Alpha Cognition 2Q25 Earnings Recap
Slow first quarter, as expected, with positive developments in motion
Alpha Cognition ($ACOG) reported its 2Q25 results yesterday, the first full quarter since the commercial launch of Zunveyl (launched in the third week of March). The company reported revenue of $1.6 million for the quarter, and $1.9 million including the first few weeks of the launch in March. Operating expenses were $6.9 million as the company brought its commercial team online.
While $1.6 million is completely within the expected range for the first commercial quarter for a brand new symptomatic Alzheimer’s drug, the stock traded down 20% following the pre-market press release. We believe this was specifically due to the expectations that were set on the 1Q25 call, primarily by CCO/COO Lauren D’Angelo’s comment that the company had done $1 million of sales in the month of April.
Investors taking Lauren’s comment at face value would obviously expect to see at least $3 million of revenue for the quarter (likely more to account for ramping adoption), so the $1.6 million number was a bit surprising to some (including myself).
I reached out to management after the 1Q25 call regarding this matter, as the $1 million of net sales in April did not seem to align with another comment made on the call that 500 bottles had been ordered through the first week of May—500 bottles times $749/bottle suggests only $375k of revenue.
The response I received was related to the fact that the $1 million figure included both sales and initial stocking.
While this may be the case, Lauren D’Angelo’s comment about $1 million of net sales seems imprecise at best, and it makes sense that the market was expecting a higher number for Zunveyl’s inaugural quarter.
Earnings Call Recap
Moving on to the earnings call held after the close, the key details were:
Zunveyl is now subject to prior authorization in many cases.
While management said that they weren’t seeing much prior authorization (PA) requirements from health plans on the Q1 call, the initial demand for Zunveyl has resulted in PAs in the majority of cases. This was expected, and the company says that most PAs are just making sure that patients have tried a generic drug. While these prescriptions are still getting approved, it is taking up to three weeks in some cases.
The company signed a contract with one of the nation’s largest health plans/PBMs, and plans to sign more.
This gives them access to 17 million Medicare Part D lives (of ~55 million lives). While it was not clear on the call, this should lessen the prescription hurdles (e.g. PAs) for these patients.
Lauren D’Angelo also said that they are in “deep discussions” with a couple other plans and expect to sign another major health plan by the end of the year, and perhaps others. The timely signing of these contracts is a bit ahead of schedule and should support Zunveyl’s adoption curve.
Confusion on a question surrounding current revenue run rate.
In a confusing interaction, H.C. Wainwright analyst Raghuram Selvaraju asked if McFadden would be willing to share Zunveyl’s current revenue run rate. McFadden responded by saying “We anticipate a range of 575 to 625, depending on the execution of that contract”.
We have tried to understand what McFadden meant by these comments or whether it was a misunderstanding of Selvaraju’s question, and the most likely interpretation appears to be the latter, especially because McFadden refers to the same “575 to 625” range two minutes later when talking about the net price per bottle in response to a question about gross-to-net.
This interpretation also seems to make the most sense in the context of CEO Michael McFadden’s continued reluctance to give revenue guidance. We will follow up with CEO Michael McFadden on this question.
Lowered annual operating expense guidance to $34-$38 million.
Lowered from the previous guidance of $38-$42 million. This should make it easier for the company to make it to breakeven with the cash that it currently has on hand ($39 million at the end of Q2), though that will depend heavily on the revenue ramp over the next few quarters.
65% of prescribing long-term care facilities have written repeat orders.
The company reports having reached over 1,900 facilities and 1,500 unique prescribers, with 330 facilities writing prescription in the quarter, and 65% of those facilities writing multiple prescriptions. Lauren D’Angelo also reported that 28% of those facilities ordered for the first time in June.
Conclusion
While the developments with payors and feedback from physicians appear to be encouraging, management is still not giving much in the way of concrete guidance, so we will have to wait for Q3 to see how things are progressing.
While the comments made on the Q1 call seemed to suggest that Q2 revenue should come in at $3+ million, the medium-term outlook remains unchanged. Zunveyl’s superior safety (and perhaps efficacy) profile compared to existing therapies (chiefly donepezil) should continue to penetrate the large and significantly dissatisfied symptomatic Alzheimer’s treatment landscape, especially as prescribers get more comfortable with the new medicine.