date, we have secured non-dilutive funds from the NIA, the Michael J. Fox Foundation and other groups to pursue our commonly aligned interests of developing therapeutics for neurodegenerative disorders. Taken together, the company has been awarded approximately $171.0 million in cumulative grants for the advancement of our pipeline programs.
To date, we have secured non-dilutive funds from the NIA, the Michael J. Fox Foundation and other groups to pursue our commonly aligned interests of developing therapeutics for neurodegenerative disorders. Taken together, the company has been awarded approximately $171 million in cumulative grants for the advancement of our pipeline programs.
According to the Parkinson’s Foundation and the Lewy Body Dementia Association, the direct healthcare costs for patients with PD and DLB are estimated to be approximately $25 billion and $31.5 billion per year, respectively. For PD, these direct medical costs include an estimated $2.5 billion for medications annually in the United States.
According to the Parkinson’s Foundation and the Lewy Body Dementia Association, the direct healthcare costs for patients with PD and DLB are estimated to be approximately $25 billion and $31 billion per year, respectively. For PD, these direct medical costs include an estimated $2 billion for medications annually in the United States.
We have initially focused on the development of CT1812 for the treatment of Alzheimer’s disease, or AD, by targeting β-amyloid, or Aβ, oligomers, which has been linked to the disease. We believe our evidence demonstrates that by binding to the S2R complex, CT1812 displaces Aβ oligomers from their neuronal receptors.
We have initially focused on the development of CT1812 for the treatment of Alzheimer’s disease, or AD, by targeting β-amyloid, or Aβ oligomers, which have been linked to the disease. We believe our evidence demonstrates that by binding to the S2R complex, CT1812 displaces Aβ oligomers from their neuronal receptors.
In addition to a battery of cognitive measures, we intend to use a variety of biomarkers to measure target engagement and assess changes in neurodegeneration and disease progression. We have received a grant of approximately $81.0 million from the NIA to fund this trial.
In addition to a battery of cognitive measures, we intend to use a variety of biomarkers to measure target engagement and assess changes in neurodegeneration and disease progression. We have received a grant of approximately $81 million from the NIA to fund this trial.
Sponsors typically use the meetings at the end of the Phase 2 clinical trial to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug.
Sponsors typically use the meetings at the end of the Phase 2 clinical trials to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug.
Moreover, as is illustrated in the graph below, CT1812 levels recorded in the retina were similar to those in the brain, suggesting that the doses used to achieve potential therapeutic levels in the retina needed to achieve efficacy will be similar to the doses for AD. 28 Table of Contents Similarities in CT1812 concentrations following oral administration in the brain and retina ​ ​ Additional studies have been conducted to elucidate the key mechanisms by which CT1812 and the S2R complex alter the biological processes that contribute to dry AMD.
Moreover, as is illustrated in the graph below, CT1812 levels recorded in the retina were similar to those in the brain, suggesting that the doses used to achieve potential therapeutic levels in the retina needed to achieve efficacy will be similar to the doses for AD. 29 Table of Contents Similarities in CT1812 concentrations following oral administration in the brain and retina ​ ​ Additional studies have been conducted to elucidate the key mechanisms by which CT1812 and the S2R complex alter the biological processes that contribute to dry AMD.
Our initial product candidates target diseases characterized by dysfunction or dysregulation of the S2R complex that leads to cellular degeneration, as observed in age-related degenerative diseases and disorders, such as AD, GA secondary to dry AMD, PD and DLB as depicted in the illustration below. ​ 12 Table of Contents Our Lead Product Candidate: CT1812 Our lead product candidate, CT1812, is an orally delivered, small molecule modulator that penetrates the blood-brain and blood-retina barriers and binds selectively to the S2R complex; and through its modulation of S2R restores normal function of synapses, as well as critical cellular processes such as autophagy, cholesterol biosynthesis, vesicle trafficking, progesterone signaling, lipid membrane-bound protein trafficking and receptor stabilization at the cell surface.
Our initial product candidates target diseases characterized by dysfunction or dysregulation of the S2R complex that leads to cellular degeneration, as observed in age-related degenerative diseases and disorders, such as AD, GA secondary to dry AMD, PD and DLB as depicted in the illustration below. ​ 13 Table of Contents Our Lead Product Candidate: CT1812 Our lead product candidate, CT1812, is an investigational orally delivered, small molecule modulator that penetrates the blood-brain and blood-retina barriers and binds selectively to the S2R complex; and through its modulation of S2R restores normal function of synapses, as well as critical cellular processes such as autophagy, cholesterol biosynthesis, vesicle trafficking, progesterone signaling, lipid membrane-bound protein trafficking and receptor stabilization at the cell surface.
Synucleinopathies are second only to AD in terms of neurodegenerative disease prevalence. In the United States, as many as one million people suffer from PD and an estimated 1.4 million from DLB.
Synucleinopathies are second only to AD in terms of neurodegenerative disease prevalence. In the United States, as many as 1 million people suffer from PD and an estimated 1.4 million from DLB.
As of March 1, 2023, this patent family includes granted patents claiming composition of matter of CT1812, pharmaceutical compositions of CT1812, methods of using CT1812 for inhibiting amyloid beta effects on a neuronal cell, and methods of using CT1812 to treat AD in the United States (three patents), Australia, Brazil, China, the European Union, Hong Kong, India, Israel, Japan, New Zealand, Mexico, South Korea, Russia and South Africa.
As of March 1, 2024, this patent family includes granted patents claiming composition of matter of CT1812, pharmaceutical compositions of CT1812, methods of using CT1812 for inhibiting amyloid beta effects on a neuronal cell, and methods of using CT1812 to treat AD in the United States (three patents), Australia, Brazil, China, the European Union, Hong Kong, India, Israel, Japan, New Zealand, Mexico, South Korea, Russia and South Africa.
In the retina, the S2R complex is expressed in several cell types including the RPE cells, photoreceptors and retinal ganglion cells. 10 Table of Contents The sigma-2 receptor (S2R) complex ​ Internal and third-party studies suggest that the role of PGRMC1 and TMEM97, the protein components of the S2R complex, regulate cell damage response processes, including cholesterol biosynthesis, vesicle trafficking, progesterone signaling, lipid membrane-bound protein trafficking and receptor stabilization at the cell surface.
In the retina, the S2R complex is expressed in several cell types including the RPE cells, photoreceptors and retinal ganglion cells. 11 Table of Contents The sigma-2 receptor (S2R) complex ​ Internal and third-party studies suggest that the role of PGRMC1 and TMEM97, the protein components of the S2R complex, regulate cell damage response processes, including cholesterol biosynthesis, vesicle trafficking, progesterone signaling, lipid membrane-bound protein trafficking and receptor stabilization at the cell surface.
Quantitative EEG and PET imaging agents as well as vMRI may have utility in several neurodegenerative disorders to measure synaptic function, synaptic density and brain atrophy, respectively. 11 Table of Contents Our Novel, Improved Conditioned Extracts (NICE) Screening Platform Chemical structures that we are currently evaluating as potential therapeutics for degenerative diseases originate from our NICE screening platform.
Quantitative EEG and PET imaging agents as well as vMRI may have utility in several neurodegenerative disorders to measure synaptic function, synaptic density and brain atrophy, respectively. 12 Table of Contents Our Novel, Improved Conditioned Extracts (NICE) Screening Platform Chemical structures that we are currently evaluating as potential therapeutics for degenerative diseases originate from our NICE screening platform.
Of this, approximately $81.0 million in cumulative non-dilutive grants have been awarded by the NIA to fund development of CT1812 for the treatment of AD.
Of this, approximately $81 million in cumulative non-dilutive grants have been awarded by the NIA to fund development of CT1812 for the treatment of AD.
We are the exclusive owner of six patent families that include several granted U.S. patents and pending U.S. patent applications, as well as granted patents and pending patent applications in numerous foreign jurisdictions, relating to compositions of matter and pharmaceutical compositions of CT1812, analogs of CT1812, and the use of CT1812 for the treatment in certain diseases, disorders and conditions including AD, GA secondary to dry AMD, PD, and synucleinopathies.
We are the exclusive owner of eight patent families that include several granted U.S. patents and pending U.S. patent applications, as well as granted patents and pending patent applications in numerous foreign jurisdictions, relating to compositions of matter and pharmaceutical compositions of CT1812, analogs of CT1812, and the use of CT1812 for the treatment in certain diseases, disorders and conditions including AD, GA secondary to dry AMD, PD, and synucleinopathies.
The IND also includes results of animal and in vitro studies assessing the toxicology, PK, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human 37 Table of Contents clinical trials may begin.
The IND also includes results of animal and in vitro studies assessing the toxicology, PK, pharmacology, and 38 Table of Contents pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin.
Once displaced, Aβ oligomers are unable to rebind as long as threshold concentrations of CT1812 are present and are rapidly removed from the synapse.
Once displaced, Aβ oligomers are unable to rebind as long as threshold concentrations of CT1812 are present, and are then rapidly removed from the synapse.
The smaller the Kd value, the greater the binding affinity. Bmax refers to the maximum amount of a ligand that can bind specifically to a receptor. Intensity is measured in arbitrary fluorescent units. ​ 15 Table of Contents We believe that CT1812 is the only drug candidate currently in clinical trials that mimics the effects of the A673T mutation.
The smaller the Kd value, the greater the binding affinity. Bmax refers to the maximum amount of a ligand that can bind specifically to a receptor. Intensity is measured in arbitrary fluorescent units. ​ 16 Table of Contents We believe that CT1812 is the only drug candidate currently in clinical trials that mimics the effects of the A673T mutation.
The second segment was configured as a multiple ascending dose trial, that enrolled 39 healthy volunteers, divided in three cohorts of ten participants, with one additional cohort consisting of nine healthy elderly volunteers. Each 21 Table of Contents participant in this segment of the trial received a single dose of CT1812 each day for 14 days.
The second segment was configured as a multiple ascending dose trial, that enrolled 39 healthy volunteers, divided in three cohorts of ten participants, with one additional cohort consisting of nine healthy elderly volunteers. Each 22 Table of Contents participant in this segment of the trial received a single dose of CT1812 each day for 14 days.
The addition of CT1812 displaces Aβ oligomer binding and appears to block the effects induced by the Aβ oligomers, with the synapse numbers remaining at levels similar to normal. 23 Table of Contents CT1812 slowed loss of synapse numbers in the presence of Aβ oligomers ​ The protective benefits of CT1812 observed in these in vitro assays are supported by functional in vivo assessments of CT1812.
The addition of CT1812 displaces Aβ oligomer binding and appears to block the effects induced by the Aβ oligomers, with the synapse numbers remaining at levels similar to normal. 24 Table of Contents CT1812 slowed loss of synapse numbers in the presence of Aβ oligomers ​ The protective benefits of CT1812 observed in these in vitro assays are supported by functional in vivo assessments of CT1812.
In 32 Table of Contents parallel, these studies will elucidate the mechanism of action by which S2R modulators are efficacious in PD and DLB and provide essential data to support potential biomarker nomination for PD and DLB. Grant Funding Historically, we have sought grant funding to strategically advance our programs.
In parallel, 33 Table of Contents these studies will elucidate the mechanism of action by which S2R modulators are efficacious in PD and DLB and provide essential data to support potential biomarker nomination for PD and DLB. Grant Funding Historically, we have sought grant funding to strategically advance our programs.
Generally, before a new drug can be marketed, considerable data must be generated, which demonstrate the drug’s quality, safety, and efficacy. Such data must then be organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority. 36 Table of Contents U.S.
Generally, before a new drug can be marketed, considerable data must be generated, which demonstrate the drug’s quality, safety, and efficacy. Such 37 Table of Contents data must then be organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority. U.S.
As of December 31, 2022, we had approximately $89.3 million available from NIA funds for applicable expenses to be incurred in the future. ​ ​ ​ ​ ​ ​ ​ ​ ​ Funding Org Year Project Amount National Institute on Aging (NIH) 2016 COG0101 Ph1b first-in-patient trial for CT1812 ​ $ 2,410,669 National Institute on Aging (NIH) 2016 COG0102 Ph1b/2a Clinical Trial for CT1812 ​ $ 2,410,669 National Institute on Aging (NIH) 2017 COG0104 Ph1 SNAP Study: CSF Catheter ​ $ 2,527,271 National Institute on Aging (NIH) 2017 COG0105 Ph1 SPARC Study: SV2a PET ​ $ 4,795,774 National Institute on Aging (NIH) 2018 COG0201 Ph2 SHINE Study ​ $ 16,848,329 National Institute on Aging (NIH) 2019 COG0202 Ph2 SEQUEL Study: qEEG ​ $ 5,445,051 National Institute on Aging (NIH) 2020 COG0203 Ph2 Study with ACTC ​ $ 80,974,766 National Institute on Aging (NIH) 2021 COG0108 Study: hAME ​ $ 1,642,783 National Institute on Aging (NIH) 2021 COG0201 Ph2 SHINE Amendment ​ $ 13,634,548 National Institute on Aging (NIH) 2021 COG1201: Study: DLB ​ $ 29,498,048 NIH and others 2010‑2021 Ten Preclinical Programs ​ $ 10,859,971 ​ ​ ​ ​ ​ ​ $ 171,047,879 ​ Each of the grants awarded to us relate to agreed-upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to CROs, research institutions and/or consortiums involved in the grant, as well as facilities and administrative costs.
As of December 31, 2023, we had approximately $67 million available from NIA funds for applicable expenses to be incurred in the future. ​ ​ ​ ​ ​ ​ ​ ​ ​ Funding Org Year Project Amount National Institute on Aging (NIH) 2016 COG0101 Ph1b first-in-patient trial for CT1812 ​ $ 2,410,669 National Institute on Aging (NIH) 2016 COG0102 Ph1b/2a Clinical Trial for CT1812 ​ $ 2,410,669 National Institute on Aging (NIH) 2017 COG0104 Ph1 SNAP Study: CSF Catheter ​ $ 2,527,271 National Institute on Aging (NIH) 2017 COG0105 Ph1 SPARC Study: SV2a PET ​ $ 4,795,774 National Institute on Aging (NIH) 2018 COG0201 Ph2 SHINE Study ​ $ 16,848,329 National Institute on Aging (NIH) 2019 COG0202 Ph2 SEQUEL Study: qEEG ​ $ 5,445,051 National Institute on Aging (NIH) 2020 COG0203 Ph2 Study with ACTC ​ $ 80,974,766 National Institute on Aging (NIH) 2021 COG0108 Study: hAME ​ $ 1,642,783 National Institute on Aging (NIH) 2021 COG0201 Ph2 SHINE Amendment ​ $ 13,634,548 National Institute on Aging (NIH) 2021 COG1201: Study: DLB ​ $ 29,498,048 NIH and others 2010‑2021 Ten Preclinical Programs ​ $ 10,859,971 ​ ​ ​ ​ ​ ​ $ 171,047,879 ​ Each of the grants awarded to us relates to agreed-upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to CROs, research institutions and/or consortiums involved in the grant, as well as facilities and administrative costs.
CT1812 Uses a Differentiated Mechanism of Action to Selectively Target Aβ Oligomers Our proprietary CT1812 clinical candidate employs a novel and fundamentally different mechanism which through alteration of S2R activity selectively facilitates removal of neurotoxic Aβ oligomers. Experimental evidence suggests that Aβ oligomers likely occupy binding sites contiguous to the S2R complex.
CT1812 Uses a Differentiated Mechanism of Action to Selectively Target Aβ Oligomers Our proprietary CT1812 product candidate employs a novel and fundamentally different mechanism which through alteration of S2R activity selectively facilitates removal of neurotoxic Aβ oligomers. Experimental evidence suggests that Aβ oligomers likely occupy binding sites contiguous to the S2R complex.
These therapeutic products do not modify or alter the progression of the underlying disease and provide only modest efficacy in treating the symptoms. 13 Table of Contents Therapeutic Approaches in Development to Treat the Underlying Disease Have Shown Little Success Numerous therapeutic approaches have been evaluated to remedy the causes of AD.
These therapeutic products do not modify or alter the progression of the underlying disease and provide only modest efficacy in treating the symptoms. 14 Table of Contents Therapeutic Approaches in Development to Treat the Underlying Disease Have Shown Little Success Numerous therapeutic approaches have been evaluated to remedy the causes of AD.
Biomarker and Imaging-Driven Evidence Biomarkers have become increasingly important in the development of treatments for neurodegenerative diseases for a number of reasons, including monitoring drug activity in patients, assessing changes in disease pathology during treatment and identifying responder populations for clinical studies.
Biomarker and Imaging-Driven Evidence Biomarkers have become increasingly important in the development of treatments for neurodegenerative diseases for a number of reasons, including monitoring drug activity in patients, assessing changes in disease pathology during treatment and identifying responder populations for clinical trials.
Pathway analysis of transcriptomic data suggest a key role of S2R modulators in regulating pathways involved in cell survival and inflammation. 26 Table of Contents Mechanistic Studies Indicate CT1812 Plays a Role in Cell Survival and Inflammatory Pathways in RPE Cells ​ Additional functional studies indicate S2R modulators may ameliorate disruptions in homeostatic functions of RPEs, including ameliorating lysosomal dysfunction and salvaging the ability of RPE cells to recycle photoreceptor outer segments. 27 Table of Contents Working Hypothesis of Mechanism of Action in Dry AMD ​ We believe preclinical studies provide further evidence supporting a clinical trial for CT1812 as a potential treatment for GA secondary to dry AMD.
Pathway analysis of transcriptomic data suggests a key role of S2R modulators in regulating pathways involved in cell survival and inflammation. 27 Table of Contents Mechanistic Studies Indicate CT1812 Plays a Role in Cell Survival and Inflammatory Pathways in RPE Cells ​ Additional functional studies indicate S2R modulators may ameliorate disruptions in homeostatic functions of RPEs, including ameliorating lysosomal dysfunction and salvaging the ability of RPE cells to recycle photoreceptor outer segments. 28 Table of Contents Working Hypothesis of Mechanism of Action in Dry AMD ​ We believe preclinical studies provide further evidence supporting a clinical trial for CT1812 as a potential treatment for GA secondary to dry AMD.
The only other therapies approved for AD are indicated to treat the symptoms of AD: acetylcholinesterase inhibitors, or AChEIs, and glutamatergic modulators and an orexin receptor antagonist. AChEIs are designed to slow the degradation of the neurotransmitter acetylcholine, helping to preserve neuronal communication and function temporarily.
Other therapies approved for AD are indicated to treat the symptoms of AD: acetylcholinesterase inhibitors, or AChEIs, antipsychotics, glutamatergic modulators and an orexin receptor antagonist. AChEIs are designed to slow the degradation of the neurotransmitter acetylcholine, helping to preserve neuronal communication and function temporarily.
In addition, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct 38 Table of Contents continuing review and reapprove the study at least annually.
In addition, an IRB representing each institution participating in the clinical trial must review and approve the 39 Table of Contents plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other 43 Table of Contents regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
CT1812 binding to the S2R complex likely modulates the conformation of the S2R complex, which in turn allosterically alters the conformation of the oligomer binding pocket on the oligomer 14 Table of Contents receptors. Binding pocket destabilization leads to displacement of Aβ oligomers from the neurons and neuronal synapse.
CT1812 binding to the S2R complex likely modulates the conformation of the 15 Table of Contents S2R complex, which in turn allosterically alters the conformation of the oligomer binding pocket on the oligomer receptors. Binding pocket destabilization leads to displacement of Aβ oligomers from the neurons and neuronal synapse.
In addition, many small biotechnology companies have formed collaborations with large, established companies to (i) obtain support for their research, development and commercialization of products or (ii) combine several treatment approaches to develop longer lasting or more efficacious treatments that may potentially directly compete with our current or future product candidates.
In addition, many small biotechnology companies have formed collaborations with large, 36 Table of Contents established companies to (i) obtain support for their research, development and commercialization of products or (ii) combine several treatment approaches to develop longer lasting or more efficacious treatments that may potentially directly compete with our current or future product candidates.
Decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.
Decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product. 46 Table of Contents The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.
With regard to a fast track designated product, the FDA may also consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
With regard to a fast track 41 Table of Contents designated product, the FDA may also consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
We observed mild and transient elevations of liver enzymes without any other indications of liver injury in two patients in the 300-milligram group. The patients were discontinued from the study and the liver enzyme levels returned to normal.
We observed mild and transient elevations of liver enzymes without any other indications of liver injury in two patients in the 300 mg group. The patients were discontinued from the study and the liver enzyme levels returned to normal.
Subject to discussion with the FDA, we intend to conduct clinical studies in DLB, PD and potentially other synucleinopathies as outlined below. An Overview of Synucleinopathies Synucleinopathies are a group of neurodegenerative disorders in which the protein α-synuclein accumulates abnormally to form inclusions in the cell bodies or axons of neurons or oligodendrocytes.
Subject to discussion with the FDA, we intend to conduct clinical studies in DLB, PD and potentially other synucleinopathies as outlined below. 30 Table of Contents An Overview of Synucleinopathies Synucleinopathies are a group of neurodegenerative disorders in which the protein α-synuclein accumulates abnormally to form inclusions in the cell bodies or axons of neurons or oligodendrocytes.
The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant 43 Table of Contents are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages, or strengths of an existing drug.
The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages, or strengths of an existing drug.
Preliminary data showed a three-point improvement in cognitive decline in CT1812-treated patients. ​ Proteomic measurements were also performed of CSF and plasma from these patients, from which we have comprehensive datasets of whole proteome changes observed in AD patients given CT1812 versus placebo for six 17 Table of Contents months.
Preliminary data showed a three-point improvement in cognitive decline in CT1812-treated patients. ​ Proteomic measurements were also performed of CSF and plasma from these patients, from which we have comprehensive datasets of whole proteome changes observed in AD patients given CT1812 versus placebo for six months.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to any nonclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to 44 Table of Contents conduct or obtain a right of reference to any nonclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which 47 Table of Contents could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
We observed mild and transient elevations of liver enzymes in three patients without any other indications of liver injury. These data were consistent with findings from earlier clinical studies.
We observed mild and transient elevations of liver enzymes in three patients without any other indications of liver injury. These data were consistent with findings from earlier clinical trials.
The legislation also extended Medicaid rebates, previously due only on fee-for-service Medicaid utilization, to include the utilization of Medicaid managed care organizations as well and created an alternative rebate formula for certain new formulations of certain existing products that is intended to increase the amount of rebates due on those products.
The legislation also extended Medicaid rebates, previously due only on fee-for-service Medicaid utilization, to include the utilization of Medicaid managed care organizations as well and 47 Table of Contents created an alternative rebate formula for certain new formulations of certain existing products that is intended to increase the amount of rebates due on those products.
The resubmitted application is also subject to review before the FDA accepts it for filing. 39 Table of Contents The FDA may refer an application for a novel drug to an advisory committee.
The resubmitted application is also subject to review before the FDA accepts it for filing. 40 Table of Contents The FDA may refer an application for a novel drug to an advisory committee.
Physicians may believe that such 42 Table of Contents off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off- label use of their products.
Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.
We and our key opinion leaders believe CT1812 also can be used in combination with other therapeutics targeting AD biologies and thus may have many partnering opportunities. ● Continue to pursue non-dilutive funding opportunities . The majority of our research and clinical efforts have been funded by approximately $171.0 million in cumulative grants awarded primarily by the NIA.
We and our key opinion leaders believe CT1812 also can be used in combination with other therapeutics and thus may have many partnering opportunities. ● Continue to pursue non-dilutive funding opportunities . The majority of our research and clinical efforts have been funded by approximately $171 million in cumulative grants awarded primarily by the NIA.
Any of these applications, if issued, will have a natural expiration between 34 Table of Contents 2038 and 2043, subject to any adjustment or extension of patent term that may be available such as PTE following NDA approval in the United States as well as any term limitations based upon earlier expiring patents.
Any of these applications, if issued, will have a natural 35 Table of Contents expiration between 2038 and 2044, subject to any adjustment or extension of patent term that may be available such as PTE following NDA approval in the United States as well as any term limitations based upon earlier expiring patents.
To date, we have received approximately $171.0 million in cumulative grants awarded primarily from the NIA to support our clinical trials. 9 Table of Contents Our Approach to Treating Age-Related Degenerative Diseases of the CNS and Retina Age-related degenerative diseases are defined by an age-related decline of cellular function often resulting in cell death.
To date, we have received approximately $171 million in cumulative grants awarded primarily from the NIA to support our clinical trials. Our Approach to Treating Age-Related Degenerative Diseases of the CNS and Retina Age-related degenerative diseases are defined by an age-related decline of cellular function often resulting in cell death.
Neurodegenerative diseases, perhaps the most prominent of these degenerative disorders, are a variety of conditions defined by progressive degeneration of nerve cells, or neurons, which often leads to neuronal death, causing decline in cognition or other functions, resulting in decreased quality of life and shorter life span. The two most common neurodegenerative diseases are AD and PD.
Neurodegenerative diseases, perhaps the most prominent of these degenerative disorders, are a variety of conditions defined by progressive degeneration of nerve cells, or neurons, which often leads to neuronal death, causing decline in cognition or other functions, resulting in decreased quality of life and shorter life span.
Topline results from the analyses of secondary endpoints demonstrated that after 24-weeks of treatment, there were no significant treatment differences on the ADAS-Cog 11 change from baseline. In addition, there were no significant treatment differences on SV2A signal change compared to baseline.
Top-line results from the analyses of secondary endpoints demonstrated that after 24-weeks of treatment, there were no significant treatment differences on the ADAS-Cog 11 change from baseline. In addition, there were no significant treatment differences on SV2A signal change compared to baseline.
This analysis of CT1812’s impact on 20 Table of Contents synaptotagmin-1 levels is presented in the right graph below.
This analysis of CT1812’s impact on synaptotagmin-1 levels 21 Table of Contents is presented in the right graph below.
We also own four families of pending patent applications directed to methods for selecting subsets of patients with AD for treatment with CT1812, methods of modulating amyloid beta monomer and oligomer levels using CT812, methods of treating GA secondary to dry AMD with CT1812 and methods of treating various neurologic diseases including PD and synucleinopathies with CT1812, as well as a pending provisional application directed to treating certain subsets of AD patients with CT1812.
We also own seven families of pending patent applications directed to methods for selecting subsets of patients with AD for treatment with CT1812, methods of modulating amyloid beta monomer and oligomer levels using CT812, methods of treating GA secondary to dry AMD with CT1812 and methods of treating various neurologic diseases including PD and synucleinopathies with CT1812, as well as a pending provisional application directed to treating certain subsets of AD patients with CT1812 and treating Niemann-Pick disease.
During 2022, the Company has taken proactive steps to enhance and improve our policies related to employee welfare and engagement.
During 2023, the Company has taken proactive steps to enhance and improve our policies related to employee welfare and engagement.
Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.
Drug manufacturers 42 Table of Contents and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.
These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development.
These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach alignment on plans for the next phase of development.
After 41 Table of Contents approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There are continuing, annual program fees for any marketed products.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There are continuing, annual program fees for any marketed products.
Planned Phase 2 Clinical Trial Design We believe that an S2R antagonist, such as CT1812, may help to regulate the damage-response processes related to these cells that are impaired in GA secondary to dry AMD.
COG2201 — Phase 2 MAGNIFY Clinical Trial We believe that an S2R antagonist, such as CT1812, may help to regulate the damage-response processes related to these cells that are impaired in GA secondary to dry AMD.
Seventeen patients completed the study protocol, eleven in the CT1812 arm (six in the 100mg cohort; five in the 300mg cohort) and six in the placebo arm. CT1812 was well-tolerated with similar adverse event rates across treatment arms. Most adverse events were mild-to-moderate in severity with no deaths and no treatment-related SAEs reported.
Seventeen patients completed the study protocol, eleven in the CT1812 arm (six in the 100 mg cohort; five in the 300 mg cohort) and six in the placebo arm. CT1812 was well tolerated with similar adverse event rates across treatment arms. Most adverse events were mild-to-moderate in severity with no deaths and no treatment-related SAEs reported.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act substantially changed the way healthcare is financed by both 46 Table of Contents governmental and private insurers, and significantly impacts the pharmaceutical industry.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry.
Patients enrolled in the trial had an indwelling catheter placed in the lumbar CSF space. CSF samples were collected hourly over a 28-hour period. Five CSF samples were collected before and 24 samples collected after administration of a single 560 mg oral dose of CT1812 or placebo.
Patients were randomized 2:1 to receive a single dose of CT1812 or placebo. Patients enrolled in the trial had an indwelling catheter placed in the lumbar CSF space. CSF samples were collected hourly over a 28-hour period. Five CSF samples were collected before and 24 samples collected after administration of a single 560 mg oral dose of CT1812 or placebo.
Patients will be randomized to receive CT1812 or a placebo for 18 months. In addition to cognitive and functional measures, such as the Clinical Dementia Rating Scale, or CDR, Sum of Boxes, or SB, and ADAS-Cog, we intend to use a variety of biomarkers to measure target and/or pathway engagement and assess changes in neurodegeneration and disease progression.
Participants are being randomized to receive CT1812 or a placebo for 18 months. In addition to cognitive and functional measures, such as the Clinical Dementia Rating Scale, or CDR, Sum of Boxes, or SB, and ADAS-Cog, we intend to use a variety of biomarkers to measure target and/or pathway engagement and assess changes in neurodegeneration and disease progression.
Employees and Human Capital Resources As of March 1, 2023, we had 25 employees, 22 of whom were full-time and 19 of whom were engaged in research and development activities. Seven of our employees hold Ph.D. or M.D. degrees. None of our employees are represented by a labor union. We consider our relationship with our employees to be good.
Employees and Human Capital Resources As of March 1, 2024, we had 28 employees, 25 of whom were full-time and 17 of whom were engaged in research and development activities. Seven of our employees hold Ph.D. or M.D. degrees. None of our employees are represented by a labor union. We consider our relationship with our employees to be good.
The sponsor of a fast track designated product has 40 Table of Contents opportunities for more frequent interactions with the applicable FDA review team during product development.
The sponsor of a fast track designated product has opportunities for more frequent interactions with the applicable FDA review team during product development.
This includes awards totaling $10.9 million in support of preclinical studies and $160.1 million for clinical development, the largest of which was the 2020 award of $81.0 million supporting our upcoming Phase 2 START (COG0203) study of CT1812 in early-stage AD.
This includes awards totaling $11 million in support of preclinical studies and $160 million for clinical development, the largest of which was the 2020 award of $81 million supporting our upcoming Phase 2 START (COG0203) study of CT1812 in early-stage AD.
We believe that an S2R modulator, such as CT1812, may help to regulate the damage- 8 Table of Contents response processes related to these cells that are impaired in GA secondary to dry AMD.
We believe that an S2R modulator, such as CT1812, may help to regulate the damage-response processes related to these cells that are impaired in GA secondary to dry AMD.
This patent family also includes a pending U.S. patent application and pending application in certain foreign jurisdictions including Canada, India, the European Union and Hong Kong.
This patent family also includes a pending U.S. patent application and pending application in certain foreign jurisdictions including India and the European Union.
The trial is configured as a two-arm crossover trial, in which half of the participants will receive 300 mg of CT1812 daily for 29 days. After a 14-day wash out period, these participants will receive placebo for an additional 29 days. The other half of the participants receive placebo daily for 29 days.
The trial is a two-arm crossover trial, in which half of the participants received 300 mg of CT1812 daily for 29 days. After a 14-day wash out period, these participants received placebo for an additional 29 days. The other half of the participants received placebo daily for 29 days.
Preliminary results from an interim analysis of the first 24 patients in Part A of our SHINE Phase 2 clinical trial demonstrated a statistically significant decline in the presence of Aβ monomers and a positive trend on cognitive function as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale, or ADAS-Cog, in patients receiving CT1812 compared to placebo.
Preliminary results from an interim analysis of the first 24 patients demonstrated a statistically significant decline in the presence of Aβ monomers and a positive trend on cognitive function as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale, or ADAS-Cog, in patients receiving CT1812 compared to placebo.
In addition to cognitive and functional measures, such as CDR-SB (Clinical Dementia Rating Sum of Boxes), ADAS-Cog and volumetric magnetic resonance imaging, or vMRI, we intend to use a variety of biomarkers to measure target and/or pathway engagement and assess changes in neurodegeneration and disease progression. We expect to open sites in the first half of 2023.
In addition to cognitive and functional measures, such as CDR-SB (Clinical Dementia Rating Sum of Boxes), ADAS-Cog and volumetric magnetic resonance imaging, or vMRI, we intend to use a variety of biomarkers to measure target and/or pathway engagement and assess changes in neurodegeneration and disease progression.
This trial has been funded by a grant of approximately $81.0 million from the NIA. 7 Table of Contents DLB We are evaluating CT1812 in a 120-patient Phase 2 COG1201 SHIMMER clinical trial to investigate the potential for CT1812’s use as a disease-modifying agent in DLB.
This trial has been funded by a grant of approximately $81 million from the NIA. 8 Table of Contents DLB We are evaluating CT1812 in a 120-patient Phase 2 COG1201 SHIMMER clinical trial to investigate the potential for CT1812’s use as a disease-modifying agent in adults with mild-to-moderate DLB.
Our START (COG0203) clinical trial in patients with mild dementia associated with early stage AD has been funded by a grant of approximately $81.0 million awarded from the NIA. ● Pursue the development of CT1812 for GA secondary to dry AMD . We plan to evaluate CT1812 as a potential therapy for GA secondary to dry AMD.
Our START (COG0203) clinical trial in patients with mild dementia associated with early-stage AD has been funded by a grant of approximately $81 million awarded from the NIA. ● Advance clinical development of CT1812 for GA secondary to dry AMD . We are evaluating CT1812 as a potential therapy for GA secondary to dry AMD.
Participants are divided in two CT1812 dose groups (100 mg or 300 mg) and one placebo group, dosed daily for six months. Endpoints include safety and biomarker evidence of disease modification as well as cognitive function, as measured by the ADAS-Cog 11-item version, or ADAS-Cog 11.
A total of 153 adult participants were enrolled and divided in two CT1812 dose groups (100 mg or 300 mg) and one placebo group, dosed daily for six months. Endpoints include safety and biomarker evidence of disease modification as well as cognitive function, as measured by the ADAS-Cog 11-item version, or ADAS-Cog 11.
We intend to enroll 540 patients in our START trial with mild cognitive impairment, or MCI, due to AD or mild AD who have elevated levels of Aβ oligomers as determined by a clinical diagnosis of AD confirmed with amyloid biomarkers positron emission tomography, or PET, imaging and/or cerebrospinal fluid, or CSF, biomarkers.
We intend to enroll 540 adults with mild cognitive impairment, or MCI, due to AD or mild AD who have elevated levels of Aβ as determined by a clinical diagnosis of AD confirmed with amyloid biomarkers positron emission tomography, or PET, imaging and/or cerebrospinal fluid, or CSF, biomarkers.
The design of this trial is a double-blind, randomized trial involving three dose groups, two active treatment cohorts and a placebo group. We are enrolling 120 patients in a six-month study, with equal participant numbers in each of the three dose groups, with daily (QD) dosing.
The design of this trial is a double-blind, randomized, six-month trial involving three dose groups, two active treatment cohorts and a placebo group. We intend to enroll approximately 120 patients with equal participant numbers in each of the three dose groups, with daily (QD) dosing.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile we have not experienced any other losses relating to cyber-attacks or other information security breaches such as the one that occurred in November 2021, there can be no assurance that we will ever recover the funds lost or that we will not suffer additional losses in the future. ​ Additionally, while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, negative publicity and other harm to our business and our competitive position.
Biggest changeWhile we have implemented security measures designed to protect our data security and information technology systems and infrastructure, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, negative publicity and other harm to our business and our competitive position.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: ​ ● the timing and cost of, and level of investment in, research, development and, if approved, commercialization activities relating to our product candidates, which may change from time to time; ​ ● the timing and status of enrollment for our clinical trials; ​ ● the cost of manufacturing our product candidates, as well as building out our supply chain, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; ​ ● the availability, timing, and receipt of any future NIA grants; ​ ● expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; ​ ● timing and amount of any milestone, royalty or other payments due under any collaboration or license agreement; ​ ● future accounting pronouncements or changes in our accounting policies; ​ ● the timing and success or failure of preclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; ​ 53 Table of Contents ● the timing of receipt of approvals for our product candidates from regulatory authorities in the United States and internationally; ​ ● coverage and reimbursement policies with respect to our product candidates, if approved, and potential future drugs that compete with our products; and ​ ● the level of demand for our product candidates, if approved, which may vary significantly over time. ​ ​ The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: ​ ● the timing and cost of, and level of investment in, research, development and, if approved, commercialization activities relating to our product candidates, which may change from time to time; ​ ● the timing and status of enrollment for our clinical trials; ​ ● the cost of manufacturing our product candidates, as well as building out our supply chain, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; ​ ● the availability, timing, and receipt of any future NIA grants; ​ 53 Table of Contents ● expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; ​ ● timing and amount of any milestone, royalty or other payments due under any collaboration or license agreement; ​ ● future accounting pronouncements or changes in our accounting policies; ​ ● the timing and success or failure of preclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; ​ ● the timing of receipt of approvals for our product candidates from regulatory authorities in the United States and internationally; ​ ● coverage and reimbursement policies with respect to our product candidates, if approved, and potential future drugs that compete with our products; and ​ ● the level of demand for our product candidates, if approved, which may vary significantly over time. ​ ​ The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
Food and Drug Administration, or FDA, or similar foreign regulatory agencies to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates, if approved; ​ ● acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities; ​ ● our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, efficacy and acceptable risk to benefit profile of our product candidates or any future product candidates; ​ ● the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; ​ 54 Table of Contents ● achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our product candidates or any future product candidates or approved products, if any; ​ ● the ability of third parties with whom we contract to manufacture adequate clinical trial and commercial supplies of our product candidates or any future product candidates remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMPs; ​ ● the convenience of our treatment or dosing regimen; ​ ● the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities; ​ ● acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates or any future product candidates, if approved, including relative to alternative and competing treatments; ​ ● the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or any future product candidates, if approved; ​ ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ​ ● supply chain disruptions, which may result in clinical site closures, delays to patient enrollment or changes to trial protocols; ​ ● our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others; ● patient demand for our product candidates, if approved, including patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; ● our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates; and ● our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims. ​ In addition, the FDA or other regulatory agencies may not agree with our clinical development plan and require that we conduct additional clinical trials to support our regulatory submissions.
Food and Drug Administration, or FDA, or similar foreign regulatory agencies to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates, if approved; ​ 54 Table of Contents ● acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities; ​ ● our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, efficacy and acceptable risk to benefit profile of our product candidates or any future product candidates; ​ ● the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; ​ ● achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our product candidates or any future product candidates or approved products, if any; ​ ● the ability of third parties with whom we contract to manufacture adequate clinical trial and commercial supplies of our product candidates or any future product candidates remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMPs; ​ ● the convenience of our treatment or dosing regimen; ​ ● the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities; ​ ● acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates or any future product candidates, if approved, including relative to alternative and competing treatments; ​ ● the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or any future product candidates, if approved; ​ ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ​ ● supply chain disruptions, which may result in clinical site closures, delays to patient enrollment or changes to trial protocols; ​ ● our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others; ● patient demand for our product candidates, if approved, including patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; ● our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates; and ● our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims. ​ In addition, the FDA or other regulatory agencies may not agree with our clinical development plan and require that we conduct additional clinical trials to support our regulatory submissions.
Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to: ​ ● supply chain disruptions, which may result in clinical site closures, delays to patient enrollment or changes to trial protocols; ​ ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; ​ ● delays in obtaining, or failure to obtain, regulatory authorization to commence a trial; ​ ● imposition of a temporary or permanent clinical hold by the FDA or comparable foreign regulatory authorities; ​ ● reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ​ ● identifying, recruiting and training suitable clinical investigators; ​ ● obtaining institutional review board, or IRB, approval at each trial site; ​ ● new safety findings that present unreasonable risk to clinical trial participants; ​ ● a negative finding from an inspection of our clinical trial operations or study sites; ​ ● recruiting an adequate number of suitable patients to participate in a trial; ​ ● having subjects complete a trial or return for post-treatment follow-up; ​ ● clinical sites deviating from trial protocol or dropping out of a trial; ​ ● addressing subject safety concerns that arise during the course of a trial; ​ ● adding a sufficient number of clinical trial sites; or ​ ● obtaining sufficient supply of product candidates for use in preclinical studies or clinical trials from third-party suppliers. ​ ​ We may experience numerous adverse or unforeseen events during, or as a result of, preclinical studies and clinical trials which could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: ​ ● we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials or require that we submit additional data or information before allowing a clinical trial to be initiated or continue; ​ ● clinical studies of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs; ​ ● the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; ​ ● our third-party contractors may fail to comply with regulatory requirements, fail to maintain adequate quality controls or be unable to provide us with sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates in a timely manner, or at all; ​ 57 Table of Contents ● we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics or a finding that the participants are being exposed to unacceptable health risks; ​ ● the cost of clinical trials of our product candidates may be greater than we anticipate; ​ ● the quality of our product candidates or other materials necessary to conduct preclinical studies or clinical trials of our product candidates may be insufficient or inadequate; ​ ● regulators may revise the requirements for approving our product candidates or such requirements may not be as we anticipate; and ​ ● any future collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us. ​ ​ If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only moderately positive or if there are safety concerns, we may: ​ ● incur unplanned costs; ​ ● be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all; ​ ● obtain marketing approval in some countries and not in others; ​ ● obtain marketing approval for indications or patient populations that are not as broad as intended or desired; ​ ● obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; ​ ● be subject to additional post-marketing testing requirements; or ● have the product removed from the market after obtaining marketing approval . ​ If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to: ​ ● supply chain disruptions, which may result in clinical site closures, delays to patient enrollment or changes to trial protocols; ​ ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; ​ ● delays in obtaining, or failure to obtain, regulatory authorization to commence a trial; ​ ● imposition of a temporary or permanent clinical hold by the FDA or comparable foreign regulatory authorities; ​ ● reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ​ ● identifying, recruiting and training suitable clinical investigators; ​ ● obtaining institutional review board, or IRB, approval at each trial site; ​ ● new safety findings that present unreasonable risk to clinical trial participants; ​ ● a negative finding from an inspection of our clinical trial operations or study sites; ​ ● recruiting an adequate number of suitable patients to participate in a trial; ​ ● having subjects complete a trial or return for post-treatment follow-up; ​ ● clinical sites deviating from trial protocol or dropping out of a trial; ​ ● addressing subject safety concerns that arise during the course of a trial; ​ ● adding a sufficient number of clinical trial sites; or ​ ● obtaining sufficient supply of product candidates for use in preclinical studies or clinical trials from third-party suppliers. ​ ​ We may experience numerous adverse or unforeseen events during, or as a result of, preclinical studies and clinical trials which could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: ​ ● we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials or require that we submit additional data or information before allowing a clinical trial to be initiated or continue; ​ ● clinical studies of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs; ​ 57 Table of Contents ● the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; ​ ● our third-party contractors may fail to comply with regulatory requirements, fail to maintain adequate quality controls or be unable to provide us with sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates in a timely manner, or at all; ​ ● we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics or a finding that the participants are being exposed to unacceptable health risks; ​ ● the cost of clinical trials of our product candidates may be greater than we anticipate; ​ ● the quality of our product candidates or other materials necessary to conduct preclinical studies or clinical trials of our product candidates may be insufficient or inadequate; ​ ● regulators may revise the requirements for approving our product candidates or such requirements may not be as we anticipate; and ​ ● any future collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us. ​ ​ If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only moderately positive or if there are safety concerns, we may: ​ ● incur unplanned costs; ​ ● be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all; ​ ● obtain marketing approval in some countries and not in others; ​ ● obtain marketing approval for indications or patient populations that are not as broad as intended or desired; ​ ● obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; ​ ● be subject to additional post-marketing testing requirements; or ● have the product removed from the market after obtaining marketing approval . ​ If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
The enrollment of patients depends on many factors, including: ​ ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; the severity and difficulty of diagnosing the disease under investigation ; ​ ● the patient eligibility and exclusion criteria defined in the protocol; ​ ● the size of the patient population required for analysis of the trial’s primary endpoints; ​ ● the proximity of patients to trial sites; ​ ● competition with other companies for clinical trial sites or patients; ​ ● the design of the trial; ​ ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ​ ● the existing body of safety and efficacy data with respect to the study drug and safety concerns; ​ ● patient referral practices of physicians; ​ 58 Table of Contents ● risk that enrolled subjects will drop out before completion of the trial, including as a result of contracting health conditions; ​ ● ability to monitor patients adequately during and after treatment; ​ ● availability and efficacy of approved medications or therapies, or other clinical trials, for the disease or condition under investigation ; ​ ● our ability to obtain and maintain patient consents. ​ ​ In addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
The enrollment of patients depends on many factors, including: ​ ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; the severity and difficulty of diagnosing the disease under investigation ; ​ ● the patient eligibility and exclusion criteria defined in the protocol; ​ ● the size of the patient population required for analysis of the trial’s primary endpoints; ​ ● the proximity of patients to trial sites; ​ ● competition with other companies for clinical trial sites or patients; ​ 58 Table of Contents ● the design of the trial; ​ ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ​ ● the existing body of safety and efficacy data with respect to the study drug and safety concerns; ​ ● patient referral practices of physicians; ​ ● risk that enrolled subjects will drop out before completion of the trial, including as a result of contracting health conditions; ​ ● ability to monitor patients adequately during and after treatment; ​ ● availability and efficacy of approved medications or therapies, or other clinical trials, for the disease or condition under investigation ; ​ ● our ability to obtain and maintain patient consents. ​ ​ In addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
Further, clinical trials may not be sufficient to determine the effect and safety consequences of taking our product candidates over a multi-year period. ​ If any of our product candidates receives marketing approval, and we or others later identify undesirable and unforeseen side effects caused by such product, a number of potentially significant negative consequences could result, including but not limited to: ​ ● regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; ​ ● we may be required to conduct additional clinical trials or post-approval studies; ​ ● we may be required to recall a product or change the way such product is administered to patients; ​ ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ​ ● regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; 59 Table of Contents ​ ● we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a Medication Guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use; ​ ● we could be sued and held liable for harm caused to patients; ​ ● we may be subject to fines, injunctions or the imposition of criminal penalties; ​ ● the product may become less competitive; and ​ ● our reputation may suffer. ​ ​ Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues to us, which would materially and adversely affect our business, financial condition, results of operations and prospects .
Further, clinical trials may not be sufficient to determine the effect and safety consequences of taking our product candidates over a multi-year period. ​ If any of our product candidates receives marketing approval, and we or others later identify undesirable and unforeseen side effects caused by such product, a number of potentially significant negative consequences could result, including but not limited to: ​ ● regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; ​ ● we may be required to conduct additional clinical trials or post-approval studies; ​ ● we may be required to recall a product or change the way such product is administered to patients; ​ 59 Table of Contents ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ​ ● regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ​ ● we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a Medication Guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use; ​ ● we could be sued and held liable for harm caused to patients; ​ ● we may be subject to fines, injunctions or the imposition of criminal penalties; ​ ● the product may become less competitive; and ​ ● our reputation may suffer. ​ ​ Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues to us, which would materially and adversely affect our business, financial condition, results of operations and prospects .
Our need to effectively execute our growth strategy requires that we: ​ ● manage our clinical trials effectively; ​ ● identify, recruit, retain, incentivize and integrate additional employees, including personnel focused on research and development and, if our product candidates receive marketing approval, sales; ​ ● manage our internal development and operational efforts effectively while carrying out our contractual obligations to third parties; and ​ ● continue to improve our operational, financial and management controls, reports systems and procedures. ​ ​ 65 Table of Contents Our future financial performance and our ability to develop, manufacture and commercialize CT1812 and our product candidates, if approved, will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert financial and other resources, and a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time, to managing these growth activities. ​ If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize CT1812, if approved, and our product candidates and, accordingly, may not achieve our research, development and commercialization goals . ​ If we fail to attract and retain senior management and key scientific personnel, our business may be materially and adversely affected.
Our need to effectively execute our growth strategy requires that we: ​ ● manage our clinical trials effectively; ​ ● identify, recruit, retain, incentivize and integrate additional employees, including personnel focused on research and development and, if our product candidates receive marketing approval, sales; ​ 65 Table of Contents ● manage our internal development and operational efforts effectively while carrying out our contractual obligations to third parties; and ​ ● continue to improve our operational, financial and management controls, reports systems and procedures. ​ ​ Our future financial performance and our ability to develop, manufacture and commercialize CT1812 and our product candidates, if approved, will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert financial and other resources, and a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time, to managing these growth activities. ​ If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize CT1812, if approved, and our product candidates and, accordingly, may not achieve our research, development and commercialization goals . ​ If we fail to attract and retain senior management and key scientific personnel, our business may be materially and adversely affected.
Regardless of the merits or eventual outcome, liability claims may result in: ​ ● decreased demand for our current or future product candidates; ​ ● injury to our reputation; ​ ● withdrawal of clinical trial participants; ​ ● costs to defend the related litigation; ​ ● diversion of management’s time and our resources; ​ ● substantial monetary awards to trial participants or patients; ​ ● regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions; ​ ● loss of revenue; and ​ 66 Table of Contents ● the inability to commercialize our current or any future product candidates. ​ ​ If we are unable to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims, the commercialization of our current or any future product candidates we develop could be inhibited or prevented.
Regardless of the merits or eventual outcome, liability claims may result in: ​ ● decreased demand for our current or future product candidates; ​ ● injury to our reputation; ​ ● withdrawal of clinical trial participants; ​ ● costs to defend the related litigation; ​ ● diversion of management’s time and our resources; ​ 66 Table of Contents ● substantial monetary awards to trial participants or patients; ​ ● regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions; ​ ● loss of revenue; and ​ ● the inability to commercialize our current or any future product candidates. ​ ​ If we are unable to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims, the commercialization of our current or any future product candidates we develop could be inhibited or prevented.
The patent applications that we own may fail to result in issued patents with claims that cover any of our product 70 Table of Contents candidates in the United States or in other foreign countries.
The patent applications that we own may fail to result in issued patents with claims that cover any of our product candidates in the United 70 Table of Contents States or in other foreign countries.
The Leahy-Smith Act was signed into law on September 16, 2011 and includes a number of significant changes to U.S. patent law. These include provisions that affect the way 71 Table of Contents patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents.
The Leahy-Smith Act was signed into law on September 16, 2011 and includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent 71 Table of Contents applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents.
Additionally, such proceedings could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we 72 Table of Contents initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
Additionally, such proceedings could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages 72 Table of Contents or other remedies awarded, if any, may not be commercially meaningful.
Even if we are able to obtain an extension, the patent term may still expire before or shortly after we receive FDA marketing approval. ​ 73 Table of Contents If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case . ​ If we do not obtain protection under the Hatch-Waxman Amendments by obtaining data exclusivity, our business may be harmed.
Even if we are able to obtain an extension, the patent term may still expire before or shortly after we receive FDA marketing approval. ​ If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by 73 Table of Contents referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case . ​ If we do not obtain protection under the Hatch-Waxman Amendments by obtaining data exclusivity, our business may be harmed.
The following examples are illustrative: 82 Table of Contents ​ ● others may be able to make product that is similar to product candidates we intend to commercialize that is not covered by the patents that we own; ​ ● we, or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own; ​ ● we or any collaborators might not have been the first to file patent applications covering certain of our inventions; ​ ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ​ ● it is possible that our pending patent applications will not lead to issued patents; ​ ● issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ​ ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and we may not develop additional proprietary technologies that are patentable; ● third parties performing manufacturing or testing for us using our products or technologies could use the intellectual property of others without obtaining a proper license; ​ ● parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; ​ ● we may not develop additional proprietary technologies that are patentable; ​ ● we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and ​ ● the patents of others may harm our business. ​ ​ Should any of these events occur, they could significantly harm our business and results of operations .
The following examples are illustrative: ​ ● others may be able to make product that is similar to product candidates we intend to commercialize that is not covered by the patents that we own; ​ ● we, or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own; ​ ● we or any collaborators might not have been the first to file patent applications covering certain of our inventions; ​ ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ​ ● it is possible that our pending patent applications will not lead to issued patents; ​ 82 Table of Contents ● issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ​ ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and we may not develop additional proprietary technologies that are patentable; ● third parties performing manufacturing or testing for us using our products or technologies could use the intellectual property of others without obtaining a proper license; ​ ● parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; ​ ● we may not develop additional proprietary technologies that are patentable; ​ ● we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and ​ ● the patents of others may harm our business. ​ ​ Should any of these events occur, they could significantly harm our business and results of operations .
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: ​ ● the clinical indications for which the product is approved and patient demand for approved products that treat those indications; ​ ● the safety and efficacy of our product as compared to other available therapies; ​ ● the availability of coverage and adequate reimbursement from governmental healthcare plans or third party payors for any of our product candidates that may be approved; ​ ● acceptance by physicians, operators of clinics and patients of the product as a safe and effective treatment; ​ ● physician and patient willingness to adopt a new therapy over other available therapies to treat approved indications; ​ 83 Table of Contents ● overcoming any biases physicians or patients may have toward particular therapies for the treatment of approved indications; ​ ● proper training and administration of our product candidates by physicians and medical staff; ​ ● public misperception regarding the use of our therapies, if approved for commercial sale; ​ ● patient satisfaction with the results and administration of our product candidates and overall treatment experience, including, for example, the convenience of any dosing regimen; ​ ● the cost of treatment with our product candidates in relation to alternative treatments and reimbursement levels, if any, and willingness to pay for the product, if approved, on the part of insurance companies and other third-party payors, physicians and patients; ​ ● the revenue and profitability that our products may offer a physician as compared to alternative therapies; ​ ● limitations or warnings contained in the FDA-approved labeling for our products; ​ ● any FDA requirement to undertake a REMS; ​ ● the effectiveness of our sales, marketing and distribution efforts; ​ ● adverse publicity about our products or favorable publicity about competitive products; and ​ ● potential product liability claims. ​ ​ We cannot assure you that our current or future product candidates, if approved, will achieve broad market acceptance among physicians, patients, healthcare payors and others in the medical community.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: ​ ● the clinical indications for which the product is approved and patient demand for approved products that treat those indications; ​ ● the safety and efficacy of our product as compared to other available therapies; ​ ● the availability of coverage and adequate reimbursement from governmental healthcare plans or third party payors for any of our product candidates that may be approved; ​ ● acceptance by physicians, operators of clinics and patients of the product as a safe and effective treatment; ​ ● physician and patient willingness to adopt a new therapy over other available therapies to treat approved indications; ​ ● overcoming any biases physicians or patients may have toward particular therapies for the treatment of approved indications; ​ ● proper training and administration of our product candidates by physicians and medical staff; ​ ● public misperception regarding the use of our therapies, if approved for commercial sale; ​ ● patient satisfaction with the results and administration of our product candidates and overall treatment experience, including, for example, the convenience of any dosing regimen; ​ ● the cost of treatment with our product candidates in relation to alternative treatments and reimbursement levels, if any, and willingness to pay for the product, if approved, on the part of insurance companies and other third-party payors, physicians and patients; ​ ● the revenue and profitability that our products may offer a physician as compared to alternative therapies; ​ ● limitations or warnings contained in the FDA-approved labeling for our products; ​ 83 Table of Contents ● any FDA requirement to undertake a REMS; ​ ● the effectiveness of our sales, marketing and distribution efforts; ​ ● adverse publicity about our products or favorable publicity about competitive products; and ​ ● potential product liability claims. ​ ​ We cannot assure you that our current or future product candidates, if approved, will achieve broad market acceptance among physicians, patients, healthcare payors and others in the medical community.
As a result we may not be able to obtain 86 Table of Contents regulatory approval in a timely fashion, or at all, for the applicable product candidate, our business, financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed . ​ We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.
As a result we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, our business, financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed . ​ 86 Table of Contents We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.
We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry. ​ 91 Table of Contents At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. ​ We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures. ​ If we develop a small molecule product candidate that obtains regulatory approval, additional competitors could enter the market with generic versions of such drugs, which may result in a material decline in sales of affected products.
We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry. ​ At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. ​ We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures. ​ 91 Table of Contents If we develop a small molecule product candidate that obtains regulatory approval, additional competitors could enter the market with generic versions of such drugs, which may result in a material decline in sales of affected products.
These provisions include the following: ​ ● a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; ​ ● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ​ ● the exclusive right of our board of directors to elect a director to fill a vacancy, however occurring, including by an expansion of the board of directors, which prevents stockholders from being able to fill vacancies on our board of directors; ​ ● the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including voting or other rights or preferences, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; ​ ● the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; ​ ● the required approval of at least 6 6 2 ∕ 3 % of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; ​ 98 Table of Contents ● a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; ​ ● the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and ​ ● advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us. ​ ​ We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law, or the DGCL.
These provisions include the following: ​ ● a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; ​ ● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ​ ● the exclusive right of our board of directors to elect a director to fill a vacancy, however occurring, including by an expansion of the board of directors, which prevents stockholders from being able to fill vacancies on our board of directors; ​ ● the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including voting or other rights or preferences, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; ​ ● the ability of our board of directors to alter our second amended and restated bylaws without obtaining stockholder approval; ​ ● the required approval of at least 6 6 2 ∕ 3 % of the shares entitled to vote at an election of directors to adopt, amend or repeal our second amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; ​ ● a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; ​ ● the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and ​ ● advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us. ​ ​ 98 Table of Contents We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law, or the DGCL.
We anticipate that our expenses will increase substantially for the foreseeable future as we: ​ ● conduct our ongoing and planned clinical trials of CT1812, as well as initiate and complete additional clinical trials; ● pursue regulatory approval of CT1812 for the treatment of mild-to-moderate Alzheimer’s disease, or AD, dry age-related macular degeneration, or GA secondary to dry AMD, and Parkinson’s disease, or PD, and dementia with Lewy bodies, or DLB, and other age-related degenerative diseases and disorders of the central nervous system, or CNS, and retina; ● seek to discover and develop additional clinical and preclinical product candidates from libraries generated using Novel Improved Conditioned Extraction, or NICE, screening platform, as well as other molecule generating and screening strategies; ● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, manufacturing and scientific personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; ● incur additional legal, accounting and other expenses in operating as a public company; ● scale up our clinical and regulatory capabilities; and 49 Table of Contents ● establish a commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval, including CT1812. ​ To become and remain profitable, we must succeed in developing and eventually commercializing product candidates that generate significant revenue.
We anticipate that our expenses will increase substantially for the foreseeable future as we: ​ ● conduct our ongoing and planned clinical trials of CT1812, as well as initiate and complete additional clinical trials; ● pursue regulatory approval of CT1812 for the treatment of mild-to-moderate Alzheimer’s disease, or AD, dry age-related macular degeneration, or GA secondary to dry AMD, and Parkinson’s disease, or PD, and dementia with Lewy bodies, or DLB, and other age-related degenerative diseases and disorders of the central nervous system, or CNS, and retina; ● seek to discover and develop additional clinical and preclinical product candidates from libraries generated using Novel Improved Conditioned Extraction, or NICE, screening platform, as well as other molecule generating and screening strategies; ● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; ● maintain, expand and protect our intellectual property portfolio; ● hire and retain additional clinical, manufacturing and scientific personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; ● incur additional legal, accounting and other expenses in operating as a public company; 49 Table of Contents ● scale up our clinical and regulatory capabilities; and ● establish a commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval, including CT1812. ​ To become and remain profitable, we must succeed in developing and eventually commercializing product candidates that generate significant revenue.
Our third amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the United States District Court for the District of Delaware or other state courts of the State of Delaware) is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our third amended and restated certificate of incorporation or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. ​ Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Our third amended and restated certificate of incorporation and second amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the United States District Court for the District of Delaware or other state courts of the State of Delaware) is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our third amended and restated certificate of incorporation or our second amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. ​ Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
The Tax Act, enacted on December 22, 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, or the Code or the individual mandate. ​ Other legislative changes have been proposed and adopted since the passage of the Affordable Care Act.
For example, the Tax Act, enacted on December 22, 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, or the Code or the individual mandate. ​ Other legislative changes have been proposed and adopted since the passage of the Affordable Care Act.
Our third amended and restated certificate of incorporation and amended and restated bylaws, however, provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.
Our third amended and restated certificate of incorporation and second amended and restated bylaws, however, provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.
Our third amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our third amended and restated certificate of incorporation and second amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government ; ​ ● HIPAA , which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation ; ​ ​ ● state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities ; ​ ​ ● the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; beginning in 2022, applicable manufacturers are required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives ; ​ ​ ​ ● the U.S.
False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using 92 Table of Contents or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government ; ​ ● HIPAA , which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation ; ​ ​ ● state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities ; ​ ​ ● the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; applicable manufacturers are also required to report such information regarding payments and transfers of value provided during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives ; ​ ​ ​ ● the U.S.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office and foreign political parties or officials thereof; and ​ 93 Table of Contents ● similar data protection and healthcare laws and regulations in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of personal data, including the GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the European Union and European Economic Area (including with regard to health data ). ​ Violations of any of these laws or any other governmental regulations that may apply to us, may subject us to significant civil, criminal and administrative sanctions including penalties, damages, fines, imprisonment, and exclusion from government funded healthcare programs, such as Medicare and Medicaid, and/or adverse publicity.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office and foreign political parties or officials thereof; and ​ ● similar data protection and healthcare laws and regulations in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of personal data, including the GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the European Union and European Economic Area (including with regard to health data ). ​ Violations of any of these laws or any other governmental regulations that may apply to us, may subject us to significant civil, criminal and administrative sanctions including penalties, damages, fines, imprisonment, and exclusion from government funded healthcare programs, such as Medicare and Medicaid, and/or adverse publicity.
We have established physical, electronic and organizational measures designed to safeguard and secure our systems to prevent a data compromise, and rely on commercially available systems, software, tools and monitoring to provide security for our information technology systems and the processing, transmission and storage of digital information.
We have established physical, electronic and organizational measures designed to safeguard and secure our systems and infrastructure to prevent a data compromise, and rely on commercially available systems, software, tools and monitoring to provide security for our information technology systems and infrastructure and the processing, transmission and storage of digital information.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including: ​ ● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting ; ​ ● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements ; ​ ● reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements ; and ​ ● not being required to hold a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved . ​ ​ We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including: ​ ● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting ; ​ 95 Table of Contents ● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements ; ​ ● reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements ; and ​ ● not being required to hold a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved . ​ ​ We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.
Our internal information technology systems and infrastructure, and those of any future collaborators and our contractors, consultants, vendors and other third parties on which we rely, are vulnerable to damage or unauthorized access or use resulting from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, denial or degradation of service attacks, ransomware, hacking, phishing schemes intended to cause an unauthorized transfer of funds and other social engineering attacks, attachments to emails, persons inside our organization or persons with access to systems inside our organization. ​ The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Our internal information technology systems and infrastructure, and those of any future collaborators and our contractors, consultants, vendors and other third parties on which we rely, are vulnerable to damage, disruption, security compromise or incident, or other unauthorized access or use resulting from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, denial or degradation of service attacks, ransomware, hacking, phishing schemes intended to cause an unauthorized transfer of funds and other social engineering attacks, attachments to emails, persons inside our organization or persons with access to systems and data inside our organization. ​ The risk of a security compromise, incident, breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
For example, the loss or misappropriation of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
The changes in the carryforward and carryback periods as well as the limitation on use of NOL carryforwards may significantly impact our ability to use NOL carryforwards, particularly for tax years beginning after December 31, 2022, as well as the timing of any such use, and could adversely affect our results of operations . ​ Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
The changes in the carryforward and carryback periods as well as the limitation on use of NOL carryforwards may significantly impact our ability to use NOL carryforwards, particularly for tax years beginning after December 31, 2023, as well as the timing of any such use, and could adversely affect our results of operations . ​ Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
Our third amended and restated certificate of incorporation and amended and restated bylaws each contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors.
Our third amended and restated certificate of incorporation and second amended and restated bylaws each contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors.
Concurrently with the filing of such registration statement, we entered into an "at-the-market" offering program, or ATM, which provides for the offering, issuance and sale by us of up shares of our common stock from time to time for aggregate gross proceeds of up to $40 million in sales deemed to be “at-the-market offerings” as defined by the Securities Act of 1933, as amended.
Concurrently with the filing of such registration statement, we entered into an "at-the-market" offering program, or ATM, which provides for the offering, issuance and sale by us of up shares of our common stock from time to time for aggregate gross proceeds of up to $40 million in sales deemed to be “at-the-market” as defined by the Securities Act of 1933, as amended.
The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates when studied in a controlled environment with a placebo or active control. ​ 60 Table of Contents For all of the foregoing reasons, we cannot be certain that any of our ongoing and planned preclinical studies or clinical trials will be successful or acceptable to the FDA or other regulatory authorities . ​ Interim “top-line” and preliminary data from studies or trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.
The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates when studied in a controlled environment with a placebo or active control. ​ For all of the foregoing reasons, we cannot be certain that any of our ongoing and planned preclinical studies or clinical trials will be successful or acceptable to the FDA or other regulatory authorities . ​ Interim “top-line” and preliminary data from studies or trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms. 101 Table of Contents ​ We are subject to Section 404 and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms. ​ We are subject to Section 404 and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting.
If the results of our ongoing or future clinical studies are inconclusive with respect to the efficacy of our product candidates, if we do not meet the clinical endpoints with statistical significance or if there are safety concerns or adverse events associated with our product candidates, we may be prevented or delayed in obtaining marketing approval for our product candidates. ​ In addition, to obtain regulatory approval in countries outside the United States, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates.
If the results of our ongoing or future clinical studies are inconclusive with respect to the efficacy of our product candidates, if we do not meet the clinical endpoints with statistical significance or if there are safety concerns or adverse events associated with our product candidates, we may be prevented or delayed in obtaining marketing approval for our product candidates. ​ 56 Table of Contents In addition, to obtain regulatory approval in countries outside the United States, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates.
These laws include: ​ 92 Table of Contents ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, or arranging for or recommending the purchase, lease or order of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid.
These laws include: ​ ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, or arranging for or recommending the purchase, lease or order of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid.
We will need to successfully complete pivotal clinical trials in order to obtain the approval of the FDA, the European Medicines Agency, or EMA, or other regulatory agencies to market CT1812 or any future product candidate. Carrying out pivotal clinical trials is a complicated process that requires significant financial resources.
We will need to successfully initiate and complete pivotal clinical trials in order to obtain the approval of the FDA, the European Medicines Agency, or EMA, or other regulatory agencies to market CT1812 or any future product candidate. Carrying out pivotal clinical trials is a complicated process that requires significant financial resources.
If our manufacturers or we are unable to purchase the raw materials necessary for the manufacture of our product candidates on acceptable terms, at sufficient quality levels or in adequate quantities, if at all, the commercial launch of our product candidates, if approved, would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of such product candidates, if approved . ​ Our product candidates have never been manufactured on a commercial scale, and there are risks associated with scaling up manufacturing to commercial scale.
If our manufacturers or we are unable to purchase the raw materials necessary for the manufacture of our product candidates on acceptable terms, at sufficient quality levels or in adequate quantities, if at all, the commercial launch of our product candidates, if approved, would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of such product candidates, if approved . ​ 85 Table of Contents Our product candidates have never been manufactured on a commercial scale, and there are risks associated with scaling up manufacturing to commercial scale.
Accordingly, in markets outside the United States, the reimbursement for our product candidates may be reduced compared with the United States and may be insufficient to generate commercially- reasonable revenue and profits. ​ Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products, and, as a result, they may not cover or provide adequate payment for our product candidates.
Accordingly, in markets outside the United States, the reimbursement for our product candidates may be reduced compared with the United States and may be insufficient to generate commercially- reasonable revenue and profits. 88 Table of Contents ​ Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products, and, as a result, they may not cover or provide adequate payment for our product candidates.
We may face increased risks of a security breach or disruption due to our reliance on internet technology and the number of our employees who work on a hybrid basis, at home and in the office. This may create additional opportunities for cybercriminals to exploit vulnerabilities.
We may face increased risks of a security compromise, incident, breach or disruption due to our reliance on internet technology and the number of our employees who work on a hybrid basis, at home and in the office. This may create additional opportunities for cybercriminals to exploit vulnerabilities.
For example, because many of these stockholders purchased their shares at prices substantially below the current market price of our common stock and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders. ​ Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
For example, because many of these stockholders purchased their shares at prices substantially below the current market price of our common stock and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders. ​ 96 Table of Contents Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
If we do not file a patent infringement lawsuit within the required 45-day period, the third party’s ANDA will not be subject to the 30-month stay of FDA approval. ​ Moreover, a third party may challenge the current patents, or patents that may issue in the future, within our portfolio which could result in the invalidation of some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products.
If we do not 74 Table of Contents file a patent infringement lawsuit within the required 45-day period, the third party’s ANDA will not be subject to the 30-month stay of FDA approval. ​ Moreover, a third party may challenge the current patents, or patents that may issue in the future, within our portfolio which could result in the invalidation of some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products.
These factors include those discussed in this “Risk Factors” section and others such as: ​ ● the commencement, enrollment, or results of our current and future preclinical studies and clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ​ ● regulatory approval of our product candidates, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ​ ● regulatory developments in the United States and foreign countries; ​ ● changes in the structure of healthcare payment systems, especially in light of current reforms to the United States healthcare system; ​ ● the success or failure of our efforts to acquire, license, or develop additional product candidates; ​ ● innovations or new products developed by us or our competitors; ​ ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; ​ ● manufacturing, supply or distribution delays or shortages; ​ ● any changes to our relationship with manufacturers, suppliers, licensors, future collaborators, or other strategic partners; ​ ● achievement of expected product sales and profitability; ​ ● variations in our financial results or those of companies that are perceived to be similar to us; ​ ● market conditions in the biopharmaceutical sector and issuance of securities analysts’ reports or recommendations; ​ ● trading volume of our common stock; ​ ● an inability to obtain additional funding; ​ ● sales of our stock by insiders and stockholders; ​​ ● additions or departures of key personnel; ​ ● intellectual property, product liability, or other litigation against us; and ​ ● general economic, industry and market conditions, including with respect to the financial markets in the United States and worldwide resulting from inflation, the ongoing COVID-19 pandemic and the conflict between Russia and Ukraine. 95 Table of Contents ​ ​ In addition, the stock markets in general, and the markets for biopharmaceutical stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer.
These factors include those discussed in this “Risk Factors” section and others such as: ​ ● the commencement, enrollment, or results of our current and future preclinical studies and clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ​ ● regulatory approval of our product candidates, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ​ 94 Table of Contents ● regulatory developments in the United States and foreign countries; ​ ● changes in the structure of healthcare payment systems, especially in light of current reforms to the United States healthcare system; ​ ● the success or failure of our efforts to acquire, license, or develop additional product candidates; ​ ● innovations or new products developed by us or our competitors; ​ ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; ​ ● manufacturing, supply or distribution delays or shortages; ​ ● any changes to our relationship with manufacturers, suppliers, licensors, future collaborators, or other strategic partners; ​ ● achievement of expected product sales and profitability; ​ ● variations in our financial results or those of companies that are perceived to be similar to us; ​ ● market conditions in the biopharmaceutical sector and issuance of securities analysts’ reports or recommendations; ​ ● trading volume of our common stock; ​ ● an inability to obtain additional funding; ​ ● sales of our stock by insiders and stockholders; ​​ ● additions or departures of key personnel; ​ ● intellectual property, product liability, or other litigation against us; and ​ ● general economic, industry and market conditions, including with respect to the financial markets in the United States and worldwide resulting from inflation, the COVID-19 pandemic and ongoing global and regional conflicts. ​ ​ In addition, the stock markets in general, and the markets for biopharmaceutical stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. ​ In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. ​ 80 Table of Contents In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
A key element of our strategy is to build and expand our pipeline of product candidates, including by developing CT1812 for the treatment of GA secondary to dry AMD and age-related degenerative diseases and disorders of the CNS beyond indications in AD, and by identifying other product candidates from libraries created using our NICE platform as 55 Table of Contents well as new molecule and screening strategies.
A key element of our strategy is to build and expand our pipeline of product candidates, including by developing CT1812 for the treatment of GA secondary to dry AMD and age-related degenerative diseases and disorders of the CNS beyond indications in AD, and by identifying other product candidates from libraries created using our NICE platform as well as new molecule and screening strategies.
If a court were to find the choice of forum provision contained in our third amended and restated certificate of incorporation and amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur 99 Table of Contents additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition . ​ We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
If a court were to find the choice of forum provision contained in our third amended and restated certificate of incorporation and second amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition . ​ We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures and lead to regulatory scrutiny. ​ Moreover, if a computer security breach affects our systems or results in the unauthorized access to or unauthorized use, disclosure, release or other processing of personally identifiable information or clinical trial data, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media and other parties pursuant to privacy and security laws, and our reputation could be materially damaged.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures and lead to regulatory scrutiny. ​ Moreover, if a computer security compromise or breach affects our systems or infrastructure or results in the unauthorized access to or unauthorized use, disclosure, release or other processing of personal information or clinical trial data, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media and other parties pursuant to privacy and security laws, and our reputation could be materially damaged.
Moreover, government entities and private litigants have asserted claims under state consumer protection statutes against pharmaceutical companies for alleged false or misleading statements in connection with the marketing, promotion and/or sale of pharmaceutical products. Further, defending against any such actions can be costly and time-consuming and may require significant personnel resources.
Moreover, government entities and private litigants have asserted claims under state consumer protection statutes against pharmaceutical companies for alleged false or misleading statements in connection with the marketing, promotion and/or sale of pharmaceutical products. Further, defending against any such actions can be costly and 93 Table of Contents time-consuming and may require significant personnel resources.
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in product candidates that we may develop not receiving approval or clearance for commercialization in the applicable jurisdiction .
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects 63 Table of Contents of our business plan, and which may result in product candidates that we may develop not receiving approval or clearance for commercialization in the applicable jurisdiction .
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business . ​ 77 Table of Contents We may become involved in lawsuits to protect or enforce our patents or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business . ​ We may become involved in lawsuits to protect or enforce our patents or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.
The ability of the FDA to review and/or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to 62 Table of Contents hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
The ability of the FDA to review and/or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of our product candidates or any future product candidates to continue our business or achieve profitability . ​ We may not successfully expand our pipeline of product candidates, including by pursuing additional indications for CT1812 or by in-licensing or acquiring additional product candidates for other diseases.
Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of our product candidates or any future product candidates to continue our business or achieve profitability . ​ 55 Table of Contents We may not successfully expand our pipeline of product candidates, including by pursuing additional indications for CT1812 or by in-licensing or acquiring additional product candidates for other diseases.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. ​ 76 Table of Contents Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. ​ Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources.
Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue . ​ The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies.
Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue . ​ 87 Table of Contents The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies.
The holder of an approved application must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specific patient subsets.
The holder of an approved application must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify 89 Table of Contents the safety and efficacy of our products in general or in specific patient subsets.
This could result in a longer than expected regulatory review process, increased expected development costs or the delay or prevention of commercialization of CT1812 for the treatment of AD . ​ We have never conducted pivotal clinical trials, and we may be unable to do so for any product candidates we may develop.
This could result in a longer than expected regulatory review process, increased expected development costs or the delay or prevention of commercialization of CT1812 for the treatment of AD . ​ 61 Table of Contents We have never conducted pivotal clinical trials, and we may be unable to do so for any product candidates we may develop.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by 79 Table of Contents our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Efforts by biopharmaceutical and pharmaceutical companies in treating AD have seen limited success in drug development. Only two disease-modifying therapeutic option has been approved by the FDA. Specifically, Biogen’s Aduhelm received accelerated approval on June 7, 2021 and the FDA granted accelerated approval to Eisai’s Leqembi on January 6, 2023.
Efforts by biopharmaceutical and pharmaceutical companies in treating AD have seen limited success in drug development. Only two disease-modifying therapeutic options have been approved by the FDA. Specifically, Biogen’s Aduhelm received accelerated approval on June 7, 2021 and the FDA granted accelerated approval to Eisai’s Leqembi on January 6, 2023.
The Affordable Care Act is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy 90 Table of Contents reforms.
The Affordable Care Act is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.
Once we are deemed to be a large accelerated filer or an accelerated filer, we will be required to include an attestation report on internal control over financial reporting. ​ During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports.
Once we are deemed to be a large accelerated filer or an accelerated filer, we will be required to include an attestation report on internal control over financial reporting. ​ 101 Table of Contents During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports.
We would also be exposed to a risk of loss, governmental investigations or enforcement, or litigation and potential liability, which could materially adversely affect our business, results of operations and financial condition . ​ 68 Table of Contents Failure to comply with health and data protection laws and regulations could lead to government enforcement actions and civil or criminal penalties, private litigation or adverse publicity and could negatively affect our operating results and business.
We would also be exposed to a risk of loss, governmental investigations or enforcement, litigation, fines, penalties, and other potential legal and financial exposure and liability, which could materially adversely affect our business, results of operations and financial condition . ​ 68 Table of Contents Failure to comply with health and data protection laws and regulations could lead to government enforcement actions and civil or criminal penalties, private litigation or adverse publicity and could negatively affect our operating results and business.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the 60 Table of Contents physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable 84 Table of Contents regulatory authorities in foreign jurisdictions, we may not be able to rely on their manufacturing facilities for the manufacture of our product candidates.
If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable regulatory authorities in foreign jurisdictions, we may not be able to rely on their manufacturing facilities for the manufacture of our product candidates.
If our board of directors elects to increase the number of shares available for future grant under the 2021 Plan, our stockholders may experience additional dilution, and our stock price may fall. ​ 97 Table of Contents Our ability to use net operating loss carryforwards and other tax attributes may be limited.
If our board of directors elects to increase the number of shares available for future grant under the 2021 Plan, our stockholders may experience additional dilution, and our stock price may fall. ​ Our ability to use net operating loss carryforwards and other tax attributes may be limited.
In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our 77 Table of Contents patents do not cover the technology in question.
Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. ​ 89 Table of Contents We will have to comply with requirements concerning advertising and promotion for any future products.
Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. ​ We will have to comply with requirements concerning advertising and promotion for any future products.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other 100 Table of Contents obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management . ​ Item 1B. Unresolved Staff Comments None. ​ 102 Table of Contents
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management . ​ Item 1B. Unresolved Staff Comments None. ​
If the third party submits a paragraph IV certification to the FDA, a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing by the FDA. We may then initiate a lawsuit to defend the 74 Table of Contents patents identified in the notice.
If the third party submits a paragraph IV certification to the FDA, a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing by the FDA. We may then initiate a lawsuit to defend the patents identified in the notice.
The historical failure rate for product candidates in our industry is high. ​ The results from preclinical studies or clinical trials of a product candidate may not predict the results of later clinical trials of the product candidate, and interim, topline, or preliminary results of a clinical trial are not necessarily indicative of final results.
The historical failure rate for product candidates in our industry is high. ​ The results from preclinical studies or clinical trials of a product candidate may not predict the results of later clinical trials of the product candidate, and interim, top-line, or preliminary results of a clinical trial are not necessarily indicative of final results.
Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize 100 Table of Contents our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general.
Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us from manufacturing, marketing or otherwise commercializing our products, services and technology.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product 76 Table of Contents shipment delays, or prohibit us from manufacturing, marketing or otherwise commercializing our products, services and technology.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed . Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed . 81 Table of Contents Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.
See “Risks Related to Our Intellectual Property.” The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish 87 Table of Contents adequate coverage, reimbursement levels and pricing policies.
See “Risks Related to Our Intellectual Property.” The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies.
A severe or prolonged economic downturn, including rises in interest rates, liquidity constraints, failures and instability in U.S. and international financial banking systems, inflation, recession or depression, or political disruption has and could result in a variety of risks to our business, including weakened demand for our product candidates or any future product candidates, if approved, and our ability to raise additional capital when needed on acceptable terms, if at all.
A severe or prolonged economic downturn, including rises in interest rates, liquidity constraints, failures and instability in the United States and international financial banking systems, inflation, recession or depression, or political disruption has and could result in a variety of risks to our business, including weakened demand for our product candidates or any future product candidates, if approved, and our ability to raise additional capital when needed on acceptable terms, if at all.
In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical 88 Table of Contents products, but monitor and control company profits.
In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products, but monitor and control company profits.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop . ​ 79 Table of Contents Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop . ​ Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
As of March 1, 2023, we had 22 full-time and 3 part-time employees. We will need to continue to expand our managerial, operational, finance and other resources in order to manage our operations and clinical trials, continue our development activities and commercialize CT1812, our lead product candidate, or any future product candidates.
As of March 1, 2024, we had 25 full-time and 3 part-time employees. We will need to continue to expand our managerial, operational, finance and other resources in order to manage our operations and clinical trials, continue our development activities and commercialize CT1812, our lead product candidate, or any future product candidates.
Despite these efforts, any of these parties may 81 Table of Contents breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
In addition, the Phase 1 single and multiple ascending dose studies of CT1812 in healthy volunteers (COG0101) as well as the first-in-patient study (COG0102) were conducted in Australia. We have opened additional clinical trial site in the Netherlands and are opening sites in the Czech Republic and Spain for our SHINE study.
In addition, the Phase 1 single and multiple ascending dose studies of CT1812 in healthy volunteers (COG0101) as well as the first-in-patient study (COG0102) were conducted in Australia. We opened additional clinical trial site in the Netherlands, Czech Republic and Spain for our SHINE study.
A decline in the value of our company could also cause you to lose all or part of your investment. We have not yet completed Phase 2 clinical trials and have no history of commercializing products, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.
A decline in the value of our company could also cause you to lose all or part of your investment. We are conducting Phase 2 clinical trials and have no history of commercializing products, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed8 unchanged
Biggest changePrior to that time, there was no public market for our common stock. ​ Holders ​ As of March 20, 2023, there were approximately 29,262,587 shares of our common stock outstanding held by approximately 256 holders of record.
Biggest changePrior to that time, there was no public market for our common stock. ​ Holders ​ As of March 22, 2024, there were approximately 39,000,152 shares of our common stock outstanding held by approximately 277 holders of record.
Our future ability to pay cash dividends on our common stock may be limited by any future debt instruments or preferred securities. ​ Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of this Annual Report on Form 10-K. ​ Recent Sales of Unregistered Securities ​ There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2022. ​ Purchases of Equity Securities by the Issuer or Affiliated Purchaser ​ We did not purchase any of our registered equity securities during the fiscal year ended December 31, 2022.
Our future ability to pay cash dividends on our common stock may be limited by any future debt instruments or preferred securities. ​ Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of this Annual Report on Form 10-K. ​ Recent Sales of Unregistered Securities ​ There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2023. ​ Purchases of Equity Securities by the Issuer or Affiliated Purchaser ​ We did not purchase any of our registered equity securities during the fiscal year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+19 added−19 removed54 unchanged
Biggest changeOther income (expense), net Other income (expense), net consists primarily of research and development tax credits earned in the applicable period, as well as foreign currency transaction gains or losses, and interest income from interest-bearing cash equivalents. 109 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ (in thousands) 2022 2021 Change Consolidated Statements of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ Research and development ​ $ 30,324 ​ $ 18,572 ​ $ 11,752 General and administrative ​ 13,227 ​ 10,026 ​ 3,201 Total operating expenses ​ 43,551 ​ 28,598 ​ 14,953 Loss from operations ​ (43,551) ​ (28,598) ​ (14,953) Other income (expense): ​ ​ ​ ​ Grant income ​ 22,217 ​ 17,447 ​ 4,770 Change in the fair value of the derivative liability ​ — ​ 2,209 ​ (2,209) Change in the fair value of SAFE ​ ​ — ​ (2,236) ​ 2,236 Other income (expense), net ​ (35) ​ (88) ​ 53 Gain on debt extinguishment ​ — ​ 443 ​ (443) Interest expense ​ (28) ​ (893) ​ 865 Total other income, net ​ 22,154 ​ 16,882 ​ 5,272 Net Loss ​ $ (21,397) ​ $ (11,716) ​ $ (9,681) ​ Research and Development Expenses The following table summarizes our research and development expenses (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2022 2021 Change Clinical programs ​ $ 15,782 ​ $ 4,679 ​ $ 11,103 Personnel ​ 7,481 ​ 4,882 ​ 2,599 Manufacturing ​ 4,661 ​ 7,465 ​ (2,804) Preclinical programs ​ 2,178 ​ 1,426 ​ 752 Facilities and other costs ​ 222 ​ 120 ​ 102 ​ ​ $ 30,324 ​ $ 18,572 ​ $ 11,752 ​ Research and development expenses were $30.3 million for the year ended December 31, 2022, compared to $18.6 million for the year ended December 31, 2021.
Biggest changeOther Income (Expense), Net Other income (expense), net consists primarily of interest income from money market funds, other fees such as offering costs incurred to establish our equity line financing, as well as foreign currency transaction gains or losses. 109 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ (in thousands) 2023 2022 Change Consolidated Statements of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ Research and development ​ $ 37,196 ​ $ 30,324 ​ $ 6,872 General and administrative ​ 13,528 ​ 13,227 ​ 301 Total operating expenses ​ 50,724 ​ 43,551 ​ 7,173 Loss from operations ​ (50,724) ​ (43,551) ​ (7,173) Other income (expense): ​ ​ ​ ​ Grant income ​ 24,805 ​ 22,217 ​ 2,588 Other income (expense), net ​ 158 ​ (35) ​ 193 Interest expense ​ (27) ​ (28) ​ 1 Total other income, net ​ 24,936 ​ 22,154 ​ 2,782 Net Loss ​ $ (25,788) ​ $ (21,397) ​ $ (4,391) ​ Research and Development Expenses The following table summarizes our research and development expenses (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2023 2022 Change Clinical programs ​ $ 21,180 $ 15,782 ​ $ 5,398 Personnel ​ 9,193 ​ ​ 7,481 ​ 1,712 Preclinical programs ​ 3,503 ​ ​ 2,178 ​ 1,325 Manufacturing ​ 2,890 ​ ​ 4,661 ​ (1,771) Other expense ​ 430 ​ ​ 222 ​ 208 Total research & development expenses ​ $ 37,196 ​ $ 30,324 ​ $ 6,872 ​ Research and development expenses were $37.2 million for the year ended December 31, 2023, compared to $30.3 million for the year ended December 31, 2022.
To the extent available, we expect to continue our pursuit of non-dilutive research contributions, or grants, including additional NIA grant funding. However, we may fail to receive additional NIA Grants, or we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all.
To the extent available, we expect to continue our pursuit of non-dilutive research contributions, or grants, including additional NIA grant funding. However, we may fail to receive additional NIA grants, or we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all.
Our failure to obtain additional NIA Grants or raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition.
Our failure to obtain additional NIA grants or raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition.
While the potential further economic impact brought by, and the duration of, the COVID 19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.
While the potential further economic impact brought by the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.
Our future funding requirements will depend on many factors, including, but not limited to: ● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to the COVID-19 pandemic or other diseases, macroeconomic conditions, global or political instability, such as the ongoing conflict between Ukraine and Russia, inflation, or other delays; ● the scope, progress, costs and results of preclinical development, laboratory testing and clinical trials for any future product candidates we may decide to pursue; 112 Table of Contents ● the extent to which we develop, in-license or acquire other product candidates and technologies; ● the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; ● the availability, timing, and receipt of any future NIA Grants; ● the number and development requirements of other product candidates that we may pursue; ● the costs, timing and outcome of regulatory review of our product candidates; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; ● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; ● our ability to establish collaborations to commercialize CT1812 or any of our other product candidates outside the United States; ● 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; and ● 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.
Our future funding requirements will depend on many factors, including, but not limited to: ● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to a pandemic, such as the COVID-19 pandemic, or other diseases, macroeconomic conditions, global or political instability, such as the ongoing global and regional conflicts, inflation, or other delays; ● the scope, progress, costs and results of preclinical development, laboratory testing and clinical trials for any future product candidates we may decide to pursue; ● the extent to which we develop, in-license or acquire other product candidates and technologies; ● the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; ● the availability, timing, and receipt of any future NIA grants; ● the number and development requirements of other product candidates that we may pursue; ● the costs, timing and outcome of regulatory review of our product candidates; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; ● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; 112 Table of Contents ● our ability to establish collaborations to commercialize CT1812 or any of our other product candidates outside the United States; ● 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; and ● 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.
Our goal is to develop disease modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor, or S2R, which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.
Our goal is to develop disease-modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor (“S2R”), which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.
As such, the expected volatility was derived from the average historical stock volatilities of the common stock of several public companies within the industry that the Company considers to be comparable to our business over a period equivalent to the expected term of the stock-based awards.
As such, the expected volatility was derived from the average historical stock volatilities of the common stock of several public companies within the industry that the Company considers to 115 Table of Contents be comparable to our business over a period equivalent to the expected term of the stock-based awards.
We do not own or operate manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of CT1812 for preclinical studies and clinical trials, as well as for commercial manufacture if CT1812 obtains marketing approval.
We do not own or operate manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of CT1812 for preclinical studies and clinical trials, as well as for commercial manufacture if CT1812 obtains 107 Table of Contents marketing approval.
Under the agreement, we financed $0.8 million of certain premiums at a 6.85% annual interest rate. Payments of less than $0.1 million are due monthly from October 2022 through September 2023. As of December 31, 2022, the outstanding principal of the loan was $0.6 million.
Under the agreement, we financed $0.8 million of certain premiums at a 6.85% annual interest rate. Payments of less than $0.1 million are due monthly from October 2022 through September 2023. As of December 31, 2023, there was no remaining outstanding principal on the loan.
We enter into contracts in the normal course of business with contract research organizations and other vendors to assist in the performance of our research and development and other services and products for operating purposes.
We enter into contracts in the normal course of business with CROs and other vendors to assist in the performance of our research and development and other services and products for operating purposes.
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 December 31, 2022, we had an accumulated deficit of $115.4 million.
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 December 31, 2023, we had an accumulated deficit of $141.2 million.
The grants awarded relate to agreed upon direct and indirect costs for specific studies or clinical trials, which may include personnel 108 Table of Contents and consulting costs, costs paid to contract research organizations, research institutions and /or consortiums involved in the grant, as well as facilities and administrative costs.
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.
As of December 31, 2022, we had cash and cash equivalents of $41.6 million. On October 13, 2021, we completed our IPO, pursuant to which we issued and sold 3,768,116 shares of our common stock at a public offering price of $12.00 per share.
As of December 31, 2023, we had cash and cash equivalents of $29.9 million. On October 13, 2021, we completed our IPO, pursuant to which we issued and sold 3,768,116 shares of our common stock at a public offering price of $12.00 per share.
On November 15, 2022, we closed our follow-on public offering, selling 5,000,000 shares of our common stock at a public offering price of $1.20 per share. The net proceeds were approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.
The net proceeds from our IPO, which closed on October 13, 2021, were approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us. On November 15, 2022, we closed our follow-on public offering, selling 5,000,000 shares of our common stock at a public offering price of $1.20 per share.
The increase of $3.2 million was primarily due to: ● an increase of $1.1 million in Director & Officer liability insurance and other expenses; and ● an increase of $0.8 million in compensation and employee benefits driven by increased headcount; and ● an increase of $2.6 million in professional fees driven by increased audit, tax, and legal services; and ● a decrease of $1.3 million in equity-based compensation from stock option grants.
The increase of $0.3 million was primarily due to: ● an increase of $0.6 million in equity-based compensation from stock option grants and restricted stock unit (“RSU”); ● an increase of $0.3 million in compensation and employee benefits driven by increased headcount; ● a decrease of $0.2 million in professional fees driven by decreased audit, tax, and legal services; and ● a decrease of $0.4 million in Director & Officer liability insurance and other expenses.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic or other diseases, the ongoing conflict between Ukraine and Russia, inflation, liquidity constraints, failures and instability in U.S. and international financial banking systems, and otherwise.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the effects of the COVID-19 pandemic or other diseases, the ongoing global and regional conflicts, inflation, liquidity constraints, failures and instability in U.S. and international financial banking systems, and otherwise.
Investing Activities During the years ended December 31, 2022 and 2021, we used $0.2 and less than $0.1 million of cash, respectively, for investing activities related to purchases of property and equipment. Financing Activities Net cash provided by financing activities was $5.5 million and $53.2 million for the years ended December 31, 2022 and 2021, respectively.
Investing Activities During the years ended December 31, 2023 and 2022, we used $0.1 and $0.2 million of cash, respectively, for investing activities related to purchases of property and equipment. Financing Activities Net cash provided by financing activities was $4.5 million and $5.5 million for the years ended December 31, 2023 and 2022, respectively.
We believe that targeting the S2R complex represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.
We believe that targeting the S2R complex represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases. Recent clinical results support this hypothesis.
As of December 31, 2022, the Company has been awarded grants with project periods that extend through May 31, 2026, subject to extension.
As of December 31, 2023, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.
Based on our current business plans, we believe that the net proceeds from the IPO and follow-on public offering, together with 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 requirements into the second half of 2024, which assumes no usage from the ATM nor purchase agreement with Lincoln Park.
Based on our current business plans, we believe that our existing cash and cash equivalents, income from non-dilutive grants, and net proceeds from our March 2024 follow-on public offering will be sufficient for us to fund our operating expenses and capital expenditures requirements through May of 2025, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.
Emerging Growth Company Status We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
Impact of COVID-19 on Our Business Our business has been and could continue to be adversely affected by the effects of the ongoing COVID-19 pandemic, including, but not limited to, our clinical trials. For example, our ongoing and/or planned clinical trials may be impacted by interruptions or delays in the operations of the FDA and comparable foreign regulatory authorities.
Impact of COVID-19 on Our Business Our business has been and could be adversely affected by the effects of the COVID-19 pandemic or other national health issues. For example, our ongoing and/or planned clinical trials may be impacted by interruptions or delays in the operations of the FDA and comparable foreign regulatory authorities.
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 $108.8 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, our IPO and follow-on public offering.
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 $124.5 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO, follow-on public offerings, ATM, and equity line financing with Lincoln Park.
Other Income (Expense) Grant Income Grant income was $22.2 million for the year ended December 31, 2022, compared to $17.4 million for the year ended December 31, 2022. The change in grant income is correlated with the increase in eligible reimbursable costs incurred during 2022 as compared to 2021.
Other Income (Expense) Grant Income Grant income was $24.8 million for the year ended December 31, 2023, compared to $22.2 million for the year ended December 31, 2022. The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2023 as compared to 2022.
Since our inception, we have received grant awards primarily from the NIA in the aggregate amount of approximately $171.0 million and have raised approximately $108.8 million in net proceeds from sales of our equity securities, convertible notes and SAFE, stock option exercises, our IPO and our follow-on public offering.
Since our inception, we have received grant awards primarily from the NIA in the aggregate amount of approximately $171.0 million and have raised approximately $124.5 million in net proceeds from sales of our equity securities, convertible notes and SAFE, stock option exercises, our ATM, our equity line financing with Lincoln Park, our IPO and our follow-on public offerings.
Net cash used in operating activities for the year ended December 31, 2021 was $3.6 million, which consisted primarily of our net loss of $11.7 million partially offset by net non-cash charges of $5.2 million and a net change of $2.8 million in our operating assets and liabilities.
Net cash used in operating activities for the year ended December 31, 2022 was $18.5 million, which consisted primarily of our net loss of $21.4 million partially offset by net non-cash charges of $3.8 million and a net change of $0.9 million in our operating assets and liabilities.
On November 15, 2022, we completed our follow-on public offering, pursuant to which we issued and sold 5,000,000 shares of our common stock at a public offering price of $1.20 per share. In connection with the follow-on public offering, we received net proceeds of approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses.
In connection with the IPO, we received net proceeds of approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us, which includes net proceeds of approximately $6.3 million from the exercise of the over-allotment option. 106 Table of Contents On November 15, 2022, we completed our follow-on public offering, pursuant to which we issued and sold 5,000,000 shares of our common stock at a public offering price of $1.20 per share.
We incurred net losses of $21.4 million and $11.7 million for the years ended December 31, 2022 and 2021, respectively.
We incurred net losses of $25.8 million and $21.4 million for the years ended December 31, 2023 and 2022, respectively.
To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging, or NIA, a division of the National Institutes of Health, or NIH, and proceeds from our initial public offering, or IPO, completed in October 2021, proceeds from our follow-on public offering in November 2022, and the sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity, or SAFE, and stock option exercises.
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 in November 2022 and March 2024, 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.
We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, as we expand our product pipeline, as we maintain, expand, protect and enforce our intellectual property portfolio, and as we incur expenses associated with hiring additional personnel to support our research and development efforts.
We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, as we expand our product pipeline, as we maintain, expand, protect and enforce our intellectual property portfolio, and as we incur expenses associated with hiring additional personnel to support our research and development efforts. 108 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including employee salaries, related benefits, and stock-based compensation expense for our employees in the executive, finance and accounting, and other administrative functions.
For the year ended December 31, 2022, we have not sold any shares of common stock under the ATM. 106 Table of Contents 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 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.
The net change in our operating assets and liabilities was primarily due to an increase in accounts payable of $2.2 million, an increase in accrued expenses of $1.3 million, and an increase in other current liabilities of $0.5 million, partially offset by an increase in grant receivables of $1.2 million.
The net change in our operating assets and liabilities was primarily due to an increase in grant receivables of $2.4 million, an increase in prepaid expenses and other assets of $1.8 million, an increase in accounts payable and accrued expenses of $2.4 million, partially offset by a decrease in deferred grant income and other liabilities of $1.6 million, and a decrease of $0.1 million of operating lease liabilities.
The plan allows for the issuance of incentive stock options, non-qualified stock options, restricted stock units, and other forms of equity awards. We recognize equity-based compensation expense for stock options subject to time-based vesting on a straight-line basis over the requisite service period and account for forfeitures as they occur.
We recognize equity-based compensation expense for stock options subject to time-based vesting on a straight-line basis over the requisite service period and account for forfeitures as they occur.
Interest Expense Interest expense was less than $0.1 million for the year ended December 31, 2022, compared to interest expense of $0.9 million for the year ended December 31, 2021.
Interest Expense Interest expense was less than $0.1 million for the year ended December 31, 2023, compared to interest expense of less than $0.1 million for the year ended December 31, 2022. Interest expense was not significant in either period.
Additionally, on August 31, 2022, we modified one of our existing lease agreements with the landlord for approximately 3,706 square feet of lab space at the same location to extend the lease term termination date from June 30, 2023 until June 30, 2026.
Additionally, on August 31, 2022, we modified one of our existing lease agreements with the landlord for approximately 3,706 square feet of lab space at the same location to extend the lease term termination date from June 30, 2023 until June 30, 2026. 114 Table of Contents On July 1, 2021, we entered into an agreement to lease 2,864 square feet of office space in Purchase, New York.
The increase of $11.7 million was primarily due to the following: ● an increase of $11.1 million in clinical programs related to increased Phase 2 trial activity primarily due to increased contract research organization spend; and ● an increase of $2.6 million in personnel costs associated with expanded research and development activities; and ● a decrease of $2.8 million in manufacturing expense related to costs incurred with contract manufacturing organizations for production of pre-clinical and future clinical trial materials associated with our most advanced product candidates due to the timing of the manufacturing of the pre-clinical and clinical trial materials; and ● an increase of $0.9 million in preclinical programs, facilities and other costs primarily due to increased sponsored research spend under grants. 110 Table of Contents General and Administrative Expenses General and administrative expenses were $13.2 million for the year ended December 31, 2022, compared to $10.0 million for the year ended December 31, 2021.
The increase of $6.9 million was primarily due to the following: ● an increase of $5.4 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations; ● an increase of $1.7 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense; ● an increase of $1.5 million in preclinical programs, and other expense primarily due to increased research spend; and ● a decrease of $1.7 million in manufacturing related to lower costs with contract manufacturing organizations for the production of pre-clinical and future clinical trial supply. 110 Table of Contents General and Administrative Expenses General and administrative expenses were $13.5 million for the year ended December 31, 2023, compared to $13.2 million for the year ended December 31, 2022.
Overview We are a clinical-stage biopharmaceutical company engaged in the discovery and development of innovative, small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system, or CNS, and retina. Currently available therapies for these diseases are limited, with many diseases having no approved therapies or treatments.
Overview We are a clinical-stage biopharmaceutical company engaged in the discovery and development of innovative, small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system (“CNS”) and retina.
Costs for certain research and development activities are recognized based on the pattern of performance of the individual arrangements, which may differ from the pattern of billings incurred, and are reflected in the consolidated financial statements as prepaid expenses or as accrued research and development expenses. 115 Table of Contents Equity-Based Compensation We maintain an equity-based compensation plan as a long-term incentive for employees, non-employee directors and consultants.
Costs for certain research and development activities are recognized based on the pattern of performance of the individual arrangements, which may differ from the pattern of billings incurred, and are reflected in the consolidated financial statements as prepaid expenses or as accrued research and development expenses.
We cannot assure you that we will ever be profitable or generate positive cash flows from operating activities. 113 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Cash flows used in operating activities ​ $ (18,533) $ (3,631) Cash flows used in investing activities ​ (171) ​ (27) Cash flows provided by financing activities ​ 5,546 ​ 53,201 Effect of exchange rate changes on cash and cash equivalents ​ (1) ​ (11) Net (decrease) increase in cash and cash equivalents ​ $ (13,159) ​ $ 49,532 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2022 was $18.5 million, which consisted primarily of our net loss of $21.4 million partially offset by net non-cash charges of $3.8 million and a net change of $0.9 million in our operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Cash flows used in operating activities ​ $ (16,018) $ (18,533) Cash flows used in investing activities ​ (147) ​ (171) Cash flows provided by financing activities ​ 4,521 ​ 5,546 Effect of exchange rate changes on cash and cash equivalents ​ 4 ​ (1) Net decrease in cash and cash equivalents ​ $ (11,640) ​ $ (13,159) ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $16.0 million, which consisted primarily of our net loss of $25.8 million partially offset by net non-cash charges of $5.0 million and a net change of $4.8 million in our operating assets and liabilities.
Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.
Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flows from operating activities.
In addition, in March 2023, we entered into a 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 December 31, 2022, we had $41.6 million in cash and cash equivalents and have not generated positive cash flows from operations.
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 million worth of shares 111 Table of Contents of our common stock.
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 December 31, 2022, we have not sold any shares of common stock under the ATM.
The net proceeds were approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us. 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 million of our common stock from time to time in ATM offerings.
The annual base rent under the lease is less than $0.1 million for the first lease year and is subject to annual increases of between 1.82% and 2.04%. We provided a security deposit in the form of a Letter of Credit in the amount of less than $0.1 million pursuant to the terms of the lease.
We provided a security deposit in the form of a Letter of Credit in the amount of less than $0.1 million pursuant to the terms of the lease.
On December 23, 2022, we entered into a sales agreement with Cantor Fitzgerald & Co. and B. Riley Securities, Inc., or the Sales Agents, providing for the offering, issuance and sale by us of up to $40 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).
Riley Securities, Inc., or the Sales Agents, providing for the offering, issuance and sale by us of up to $40 million of our common stock from time to time in “at-the-market” offerings (the “ATM”). For the period ended December 31, 2023, we sold 2,859,074 shares of its common stock pursuant to the ATM for gross proceeds of approximately $5.3 million.
Other Income (Expense), Net Other income, net was less than $0.1 million for the year ended December 31, 2022, compared to other expense, net of less than $0.1 million for the year ended December 31, 2021. Overall, management believes that the change in other expense was not significant in either period.
Other Income (Expense), Net Other income, net was $0.2 million for the year ended December 31, 2023, compared to other expense, net of less than $0.1 million for the year ended December 31, 2022. The change in other income (expense), net was driven primarily by interest earned on money market funds.
As a result, we may face difficulties raising capital through future sales of our common stock or such sales may be on unfavorable terms. 107 Table of Contents Components of Our Results of Operations Operating Expenses Research and Development Expenses 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.
Components of Our Results of Operations Operating Expenses Research and Development Expenses 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.
This is partially offset by proceeds received from the exercise of common stock options in the amount of $1.6 million, as well as proceeds from issuance of common stock in our follow-on public offering in the amount of $5.3 million during the year ended December 31, 2022. 114 Table of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ 1 to 3 ​ 3 to 5 ​ More than 5 ​ ​ ​ ​ 1 Year Years Years years Total Operating lease obligations: ​ $ 209 ​ $ 443 ​ $ 242 ​ $ 126 ​ $ 1,020 Total: ​ $ 209 ​ $ 443 ​ $ 242 ​ $ 126 ​ $ 1,020 ​ In October 2022, we entered into an insurance premium financing arrangement with a lender.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ 1 to 3 ​ 3 to 5 ​ More than 5 ​ ​ ​ ​ 1 Year Years Years years Total Operating lease obligations: ​ $ 221 ​ $ 377 ​ $ 175 ​ $ 37 ​ $ 810 Total: ​ $ 221 ​ $ 377 ​ $ 175 ​ $ 37 ​ $ 810 ​ In October 2022, we entered into an insurance premium financing arrangement with a lender.
There was no gain or loss on debt extinguishment for the year ended December 31, 2022. ​ Interest expense Interest expense for the year ended December 31, 2022 consisted of interest expense related to the insurance premium financing arrangement with a lender. Interest expense for the year ended December 31, 2021 primarily consisted of interest expense from our convertible notes.
Interest Expense Interest expense for the years ended December 31, 2023 and 2022 consisted of interest expense related to the insurance premium financing arrangement with a lender.
As of December 31, 2022, the total unrecognized compensation expense related to unvested time-based vesting awards was $6.5 million, which is expected to be recognized over weighted-average remaining vesting period of approximately 2.0 years. 116 Table of Contents Recent Accounting Pronouncements For a description of recent accounting pronouncements, see Note 2 of the notes to our audited consolidated financial statements for the year ended December 31, 2022 included elsewhere in this Annual Report.
As of December 31, 2023, the total unrecognized compensation expense related to unvested time-based vesting awards was $4.3 million, which is expected to be recognized over weighted-average remaining vesting period of approximately 1.6 years.
The change of $0.9 million in interest expense was the result of the convertible notes outstanding balance during the year ended December 31, 2021, which were subsequently converted into shares of our Series B-1 convertible preferred stock in May 2021. 111 Table of Contents Liquidity and Capital Resources Sources of Liquidity To date, we have funded our operations primarily with proceeds from grants awarded by the NIA, and proceeds from the sales of our convertible promissory notes, convertible preferred stock, SAFE, stock option exercises, our IPO and our follow-on public offering.
Liquidity and Capital Resources Sources of Liquidity To date, we have funded our operations primarily with proceeds from grants awarded by the NIA, and proceeds from the sales of our convertible promissory notes, convertible preferred stock, SAFE, stock option exercises, follow-on equity offerings, sales under our ATM and equity line financing, and our IPO.
In connection with the IPO, we received net proceeds of approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us, which includes net proceeds of approximately $6.3 million from the exercise of the over-allotment option.
In connection with the follow-on public offering, we received net proceeds of approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses. On December 23, 2022, we entered into a sales agreement with Cantor Fitzgerald & Co. and B.
The decrease in cash provided by financing activities relates primarily to the IPO of our stock whereby we received net proceeds of $44.2 million and the issuance of SAFEs whereby we received $8.9 million during the year ended December 31, 2021.
The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock under the ATM program and sale of common stock pursuant to the Lincoln Park Purchase Agreement during the year ended December 31, 2023 as compared to the proceeds from the issuance of common stock in our November 2022 follow-on public offering in the amount of $5.3 million during the year ended December 31, 2022.
Removed
We have also initiated our clinical trial protocols to enable remote visits to mitigate any potential impacts as a result of the COVID-19 pandemic.
Added
Currently available therapies for these diseases are limited, with few Alzheimer’s disease (“AD”) treatments, two approved treatments for geographic atrophy (GA) secondary to dry age-related macular degeneration (“dAMD”) and no approved treatments for dementia with Lewy bodies.
Removed
Many of these adjustments are new and untested, may not be effective, may affect the integrity of data collected, and may have unforeseen effects on the progress and completion of our clinical trials and the findings from such clinical trials.
Added
In the SNAP study, results of which were published in May 2023 in the journal, Translational Neurodegeneration and showed that a single oral dose of CT1812 rapidly displaces Aβ oligomers from synapses of individuals with AD.
Removed
The spread of COVID-19, including the spread of new strains and variants of COVID-19, and actions taken to reduce such spread may also materially affect us economically.
Added
In the SEQUEL study, top-line results showed that four weeks of treatment with CT1812 improved synapse activity and connectivity of brain regions as measured via quantitative electroencephalogram (“qEEG”). Together, these findings provide evidence that the displacement of oligomers from synapses via CT1812 engagement with the S2R results in improved synapse function.
Removed
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including employee salaries, related benefits, and stock-based compensation expense for our employees in the executive, finance and accounting, and other administrative functions.
Added
In blinded and unblinded clinical trials, several patients experienced asymptomatic, reversible elevations in serum liver chemistries prompting harmonization of monitoring, increasing frequency where appropriate, across our clinical trials.
Removed
Following the completion of our IPO on October 13, 2021, we have incurred, and will continue to incur, substantially increased expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services.
Added
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”).
Removed
Change in fair value of derivative liability Change in fair value of our derivative liability consists of changes in the fair value of certain conversion and redemption features associated with our convertible notes that are required to be bifurcated and accounted for as free-standing derivative financial instruments.
Added
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 million of shares of common stock at our sole discretion, over a 36-month period commencing on March 10, 2023.
Removed
The derivative liability expired unexercised upon the conversion of the convertible notes into Series B-1 convertible preferred stock in May 2021.
Added
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.
Removed
Change in fair value of SAFE Change in fair value of our SAFE consists of fair value adjustments to these instruments based primarily on the changes in the probability of occurrence and estimated timing of future event inputs in the valuation model.
Added
During the year end December 31, 2023, we 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 December 31, 2023, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.
Removed
Upon the occurrence of our IPO on October 7, 2021, the SAFE was converted into 931,485 shares of our common stock. Gain on Debt Extinguishment Gain on debt extinguishment for the year ended December 31, 2021 was the result of the forgiveness of the Paycheck Protection Program loan on January 21, 2021.
Added
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. In connection with the follow-on public offering, we received net proceeds of approximately $10.4 million, after deducting underwriting discounts and commissions and other offering related expenses.
Removed
Change in Fair Value of the Derivative Liability Changes in the fair value derivative liability resulted in a gain of $2.2 million for the year ended December 31, 2021.
Added
As a result, we may face difficulties raising capital through future sales of our common stock or such sales may be on unfavorable terms.
Removed
There was no gain or loss for the year ended December 31, 2022 as the derecognition of the derivative liability occurred in May 2021 upon the conversion of convertible notes into shares of Series B-1 convertible preferred stock.
Added
As of December 31, 2023, we sold 2,859,074 shares of common stock under the ATM for gross proceeds of approximately $5.3 million. As of December 31, 2023, there was $34.7 million of common stock remaining available for sale under the ATM.
Removed
Change in Fair Value of the SAFE Changes in the fair value of the SAFE resulted in a loss of $2.2 million for the year ended December 31, 2021.
Added
During the year ended December 31, 2023, we 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 December 31, 2023, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.
Removed
There was no gain or loss for the year ended December 31, 2022 as the derecognition of the SAFE liability occurred when the SAFE converted into shares of our common stock upon the closing of our IPO.
Added
On March 14, 2024, we closed our follow-on public offering, selling 6,571,428 shares of our common stock at a public offering price of $1.75 per share.
Removed
Gain on Debt Extinguishment Gain on debt extinguishment was $0.4 million for the year ended December 31, 2021 as a result of the forgiveness of the Paycheck Protection Program loan on January 21, 2021. There was no gain or loss on debt extinguishment for the year ended December 31, 2022.
Added
The net proceeds were approximately $10.4 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us. ​ As of December 31, 2023, we had $29.9 million in cash and cash equivalents and have not generated positive cash flows from operations.

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