Cognition (CGTX) Q2 Grant Income Jumps

Key Points

• GAAP EPS was $(0.11) for Q2 2025, missing estimates by $(0.005) per share.

• GAAP grant income, reported as revenue, reached $7.1 million for Q2 2025, far ahead of analysts' expectation of $0.

• GAAP cash holdings were $11.6 million as of Q2 2025, with operations funded primarily by continued grant support.

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Cognition Therapeutics (NASDAQ:CGTX), a clinical-stage biotechnology firm focused on developing therapies for neurodegenerative diseases, released its earnings for Q2 2025 on August 7, 2025. The company reported a GAAP net loss per share of $(0.11) for Q2 2025, missing consensus estimates by $(0.005)

The company reported a net loss per share of $(0.11) for the quarter ended June 30, 2025, compared to $(0.18) in the prior year period.

GAAP grant income stood at $7.1 million for Q2 2025, outperforming analyst expectations of no recognized GAAP revenue. Total cash, cash equivalents, and restricted cash equivalents declined to $11.6 million as of Q2 2025. The quarter reflected modest financial progress, operational discipline in cutting administrative expenses, and notable clinical milestones despite persistent operating losses and continued reliance on grant funding.

Source: Analyst estimates for the quarter provided by FactSet.

About the Business and Strategic Focus

Cognition Therapeutics develops small molecule drug candidates targeting neurodegenerative diseases such as Alzheimer's disease, dementia with Lewy bodies, and dry age-related macular degeneration. Its primary asset is zervimesine, an oral therapy designed to protect brain cells from toxic protein buildup associated with cognitive decline.

The company's future depends on the clinical progress of zervimesine. It is pursuing regulatory approvals in several neurological conditions, supported by extensive grant funding and a patent portfolio extending into at least 2035. Cognition's business model currently hinges on non-dilutive funding through grants from sources like the National Institute on Aging (NIA) and National Institutes of Health (NIH), allowing it to extend its research runway while preserving shareholder equity.

Second Quarter Highlights: Clinical Progress and Financial Discipline

The most notable development during the quarter was the continued advancement of zervimesine. In Alzheimer's disease, Cognition reached over 50% patient enrollment in its ongoing Phase 2 START trial as of Q2 2025, supported by an approximately $81 million grant from the National Institute on Aging (NIA). It engaged with the Food and Drug Administration (FDA) in an End of Phase 2 meeting to review results from the earlier SHINE study and expects pivotal regulatory feedback in August, marking a potentially transformative milestone.

In dementia with Lewy bodies (DLB), Cognition initiated an expanded access program in Q2 2025. The company onboarded three clinical sites and applied for breakthrough therapy designation with the FDA. The Phase 2 SHIMMER study of zervimesine in DLB, whose data was presented at a major international conference, showed promising results and further demonstrated progress in this therapeutic area.

For dry age-related macular degeneration (dry AMD), a disease causing vision loss in older adults, Cognition announced new Phase 2 data showing a 28.6% reduction in growth of geographic atrophy lesions after 18 months compared to placebo. This outcome indicates potential for a differentiated, orally-administered treatment where options are limited.

The company's discipline in expense management was visible in its operating cost pattern. GAAP general and administrative expenses fell 19.4% in Q2 2025 from the prior year period, mainly due to reduced stock-based compensation. GAAP research and development spending remained flat in Q2 2025 amid ongoing trial activity.

Cash Position, Funding, and Milestones Ahead

GAAP cash, cash equivalents, and restricted cash equivalents dropped by more than half from $25.0 million as of December 31, 2024, to $11.6 million as of June 30, 2025. The decrease reflects continued operating losses, partly cushioned by GAAP grant income recognized as revenue in Q2 2025. At the end of June 2025, Cognition reported $41.9 million in remaining obligated grant funds not yet received. Management indicated it expects current cash and committed grants to fund operations and capital needs into the second quarter of 2026, assuming grants are drawn as planned.

No dividends were declared. The reliance on grant funding remains a central part of its business strategy, as operational expenses continue to outpace traditional income.

Looking Forward: Guidance and Investor Focus Points

Cognition offered no explicit financial guidance for future revenue, earnings, or cash flow beyond management’s statement on runway sufficiency through the second quarter of 2026. The absence of detailed forecasts means investors and analysts will closely watch regulatory updates, trial readouts, and any new sources of non-dilutive funding.

Areas to monitor in coming quarters include the anticipated FDA response to pivotal trial planning for Alzheimer’s disease, updates on the DLB breakthrough therapy designation, and enrollment progress in the ongoing START study. The company’s ability to maintain non-dilutive funding, progress towards commercialization, and manage its declining cash position will remain critical focal points until commercial revenue is established.

CGTX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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