Breaking Down Cognition Therapeutics, Inc. (CGTX) Financial Health: Key Insights for Investors

Are you keeping a close watch on Cognition Therapeutics Inc. (CGTX) and wondering about its financial stability? For the year 2024, the company reported a net loss of $34 million, or $0.86 per share, mirroring the previous year's results. While this might raise concerns, the company holds approximately $25 million in cash and cash equivalents as of December 31, 2024, along with $50 million in remaining obligated grant funds from the NIA. The company's overall financial health is rated as 'WEAK' with a score of 1.61, but analysts are optimistic, with recent upward revisions in earnings estimates. Want to delve deeper into CGTX's financial performance and strategic moves? Keep reading to uncover key insights!

Cognition Therapeutics, Inc. (CGTX) Revenue Analysis

As a clinical-stage biopharmaceutical company, Cognition Therapeutics, Inc. currently does not generate revenue from product sales or services. Its financial health is primarily assessed through its ability to secure funding, manage expenses, and advance its clinical programs.

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Since Cognition Therapeutics, Inc. is focused on clinical development, understanding their financial status involves examining key aspects such as cash reserves, expenditures on research and development, and potential future revenue streams tied to successful drug development and regulatory approvals.

Cognition Therapeutics, Inc. (CGTX) Profitability Metrics

Analyzing Cognition Therapeutics, Inc. (CGTX)'s profitability involves examining several key financial metrics. Given the company's status as a clinical-stage biopharmaceutical firm, traditional profitability measures require careful interpretation. Here’s a detailed breakdown:

Gross Profit: As a clinical-stage company, Cognition Therapeutics, Inc. (CGTX) may not have substantial revenue from product sales. Therefore, gross profit might be minimal or non-existent, primarily reflecting revenue from collaborations or licensing agreements, if any. The focus is more on managing research and development costs effectively.

Operating Profit: Operating profit is crucial as it reflects the efficiency of core operations. For Cognition Therapeutics, Inc. (CGTX), this involves deducting operating expenses (R&D, SG&A) from any gross profit. A negative operating profit is typical for such companies due to high R&D expenditures. Monitoring the trend of operating losses and how they are funded is essential. In 2023, Cognition Therapeutics reported a net loss of $37.1 million, compared to a net loss of $27.4 million in 2022. This increase was primarily due to increased research and development expenses.

Net Profit Margins: Net profit margin, calculated as net income divided by total revenue, is another key indicator. For Cognition Therapeutics, Inc. (CGTX), this margin is likely negative, reflecting overall losses. However, the trend and magnitude of these losses provide insights into the company’s financial sustainability. The company’s net loss per share was $1.19 for 2023, compared to $1.28 for 2022.

Trends in Profitability Over Time: Analyzing profitability trends involves assessing how gross, operating, and net profits change over multiple periods. For Cognition Therapeutics, Inc. (CGTX), this means tracking the burn rate (the rate at which the company spends its cash reserves) and evaluating whether the company is making progress in managing expenses relative to its stage of development. Note that as of December 31, 2023, Cognition Therapeutics had cash, cash equivalents, and marketable securities totaling $37.4 million.

Comparison of Profitability Ratios with Industry Averages: Comparing Cognition Therapeutics, Inc. (CGTX)'s financial ratios with those of its peers in the biotechnology industry provides context. Since many biotech firms are in the development stage, negative profitability is common. However, benchmarking against similar companies can reveal whether Cognition Therapeutics, Inc. (CGTX) is performing within expected ranges or if there are areas needing improvement.

Analysis of Operational Efficiency: Operational efficiency can be gleaned from several factors:

• Cost Management: Evaluating how effectively Cognition Therapeutics, Inc. (CGTX) manages its R&D and SG&A expenses is critical. Efficient cost management can extend the company's runway, providing more time to achieve clinical and regulatory milestones.
• Gross Margin Trends: Although potentially minimal, monitoring gross margin trends (if any) can indicate the success of any collaborative agreements or early commercial activities.
• R&D Expenses: Research and development expenses increased to $24.4 million in 2023 from $17.8 million in 2022, primarily due to increased clinical trial activities.
• G&A Expenses: General and administrative expenses also rose to $13.4 million in 2023 from $9.8 million in 2022, driven by higher compensation expenses and professional fees.

Here is a summary of Cognition Therapeutics, Inc. (CGTX)'s financial performance:

For further insights, you can check this link: Breaking Down Cognition Therapeutics, Inc. (CGTX) Financial Health: Key Insights for Investors

Cognition Therapeutics, Inc. (CGTX) Debt vs. Equity Structure

Understanding how Cognition Therapeutics, Inc. (CGTX) manages its debt and equity is crucial for investors. It provides insights into the company's financial strategy and risk profile. Here's a breakdown of CGTX's approach to financing its growth:

As of the fiscal year 2024, Cognition Therapeutics, Inc. (CGTX) showcases the following debt dynamics:

• Long-term and Short-term Debt: Specific figures for long-term and short-term debt are essential to assess the company's obligations. Detailed analysis of the latest financial statements would provide these values, helping investors understand the timeline for debt repayment.
• Debt-to-Equity Ratio: The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. To calculate this ratio for Cognition Therapeutics, Inc. (CGTX), one would divide the company's total liabilities by its shareholder equity. A higher ratio indicates greater reliance on debt financing, which can amplify both risk and potential returns. Without current specific data, a comparative analysis against industry standards cannot be accurately provided.
• Recent Debt Activities: Keeping track of any recent debt issuances, credit rating changes, or refinancing activities provides insight into Cognition Therapeutics, Inc. (CGTX)’s financial maneuvering and creditworthiness. These actions can significantly impact the company's financial stability and investor confidence.
• Balancing Debt and Equity: Cognition Therapeutics, Inc. (CGTX) strategically balances debt financing and equity funding to optimize its capital structure. The decision to lean more towards debt or equity depends on various factors, including prevailing interest rates, market conditions, and the company's growth prospects. Effective management of this balance is vital for sustaining growth while minimizing financial risk.

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Cognition Therapeutics, Inc. (CGTX) Liquidity and Solvency

When evaluating the financial health of a company like Cognition Therapeutics, Inc. (CGTX), assessing its liquidity and solvency is crucial. These metrics provide insights into the company's ability to meet its short-term and long-term obligations. Here's an overview of key liquidity measures and cash flow trends for CGTX.

Assessing Cognition Therapeutics, Inc.'s Liquidity:

• Current and Quick Ratios:

Cognition Therapeutics Inc. has a current ratio of 2.65 and a quick ratio of 2.49 as of December 31, 2024. A current ratio above 1 indicates that a company's assets can cover its short-term liabilities. The quick ratio, which excludes inventories, provides a more conservative view of liquidity. These ratios suggest a reasonably strong short-term liquidity position. In February 2025, the current ratio was reported at 2.11, also indicating strong short-term liquidity.

• Analysis of Working Capital Trends:

Working capital, which is the difference between a company's current assets and current liabilities, is a vital measure of its short-term financial health. Cognition Therapeutics Inc.'s working capital has fluctuated over the years:

The trend indicates a decrease in working capital over the past four years, which may warrant further investigation into the management of current assets and liabilities.

• Cash Flow Statements Overview:

An overview of Cognition Therapeutics Inc.'s cash flow statements reveals the trends in operating, investing, and financing activities.

• Operating Cash Flow:

As a clinical-stage biopharmaceutical company, Cognition Therapeutics Inc. is expected to have negative cash flow from operations, as it is investing heavily in research and development. For the year ended December 31, 2024, the net loss was $33.971 million, increasing from $25.788 million the previous year. The loss from operations increased to $53.966 million, driven by higher research and development expenses related to clinical programs and personnel costs.

• Investing Cash Flow:

Investing activities typically involve the purchase and sale of long-term assets. Detailed data for Cognition Therapeutics Inc. shows minimal cash flow from investing activities, with values close to zero, indicating limited investment in assets.

• Financing Cash Flow:

Financing activities include transactions related to debt, equity, and dividends. Cognition Therapeutics Inc. has been actively raising capital through equity offerings. In March 2024, the company closed a public offering of 6,571,428 shares of its common stock at $1.75 per share, resulting in gross proceeds of approximately $11.5 million. Additionally, the company has an 'at-the-market' (ATM) offering program, through which it sold 19,913,189 shares for gross proceeds of approximately $12.8 million, with $21.9 million remaining available for future issuances.

• Potential Liquidity Concerns and Strengths:

Cognition Therapeutics Inc. faces substantial financial risks, primarily due to being a clinical-stage company without products approved for commercial sale, leading to significant net losses. As of December 31, 2024, the accumulated deficit was $175.2 million, and the company anticipates significant expenses and operating losses for the foreseeable future. There is substantial doubt about the company's ability to continue as a going concern, with existing cash and cash equivalents expected to fund operations only into the fourth quarter of 2025.

However, the company is proactively managing its liquidity through several financing activities. These include public offerings and an equity line financing agreement, aimed at maintaining liquidity and funding operations. As of December 31, 2024, cash and cash equivalents were approximately $25.0 million, with total obligated grant funds remaining from the NIA at $50.0 million.

For further insights into Cognition Therapeutics, Inc.'s mission, vision, and core values, you can explore: Mission Statement, Vision, & Core Values of Cognition Therapeutics, Inc. (CGTX).

Cognition Therapeutics, Inc. (CGTX) Valuation Analysis

Assessing whether a company is overvalued or undervalued requires a multifaceted approach, incorporating various financial ratios and market data. For Cognition Therapeutics, Inc. (CGTX), several key metrics provide insights into its current valuation. Let's delve into these aspects to understand the company's financial health.

Is Cognition Therapeutics, Inc. (CGTX) Overvalued or Undervalued?

To determine whether Cognition Therapeutics, Inc. (CGTX) is overvalued or undervalued, several financial metrics and market analyses are considered:

• Price-to-earnings (P/E) Ratio: As of March 24, 2025, Cognition Therapeutics's P/E ratio is -0.57. This indicates a decrease of -47.71% compared to its 12-month average P/E ratio of -1.09. A negative P/E ratio suggests the company has negative earnings, making it difficult to interpret in isolation.
• Price-to-book (P/B) Ratio: The price-to-book ratio for CGTX is around 1.17 to 1.3. Compared to its peers and the US Pharmaceuticals industry average (2x and 1.4x respectively), CGTX might be considered good value based on its Price-To-Book Ratio.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The Enterprise Value/EBITDA is -0.44. This negative value suggests that the company's enterprise value is less than its EBITDA, which can occur when a company has a significant amount of cash or is experiencing financial distress.

Analyzing these ratios together offers a more comprehensive view of Cognition Therapeutics' valuation. A Mission Statement, Vision, & Core Values of Cognition Therapeutics, Inc. (CGTX). can also give more insights into the long term goals of the company.

Stock Price Trends

Examining the stock price trends over the last 12 months provides context on market sentiment and investor confidence:

• The stock's 52-week high is $2.95, while the 52-week low is $0.31.
• As of April 18, 2025, the share price of Cognition Therapeutics is approximately $0.37.
• The stock has experienced a 1-year change of -80.36%.

This significant decrease indicates substantial challenges or changes in investor expectations over the past year.

Dividend Yield and Payout Ratios

For investors seeking income, dividend yield and payout ratios are essential. However, in the case of Cognition Therapeutics:

• The dividend yield is 0.00%.
• The payout ratio is also 0.00%.

This indicates that Cognition Therapeutics does not currently offer dividends, which is common for growth-oriented biotech companies that reinvest earnings into research and development.

Analyst Consensus

Analyst ratings provide a consolidated view on the stock's potential. For Cognition Therapeutics:

• The consensus rating is 'Strong Buy'.
• The average price target is $7.13 to $7.93, which is significantly higher than the current price, suggesting substantial upside potential.
• However, analysts are not within a statistically confident range of agreement.

The analyst community's general optimism should be weighed against the inherent risks and volatility associated with clinical-stage biopharmaceutical companies.

Additional Financial Insights

Here's a table summarizing key financial data about Cognition Therapeutics, Inc. (CGTX):

These figures highlight that Cognition Therapeutics is currently not profitable and is investing heavily in its operations, typical for a company in its stage of development.

Cognition Therapeutics is advancing its lead drug candidate, zervimesine, into late-stage clinical trials for Alzheimer's disease and dementia with Lewy bodies after promising Phase 2 results. The company plans to meet with the FDA in early Q2 2025 to discuss Phase 3 protocols, aiming to solidify its position in neurodegenerative therapeutics.

Peers of Cognition Therapeutics

A list of some peers of Cognition Therapeutics is given below:

• Reviva Pharmaceuticals Holdings, Inc.
• Eyenovia, Inc.
• TransCode Therapeutics, Inc.
• Kodiak Sciences Inc.
• TFF Pharmaceuticals, Inc.
• TScan Therapeutics, Inc.
• Cue Biopharma, Inc.
• Dermata Therapeutics, Inc.
• Gain Therapeutics, Inc.
• aTyr Pharma, Inc.
• IN8bio, Inc.
• Lantern Pharma Inc.
• Cullinan Oncology, Inc.
• Bolt Biotherapeutics, Inc.
• Day One Biopharmaceuticals, Inc.
• Lyra Therapeutics, Inc.
• Autolus Therapeutics plc.

Conclusion

In conclusion, assessing whether Cognition Therapeutics is overvalued or undervalued requires a comprehensive analysis of its P/E ratio, P/B ratio, EV/EBITDA, stock price trends, and analyst consensus. The company's financial metrics suggest it is not currently profitable, which is not uncommon for clinical-stage biopharmaceutical companies. The analyst consensus of 'Strong Buy' and a high price target indicate potential upside, but investors should consider the risks inherent in the biotechnology industry.

Cognition Therapeutics, Inc. (CGTX) Risk Factors

Investing in Cognition Therapeutics, Inc. (CGTX) involves navigating a landscape of potential risks that could significantly impact the company’s financial health. These risks span from internal operational challenges to external market forces and regulatory hurdles.

Here's an overview of key risks:

• Industry Competition: The biotechnology sector is intensely competitive. Cognition Therapeutics faces competition from other companies, including larger pharmaceutical firms, that are also developing treatments for Alzheimer's disease and other neurodegenerative disorders. These competitors may have greater financial, technical, and marketing resources.
• Regulatory Changes: The development and commercialization of pharmaceutical products are subject to extensive regulation by governmental authorities, including the FDA in the United States and similar bodies in other countries. Changes in regulatory requirements or delays in obtaining regulatory approvals can significantly impact the company's operations and financial prospects.
• Market Conditions: Unfavorable market conditions, such as economic downturns or changes in investor sentiment towards the biotechnology industry, could negatively affect Cognition Therapeutics' ability to raise capital and the value of its stock.

Operational, financial, and strategic risks are detailed in Cognition Therapeutics' filings with the Securities and Exchange Commission (SEC). These filings, including annual reports on Form 10-K and quarterly reports on Form 10-Q, provide insights into the specific risks identified by the company's management.

Examples of such risks include:

• Clinical Trial Risks: The success of Cognition Therapeutics depends heavily on the outcome of its clinical trials. These trials are inherently risky and may not produce favorable results. Factors such as patient enrollment rates, data integrity, and unforeseen adverse events can impact the success and timelines of clinical trials.
• Financial Risks: As a clinical-stage biotechnology company, Cognition Therapeutics requires significant capital to fund its research and development activities. Financial risks include the ability to raise sufficient capital on acceptable terms, manage expenses effectively, and achieve profitability.
• Strategic Risks: Strategic risks involve decisions related to the company's business model, partnerships, and overall direction. These risks include the ability to successfully execute the company's strategy, adapt to changing market conditions, and maintain key relationships with partners and collaborators.

Mitigation strategies often involve diversifying research and development efforts, securing intellectual property protection, maintaining strong relationships with regulatory agencies, and implementing robust risk management practices. However, the effectiveness of these strategies cannot be guaranteed, and the company's financial health remains subject to these risks.

Investors can review the company's mission, vision, and core values here: Mission Statement, Vision, & Core Values of Cognition Therapeutics, Inc. (CGTX).

Cognition Therapeutics, Inc. (CGTX) Growth Opportunities

Cognition Therapeutics, Inc. (CGTX) is focused on developing innovative treatments for age-related degenerative diseases, particularly Alzheimer's disease. The company's future growth prospects hinge on several key drivers, including the successful development and commercialization of its lead drug candidate, Elayta, and other pipeline assets.

Key growth drivers for Cognition Therapeutics, Inc. (CGTX) include:

• Product Innovation: Cognition Therapeutics, Inc. (CGTX)’s primary focus is on Elayta, a small molecule drug candidate targeting the sigma-2 receptor complex. Elayta is designed to address the underlying pathology of Alzheimer's disease by displacing toxic amyloid-beta oligomers from synapses. Positive clinical trial results and regulatory approvals for Elayta will significantly drive revenue growth.
• Market Expansion: The Alzheimer's disease market is vast and growing, presenting a substantial opportunity for Cognition Therapeutics, Inc. (CGTX). Successful penetration into key geographic markets and expansion into other age-related degenerative diseases could further boost growth.
• Strategic Partnerships: Collaborations with pharmaceutical companies, research institutions, or other strategic partners can provide Cognition Therapeutics, Inc. (CGTX) with additional resources, expertise, and funding to accelerate its development programs and expand its market reach.

Future revenue growth projections and earnings estimates for Cognition Therapeutics, Inc. (CGTX) are highly dependent on the clinical and regulatory progress of Elayta and its other pipeline assets. As a clinical-stage company, Cognition Therapeutics, Inc. (CGTX) currently does not generate revenue from product sales. Revenue is expected to commence upon successful commercialization of its drug candidates.

Strategic initiatives that may drive future growth for Cognition Therapeutics, Inc. (CGTX) include:

• Advancing Clinical Trials: Successfully completing ongoing and planned clinical trials for Elayta and other pipeline assets is critical for demonstrating efficacy and safety, which are prerequisites for regulatory approvals.
• Securing Regulatory Approvals: Obtaining regulatory approvals from authorities such as the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) is essential for commercializing Cognition Therapeutics, Inc. (CGTX)’s drug candidates.
• Building Commercial Infrastructure: Establishing a commercial infrastructure, including sales, marketing, and distribution capabilities, or partnering with established pharmaceutical companies, will be necessary to effectively launch and market approved products.

Cognition Therapeutics, Inc. (CGTX)’s competitive advantages that position the company for growth include:

• Novel Therapeutic Approach: Cognition Therapeutics, Inc. (CGTX)’s focus on targeting the sigma-2 receptor complex to address the underlying pathology of Alzheimer's disease represents a novel approach compared to other treatments that primarily address symptoms.
• Strong Intellectual Property: Cognition Therapeutics, Inc. (CGTX) has a robust intellectual property portfolio protecting its drug candidates and technologies, providing a competitive edge in the market.
• Experienced Management Team: Cognition Therapeutics, Inc. (CGTX)’s management team has extensive experience in drug development, clinical trials, and commercialization, which enhances the company's ability to execute its strategy and achieve its goals.

For more detailed insights into Cognition Therapeutics, Inc. (CGTX)'s financial health, you can refer to: Breaking Down Cognition Therapeutics, Inc. (CGTX) Financial Health: Key Insights for Investors