Alpha Cognition (ACOG) Q4 2025 Earnings Transcript

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DATE

Thursday, March 26, 2026 at 12 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Michael McFadden
• Chief Operating Officer — Lauren D’Angelo
• Chief Financial Officer — Henry Du

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TAKEAWAYS

• Total Revenue -- $2.8 million, with $2.5 million from ZUNVEYL product sales and $259,000 in licensing revenue from the CMS Pharma collaboration.
• Full-Year Revenue -- $10.2 million, including $6.8 million in ZUNVEYL net product sales.
• ZUNVEYL Demand Acceleration -- 4,941 bottles dispensed, marking 62% quarter-over-quarter growth; December reached a high of 1,859 bottles dispensed.
• Prescribing Expansion -- 50% increase in prescribing physicians and 69% rise in cumulative homes with prescriptions, compared sequentially to Q3.
• Unique Facility Penetration -- Nearly 4,000 unique long-term care facilities reached since launch, including 1,986 homes engaged and 729 homes placing orders during the quarter.
• Repeat Orders -- 82% of ordering homes in Q4 placed repeat orders; 69% of prescribers were repeat writers.
• PBM Contracts -- Contracts now cover 2 of the 4 largest pharmacy benefit managers (PBMs) for long-term care; a second national PBM contract was signed at year-end.
• Operating Expenses -- $10.7 million in the quarter, up from $2.7 million in the prior-year period, including $258,000 in cost of goods sold and $10.4 million in SG&A and R&D expenses.
• Operating Loss -- $7.9 million for the quarter and $22.7 million for the year, reflecting expanded commercialization costs.
• Net Loss -- $6.9 million, or $0.30 per share, for the quarter; $20.7 million, or $1.17 per share, for the year, inclusive of fair value gains on warrant liabilities.
• Cash Position -- $66 million in unrestricted cash and equivalents at year-end, including $38 million from the recent equity offering and over-allotment exercise.
• Expense Outlook -- 2026 full-year operating expenses expected in the $54 million to $58 million range, driven by new clinical studies and expanded sales and marketing.
• Clinical Program Initiation -- BEACON (long-term care, efficacy and tolerability) initiated in February with top-line data expected in Q4 2026; CONVERGE (polypharmacy and adherence) starts in April with data in Q3 2026; RESOLVE (outpatient) initiates in Q2.
• Sublingual Formulation -- Comparative PK study against tablet and intranasal forms scheduled for Q2, supporting potential clinical entry in early 2027 via 505(b)(2) FDA pathway.
• CMS Pharma Milestone -- Anticipated business development milestone payment upon regulatory approval in China, timing still to be determined.
• Sales Force Expansion -- Field team fully staffed as of March, with new representatives focused on psychiatry customers and long-term care medical directors.
• Peer-to-Peer Education -- National speaker training completed for 48 key opinion leaders, with rollout of educational programs to support prescriber adoption in 2026.
• Nursing Home Success Stories -- Real-world reports indicate improvements in patient behaviors and cognitive function, as shared directly by providers.
• Payer Access Plans -- Broader plan-level coverage and reduced prior authorization friction anticipated to accelerate in Q2 and Q3, with implementation focus on regional accounts of contracted PBMs.

SUMMARY

Alpha Cognition (NASDAQ:ACOG) showcased rapid uptake of its lead asset ZUNVEYL, highlighted by a steep quarter-over-quarter rise in bottles dispensed and significant expansion of repeat provider adoption across long-term care facilities. Management unveiled concrete timelines for key real-world outcome studies—BEACON, CONVERGE, and RESOLVE—with data expected to inform clinical positioning, payer negotiations, and future promotional strategies within 2026. The company emphasized advancement toward payer coverage by securing contracts with two major PBMs and outlined expectations for operational profitability by 2027, underpinned by a robust cash position and ongoing commercial investment.

• Michael McFadden stated, "we maintained a strong financial foundation, which we believe keeps the company well funded with a clear path toward operational profitability in 2027."
• Lauren D’Angelo highlighted accelerating demand and the transition to durable, repeat utilization, noting the Q4 inflection as a critical turning point for penetration and scale.
• Management confirmed initiation of national peer-to-peer education to amplify prescriber confidence and adoption, marking a shift from early sales-force-driven growth to broader clinical influence.
• The operational plan prescribes intensified focus on expanding coverage at the plan level within existing PBM contracts, as well as completion of clinical and regulatory milestones to drive both near-term access and future product pipeline evolution.

INDUSTRY GLOSSARY

• PBM (Pharmacy Benefit Manager): Entities managing prescription drug benefits for health plans, negotiating pricing and access with manufacturers and pharmacies.
• SG&A (Selling, General, and Administrative expenses): Combined operating expenses not directly attributable to product manufacturing, including sales force, marketing, and administrative functions.
• PK Study (Pharmacokinetic Study): Research assessing the absorption, distribution, metabolism, and excretion of a drug in the body.
• 505(b)(2) Pathway: A regulatory approval process allowing companies to rely in part on existing data for a previously approved drug while adding new clinical or preclinical data for a modified or new formulation.

Full Conference Call Transcript

Henry Du: Thank you, Sherry. Good afternoon, and thank you, everyone, for joining us today for Alpha Cognition's Fourth Quarter and Full Year Fiscal 2025 Results Call. Today, after the close of market, the company issued a press release announcing our financial results. Joining me on the call today are Alpha Cognition's Chief Executive Officer, Michael McFadden; and Chief Operating Officer, Lauren D'Angelo. Today's call is being made available via the Investors section of the company's website at www.alphacognition.com. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Alpha Cognition's current perspective on existing trends and information.

Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements. Please review the note regarding forward-looking statements in our earnings press release was disseminated prior to this call for more information on forward-looking statements. Please also note that the company's actual consolidated financial results remain subject to completion of our annual audit procedures. Our actual audited consolidated financial results are expected to be reported in connection with the filing of our annual report which is expected to be filed on or about March 31, 2026.

Our actual consolidated financial results may differ from the results discussed on this call, including as a result of audit adjustments and other developments that may arise between now and when the financials are finalized and filed. The results discussed on this call should not be viewed as a substitute for audited consolidated financial statements and related notes. Accordingly, you should not place undue reliance on the results discussed in this call, which have been prepared by and is a responsibility of our management. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on March 26, 2026.

Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Alpha Cognition declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I'll now turn the call over to Michael.

Michael McFadden: Thank you, Henry, and good afternoon, everyone. Thanks for taking time to join us on today's call. This quarter marks our third full quarter following the commercial launch of ZUNVEYL for the treatment of mild to moderate Alzheimer's disease. As a reminder, ZUNVEYL is the first new oral Alzheimer's treatment approved in more than 15 years, and we believe it has a meaningful opportunity in long-term care where symptom management, tolerability and behavioral management are central to care decisions.

To sum up our results, the commercial launch progress and what we're focused on in 2026, the fourth quarter and fiscal year was characterized by the following: continued sales growth and ongoing demand expansion of ZUNVEYL, further traction in long-term care, including expanding both breadth and depth of prescribing in the $2 billion high-volume long-term care market; progress on payer access, including a second signed contract with a national PBM, which now gets us contracted with 2 out of the top 4 PBMs nationwide. The company raised $40 million in Q3, which enabled us to appropriately expand our commercial reach and payer engagement strategies.

And importantly, we maintained a strong financial foundation, which we believe keeps the company well funded with a clear path toward operational profitability in 2027. In addition to the solid commercial and operational progress the company has made, we announced 3 real-world studies that are or will be initiated in 2026. These studies will provide further evidence to strengthen ZUNVEYL's positioning with payers and provide additional evidence for health care providers who need a therapy that's well tolerated and demonstrates behavioral and cognitive efficacy for their patients.

Lauren, our COO, will come on later and talk a bit more about how our commercial strategy is progressing as well as comment on the payers who obviously pay an integral part of our market penetration strategy. Before I discuss our leading indicators in demand and adoption, let me briefly speak to revenues. For the fourth quarter, we generated total revenues of $2.8 million, including net product revenues of $2.5 million from ZUNVEYL. Launch to date through year-end 2025, Alpha Cognition has generated total revenues of $10.2 million. We view these results as an early important foundation for the company.

At the same time, we recognize that in the initial phase of launch, reported revenue can be influenced by the pace of payer coverage and the national ramp in prescribing behavior, and they may not fully reflect long-term potential of the product. That's why our emphasis remains on the leading indicators that tell us whether ZUNVEYL is building a durable, scalable trajectory in the long-term care setting. Today, what we're most focused on is the underlying demand indicators and durability of adoption, particularly repeat ordering behavior, increased provider confidence and expanding payer access, which we believe are the most reliable predictors of sustained performance and future growth.

In terms of demand indicators in Q4, we dispensed 4,941 bottles of ZUNVEYL, including 1,859 bottles in December alone, our strongest month since launch. And our sales team reached almost 2,000 nursing homes during the quarter, bringing our launch to date to nearly 4,000 unique facilities. We're also encouraged by what we're seeing in terms of depth of prescribing. Prescribing doctors increased 50% versus Q3 and cumulative homes with prescriptions increased 69% in Q4, which is an early indicator of expanding adoption across our commercial footprint. Taking a step back, we believe the adoption curve is doing what we would expect in long term. The providers start cautiously, they treat a small number of patients.

They observe the tolerability and the clinical outcomes for these patients, and then they move toward broader use. Speaking of payers, payer access remains a major friction point with prescription approvals, but it also presents a major opportunity for the company. The team is working with payers to demonstrate compelling data that we believe will improve coverage for ZUNVEYL in the coming quarters. I'm pleased to announce that we executed a second national PBM contract during the quarter in addition to the first PBM contract previously announced. That means we now have agreements with 2 of the 4 major PBMs that are relevant to our long-term care business.

Our execution now shifts to downstream pull-through, ensuring that contracted coverage translates into practical access at the plan level with fewer or no restrictions and a smoother prior authorization process. We believe progress here can be a meaningful accelerant to new starts and sustained growth. Lauren will speak more on this in detail, including timing expectations for early traction and broad implementation. Regarding clinical performance, ZUNVEYL appears to be performing consistently with few adverse events reported. Reported GI adverse events continue to be in the low single digits.

Spontaneous adverse event reporting is still limited to 2 GI adverse events at the end of the quarter, and we would have expected reports in the triple digits at this point during the launch. Regarding medical progress, the company completed the year with 15 abstracts and posters submitted and presented at medical meetings and conferences. We believe these data set a good baseline for acetylcholinesterase education to the market, which has been severely lacking in the last decade. The medical team now turns its attention this year to ZUNVEYL data focused on adverse events, behavioral response and MOA or method of action, all of which we believe differentiates ZUNVEYL from other drugs in the class.

The company announced 3 studies in the last quarter, 2 in long-term care, one called BEACON and the second CONVERGE and one in the outpatient setting, that study is named RESOLVE. We believe the long-term care data will be differentiating with our customers as there are very few studies completed in long-term care. BEACON will provide ZUNVEYL data focused on tolerability, cognitive and behavioral efficacy. We initiated this study in February, and we're very pleased already with the quality and quantity of researchers who are participating in the study. We expect top line data in Q4 of 2026. CONVERGE will initiate in April.

And with the construct of that study, top line data will be reported quickly in Q3 of 2026. And RESOLVE will initiate in Q2 in the outpatient setting. We believe data from RESOLVE will be promotional for the commercial team, and it could be label enabling for the company. Regarding R&D, the company continues to make progress with the sublingual formulation, and we will initiate a comparative PK study versus our tablet and intranasal formulations in Q2 of this year. The company believes the local toxicity study and an equivalent PK data set will be sufficient to advance the product to the clinic.

From a business development perspective, our partner in Asia, CMS Pharma, continues to work through the regulatory process with multiple countries in Asia. We anticipate 2 strategic product approvals in 2026, which could provide incremental long-term growth opportunities for the company. The company still awaits approval of a business development milestone payment, which is contingent on a regulatory approval with the Chinese government. We anticipate this payment will materialize in 2026, although we cannot say when. We believe it's not a question of approval, but of timing. We are working constructively with -- on this process with the Chinese regulatory authorities. The company continues to capitalize on emerging opportunities in the long-term care market.

Chief among these is optimally positioned ZUNVEYL, which has clinically meaningful benefits, both cognitively and behaviorally to treat symptoms associated with Alzheimer's. As noted, the company raised $40 million in Q3, and we immediately put the capital to work. We've increased our field team reach with long-term care medical directors and consultant psychiatry community. We also initiated marketing resources that will better position ZUNVEYL as a treatment of choice for symptom management of Alzheimer's disease. Our sales force increases and the improved marketing efforts will position the company to take advantage of these opportunities in the coming quarter.

With this investment, combined with the early demand indicators we're seeing, we believe the company is well funded to execute our commercial strategy, and we're focused on driving toward operating profitability in 2027. Lauren will discuss more on our commercialization process momentarily, but first, Henry will speak to the financials for the company. I'll now turn it over to Henry.

Henry Du: Thanks, Michael, and good afternoon, everyone. As I review our fourth quarter and full year 2025 results, please refer to today's press release or our Form 8-K filing. I'll begin with a review of our financial results for the fourth quarter and full year 2025, followed by an update on our balance sheet and expectations for 2026. Overall, the year reflected continued commercial progress for ZUNVEYL, supported by growing prescriber adoption and investments in our commercial infrastructure. Starting with revenue. For the fourth quarter, we generated total revenue of $2.8 million, driven primarily by $2.5 million in net product sales from ZUNVEYL, our lead commercial product. We also recognized $259,000 in licensing revenue from our collaboration with CMS Pharma.

For the full year, total revenue was $10.2 million, including $6.8 million in net product sales from ZUNVEYL. These results reflect steady growth in adoption, and we continue to receive positive feedback from prescribers and caregivers regarding the impact ZUNVEYL is having on patients. Turning to operating expenses. Total operating expenses for the fourth quarter were $10.7 million, which included $258,000 in cost of goods sold and cost of revenues and $10.4 million in SG&A and R&D expenses. This compares to $2.7 million in operating expenses in the fourth quarter of 2024.

For the full year of 2025, total operating expenses were $32.9 million, which included $1.9 million in cost of goods sold and cost of revenues compared with $12 million in 2024. The year-over-year increase primarily reflects higher SG&A expenses associated with the expanding commercialization organization, including personnel costs as we continue building our sales team and supporting the launch and commercialization of ZUNVEYL. As a result, we reported an operating loss of $7.9 million for the quarter compared to $2.7 million in the fourth quarter of last year. For the full year, operating loss was $22.7 million compared to $12 million in 2024. Moving on to net loss.

For the fourth quarter of 2025, we reported a net loss of $6.9 million or $0.30 per share compared with a net loss of $5.8 million or $0.52 per share in the same period last year. For the full year 2025, net loss was $20.7 million or $1.17 per share compared with $14.8 million or $2.04 per share in 2024. These results include a gain from change in fair value of warrant liabilities of $441,000 in the fourth quarter and $88,000 for the full year compared to losses of $3.3 million and $3.2 million, respectively, for the same period last year. Turning to the balance sheet. We continue to maintain a strong financial position and remain debt-free.

As of December 31, 2025, we had approximately $66 million in unrestricted cash and cash equivalents, including roughly $38 million in net proceeds raised in October 2025 through our equity offering and over-allotment exercise. Based on our current operating plan, we believe this capital provides operational runway well into 2027, supporting both our commercial initiatives and ongoing development activities. Regarding expectations for 2026, as in prior periods, we are not providing formal revenue guidance. However, we expect continued sequential growth in ZUNVEYL sales through 2026 as physician awareness increases and payer access continues to expand. Finally, from an expense perspective, we currently expect full year 2026 operating expenses to be in the range of $54 million to $58 million.

The increase primarily reflects planned clinical studies intended to generate additional efficacy data for ZUNVEYL as well as continued investment in sales and marketing initiatives to further educate prescribers on the benefits of our drug. With that, I'll turn the call over to Lauren. Lauren?

Lauren D’Angelo: Thanks, Henry. The fourth quarter marked what we believe is an important inflection point in the U.S. launch of ZUNVEYL in long-term care. What we are seeing now is not just continued growth, it is accelerating durable adoption. In Q4, total demand measured as bottles dispensed reached 4,941 bottles, representing 62% quarter-over-quarter growth. Just as importantly, demand strengthened through the quarter with 1,859 bottles dispensed in December, our strongest month since launch. That December performance gives us meaningful momentum as we enter 2026. While Ex-factory shipments can fluctuate as wholesalers manage inventory, what matters most at this stage is underlying patient demand, which continues to build consistently and sequentially. Adoption is compounding.

The most encouraging signal we're seeing is repeat behavior. In Q4, we engaged 1,986 homes, bringing total REITs launched to date to 3,856 unique homes. 729 homes placed orders and 82%, over 600 of those were repeat orders. That level of repeat order activity this early in launch tells us ZUNVEYL is moving beyond initial trial use and becoming embedded in facility treatment protocols. We also added nearly 100 new ordering homes in the final month of the quarter, demonstrating that new adoption continues even as existing homes expand utilization. On the prescriber side, we recorded 3,681 total HCP calls, including nearly 2,000 prescriber calls. Approximately 865 prescribers wrote orders in Q4 and 69%, roughly 600 prescribers were repeat writers.

That repeat rate is critical. What we consistently observe is a predictable adoption curve. Providers start cautiously. They treat 1 or 2 patients they observed behavioral improvement and strong tolerability and then prescribing expands. We are in that expansion phase. Behavioral differentiation is also driving acceleration. Our behavioral positioning continues to resonate strongly. Physicians are increasingly comfortable titrating patients to the 10-milligram therapeutic dose, and that comfort is building faster than we expected. That reflects growing confidence in ZUNVEYL's tolerability profile and limited GI adverse events. In long-term care, behavior drives resource utilization, caregiver burden and facility stability. When providers see meaningful improvement in that domain, adoption accelerates, and we are hearing that consistently across regions.

Payer unlock is the next catalyst for us. While demand is accelerating, payer coverage is still in the early stages of pull-through. As we expand unrestricted coverage and streamline prior authorizations, we expect reduced friction and patient initiation and increased velocity of new starts. Importantly, demand growth today is occurring despite limited unrestricted access. As coverage broadens, we believe it will act as a force multiplier. Importantly, and as shared during our last call, we expected to sign a second national PBM contract by year-end 2025, and I'm pleased to report that we achieved that milestone. We now have 2 of the 4 major PBMs under contract, and we are intensely focused on downstream plan execution.

We expect to begin seeing early traction in Q2 with broader implementation in Q3. Another key catalyst for 2026 is the activation of peer-to-peer education. In January, we completed national speaker training for 48 key opinion leaders across long-term care and psychiatry. These key opinion leaders will now begin leading structured educational programs across the country. Up until this point, adoption has largely been driven by our field team. As peer-to-peer education expands, we expect increased physician pull-through, broader clinical validation and an acceleration in prescriber confidence, particularly among our later adapters. In long-term care, education from trusted peers carry significant weight. We believe this initiative will amplify awareness, reinforce ZUNVEYL's behavioral differentiation and support continued acceleration throughout 2026.

Let me share why we are so excited about 2026. When we take a step back, we see strong sequential demand acceleration, high repeat ordering rates, growing prescriber confidence, expansion of ordering homes, increasing comfort with therapeutic dose titration, expanding payer access, activation of national peer-to-peer education and upcoming real-world data milestones. We are no longer proving product market fit. We are now focused on scaling it. As we move into 2026, our focus is straightforward: expand penetration per home, deepen prescriber relationships, accelerate payer pull-through and execute with discipline. Based on the trajectory exiting Q4, we believe ZUNVEYL is well positioned for continued acceleration. And with that, I'll turn it over to Michael.

Michael McFadden: Thank you, Lauren. The team is focused on executing these quality calls with high-value medical directors and psychiatry consultants. We're meeting with health plans to pull through our PBM contracts, and we're working to manage efficiently the reimbursement process with our customers. Our relationship with CMS Pharma continues to grow. We're working through the regulatory process with our partner to gain approvals for ZUNVEYL in 2 countries this year. This last quarter, our leadership team has met with over 40 prescribers. The clinical outcomes they're seeing with ZUNVEYL are robust. The tolerability they see in patients is very good.

They see improvements in cognition and improvements or complete amelioration of behaviors, and they report that commonly to us during these meetings. This gives us confidence that when we reduce the friction points with payers, our demand will grow. More importantly, we believe the company is well funded to execute, and we are focused on driving toward operational profitability in 2027, while building a durable commercial franchise around ZUNVEYL. We'll now take questions. Operator?

Operator: [Operator Instructions] Our first question is from Ram Selvaraju with H.C. Wainwright.

Raghuram Selvaraju: Congratulations on all this recent progress. I wanted to, first of all, start with some commercial aspects. I was wondering if you could give us some additional color regarding your anticipated timing for conversion of the additional payers that you haven't already converted as well as when you anticipate potentially promoting into the neurologist prescriber base relative to the long-term care facilities and those specialist prescribers?

Lauren D’Angelo: Sure. Thanks, Ram, for the question. First, so timing conversion for the payers. So as we've shared with you all, we're really excited that we signed 2 of the big 4. So that represents a significant percentage of our overall business. And if you look at both of those PBMs, right now in one of the PBMs, we have about 16% open business. So we're still working really, really hard to pull through the rest of the regional plans on that PBM. And then we just signed that second PBM at the end of last year. So we're working through now the downstream accounts. The biggest downstream accounts are really who were targeted.

And the plan -- we're having great conversations with those regional payers. Our thoughts around when we're going to start to see adoption for those regional plans, we expect that we're going to see some acceleration in Q2. So a small amount of those plans will likely pick us up in Q2 with broad implementation in Q3 is where we expect to see significant pickup from the downstream. Now as far as promoting into the neurologist or the specialty space, our plan has always been that as we get closer to breakeven, profitability in 2027, that's when we would look to expand into neurology.

Raghuram Selvaraju: Okay. And then with respect to the clinical development plans, I wanted to drill down specifically on 2 of these initiatives, one of which is obviously a current clinical program for ZUNVEYL.

I was wondering specifically if you could give us some additional color on the key -- what you hope to be the key aspirational takeaways, if I can put it that way, from the CONVERGE study, in particular, as this pertains to polypharmacy because clearly, this study will provide a lot of important information, but we wanted to just kind of get a sense of assuming that you get the information that you expect this study to deliver, how that is going to play into your long-term promotional strategy for ZUNVEYL? And to what extent this study is likely to be a fulcrum with prescribers?

Michael McFadden: That's a great question. So CONVERGE is a data analysis of the long-term care market, and we plan to evaluate polypharmacy in 3 ways. In the long-term care market for the Alzheimer's patient, polypharmacy is very common for patients with sleep disturbance that occurs with the other agents in the class, patients with GI disturbance that is very commonly seen with other agents in the class and to control behaviors, which other agents in the class have a modest or no effect on being able to control.

We anticipate with the advent or utilization of ZUNVEYL that we've seen in these homes that we'll see a reduction in that polypharmacy, but the data will tell that story, and that will be one of the #1 things that the study will look at. It will also look at things like adherence, tolerability dosing and consistency across ZUNVEYL and other agents in the class. So we'll have a plethora of data looking at all of those areas. We think that will be really key for providers and also decision-makers into determining positioning for ZUNVEYL with health plans and determining how they want to use ZUNVEYL in the long-term care marketplace.

Raghuram Selvaraju: Okay. Great. And then just lastly on the preclinical sublingual formulation. Three quick questions here. Firstly, I was wondering if you could comment on any additional precision with which you expect this to enter the clinic in 2026 and what the prerequisite steps might be for that milestone to be reached. Secondly, I was wondering if you could maybe just sketch out for us what you expect the clinical development time line and paradigm to look like for the sublingual formulation. I presume that it would also fall under the 505(b)(2) pathway, but perhaps you could give us some additional color regarding how you expect it to move towards potential market entry.

And of course, if you could give us some sense of timing with which it might reach the market? And also if you have thoughts at this early stage regarding assuming success in clinical development, how this sublingual formulation would play alongside ZUNVEYL, how this might broaden your overall reach into the Alzheimer's community? And also if there are any technical plans envisaged with respect to looking at the feasibility of formulating not only ZUNVEYL sublingually, but also potentially generating combination therapies. So this would essentially involve sublingual delivery of both benzgalantamine and potentially other anti-Alzheimer's medications in the same sublingual formulation.

Michael McFadden: A lot to unpack there. Let me start with the position in the market with the sublingual. Why are we investigating and trying to advance the sublingual. In the long-term care marketplace, it's estimated that up to 20% of patients have dysphagia or aphasia. That's an inability or difficulty in swallowing a tablet or capsule formulation of any medication. Currently, these patients with Alzheimer's who have this difficulty either use a patch or if there's a capsule or a tablet, it's crushed or opened and put into a feeding tube or mixed with apple sauce and it's administered to the patient. As you can imagine, that's very challenging and difficult.

The sublingual, we believe, will displace a very difficult-to-use patch and displace a very challenging administration in apple sauce or in a tube by simply putting this under the tongue, it dissolves within seconds. So it's easy to administer provided that the data allows us to move forward with the compound. Let me talk about the things that we're looking at and the milestones that we need to undertake in conquer to move this to the clinic. First, we are going to initiate a PK comparative study with our sublingual versus our tablet and our intranasal formulation. If that PK data shows parity, we will use that as the basis to enter the clinic with FDA.

Now we'll need to complete a Type C meeting, which would happen in the late summer with FDA. And post a positive Type C meeting, we would be advancing the sublingual formulation to the clinic likely in the very first part of 2027. This will all be dependent upon the data from the agency, but we believe that's all that's needed. We've completed all other data that we believe we need to complete to move the product to the clinic. If we're able to move to the clinic, we would take a modified 505(b)(2) path. Our current thinking is we would complete a 505(b)(2) study.

And then we would follow that with a tolerability study with the sublingual that could be label-enabling for that asset to allow us to utilize that data for both promotion and the label for the sublingual. That is to be determined on how long that study needs to be. That will be part of our Type C meeting conversation with FDA. We also plan to use the sublingual formulation to advance our program for cognitive impairment with mild traumatic brain injury. It's an easy to take formulation that would be administered easily for that patient population. So we have a dual use for that asset and dual programs that we will utilize the asset for.

Raghuram Selvaraju: And one clarification -- sorry, go ahead.

Michael McFadden: Regarding combo therapy, combo therapy will follow both of those programs. Those programs are #1 and #2 on the company's priority for medical development at this time.

Raghuram Selvaraju: Okay. Just one commercial clarification. I assume that if the sublingual formulation reaches the market specifically in order to address dysphasia or aphasia in Alzheimer's patients that you would anticipate being able to leverage it using your existing sales and marketing infrastructure and you would not, at that time, need to bring on additional sales firepower. Is that an accurate assumption?

Michael McFadden: Yes, you're correct that there's 100% synergy with the sublingual and our existing sales infrastructure.

Operator: Our next question is from Dave Storms with Stonegate Capital.

David Storms: I actually kind of wanted to follow up there with the sales rep expansion. Just maybe what are you seeing here? Is it complete? Are there still territories to fill? And then I guess a follow-up to that would be, as the sales team continues to grow, when should we maybe expect some sort of inflection here, if any? Just trying to think about ramp times and the like.

Lauren D’Angelo: Sure, sure. No, thanks for the question, Dave. So over the past quarter, the team has been focused on increasing the sales force to ensure that we have greater reach and frequency on our customer base. I'm pleased to announce that our increase is fully filled. So I know you asked how many territories do we have left to fill. We moved very quickly. That's the beauty of having a very experienced long-term care leadership team. I think we've talked about that a lot on previous calls. So we were able to expand our sales force as of January.

And really, we had almost 98% full and then we've recently added a couple more reps in March to complete our full sales force expansion. So that's one key mechanism that we believe is going to accelerate the business significantly. There's also a couple of other things that we've done with the sales force. So we've really honed in on behaviors and going deeper with psychiatry.

That was a big reason or factor on why we did expand the sales force because we found that our drug, the feedback we're getting on our drug and the behavioral symptoms is far better than we expected, and we knew that we need to expand to the psychiatry customer within the long-term care setting. And so we've done that. We're putting these new reps, the expanded reps out there delivering that message. And then on top of that sales force, right, because we know payer is a friction point for us, we've increased our reimbursement team. And that will allow, as the team has expanded, we put additional sales reps on the ground.

We now have additional field reimbursement team who can help pull their demand through from a payer perspective. So that's been a key mechanism for us as well. And then, of course, with the expanded sales force, I know you asked a question about sales force, but it kind of -- it is a domino effect on all the other mechanisms that we put into place to fully support that expansion is this training of the 48 thought leaders so that with the additional sales force, they'll be able to leverage the KOLs and get out there and support the peer-to-peer education.

So we really believe that really those 4 key areas are the mechanisms they're going to help us accelerate. And we believe that when it does, it's going to be very meaningful.

David Storms: That's great color. I appreciate that. Can I just circle back maybe on to something you mentioned in your answer about expanding to psychiatry customers. Now that ZUNVEYL has been in the market and you're starting to get the market reception of it, I guess how else is that marketing changing? Is the psychiatry -- yes, go ahead.

Lauren D’Angelo: Sure. Yes. When we originally launch the product, and I think even for several years leading up to the launch, right, when we were planning the positioning of ZUNVEYL, it was all about the tolerability, right? The no GI, we know that's a significant issue with the acetylcholinesterase inhibitors. And so that's really where we leaned into. Then we -- at the same time when we launched, we talked about the dual mechanism of action, and that's how it differentiates us from the other acetylcholinesterase in the class. So that was really our core positioning when we launched ZUNVEYL.

But very quickly, and I think you guys will remember from the last couple of calls, the feedback we were hearing from customers around how this drug was working on behaviors really was just overwhelming. And behaviors, what we learned is really what drives adoption in the nursing home because the behaviors are what the physicians are obviously very concerned about when you've got this frail population living in a nursing home. So we've shifted our positioning. We still hone in on strong tolerability. I mean, to date, we still only have 2 spontaneous reports of GI. We've been out there for almost a year now. I mean that's pretty incredible if you think about it.

Not to say that it's not happening in other places, we just haven't heard about it. But we've really shifted more to this behavioral messaging the dual mechanism of action supports that behavioral messaging, and it's widened our prescriber base because the psychiatrists in a nursing home treat those behaviors. So I would say we're still positioning on GI and tolerability, but it's really those 2 things, behaviors and tolerability. And that's really the small shift. But we made that shift pretty quickly a couple of quarters ago because we just kept hearing great stories from physicians.

What I can say, David, is going all the way back to our first call, the first month we launched and the stories we were hearing, we hear those stories on a routine basis. I just talked to a customer yesterday. This is probably our most successful story yet, where there was a patient who was living in a nursing home, terrible behaviors, very agitated, there's a lot of these patients, but throwing things at the staff, that patient is going home after being on 3 months of ZUNVEYL. I mean you can't get a better success story than that. So we're really leaning into those providers who have tried it, they love it.

You see that through the repeat ordering. We're leveraging that experience. We're now taking that experience through peer-to-peer education so that other providers who haven't adopted the drug will hear those stories. And then, of course, we're leaning into the product profile, which is behaviors and tolerability. So I hope that's helpful.

David Storms: That's super helpful. And I mean, I know it's anecdotal, but that is a great story. One more, if I could. Michael, just because I really appreciate your answer around the CONVERGE study. If I could compare it maybe the same phrasing for the BEACON trial. Maybe just any thoughts on what aspirational outlook is like for BEACON and maybe compare it to CONVERGE?

Michael McFadden: Yes. So BEACON is a different study in that it will look at ZUNVEYL tolerability, ZUNVEYL efficacy in treating cognition, ZUNVEYL efficacy in treating behavioral symptomatology. And so we hope with -- at the end of that study, aspirationally, we hope that the study demonstrates strong cognitive effect, strong behavioral symptomatology amelioration or improvement, along with great tolerability for ZUNVEYL. That would be the hope. We'll see what the data tells us. But it's a very important study for us because in the long-term care market or long-term care segment of the Alzheimer's market, there are very few completed studies. There's very few observational Phase IV and almost no Phase III studies to evaluate drug performance evaluate drug tolerability.

And so this will be one of the first studies that provides a very good data set and 200 patients in the nursing home market. And we plan to use that data not only with our providers, the physicians who treat but the nursing homes who administer care for the patients and just as importantly, the payers who are making coverage decisions on behalf of ZUNVEYL. So we think that study is going to be very meaningful for the company.

David Storms: That's great. And just a point of clarification. You mentioned in your prepared remarks that we should expect those results in Q4 of this year?

Michael McFadden: Yes. For BEACON in Q4 of 2026. And for CONVERGE, we'll have top line data in Q3 of 2026.

Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Michael McFadden: Okay. Thanks, everybody, for attending the call today. I think you've heard our focus for 2026. I'll just reiterate, we plan to continue to focus on sales execution. We plan to focus on payer coverage and improvement in ZUNVEYL coverage with our payers. While doing that, we'll work diligently to complete our studies on time and with high quality and advance our R&D pipeline. And along with all of that, as we have done, to date, we'll manage our expenses appropriately to move to operating profitability in 2027. So you can look forward for updates on all of those items as you follow the company through the course of 2026. Thanks for attending.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

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