On Thursday, H.C. Wainwright adjusted its stock price target for Cognition Therapeutics (NASDAQ:CGTX), a company focused on developing drugs for neurodegenerative disorders. The firm increased the price target to $6.00 from the previous $5.00, while maintaining a Buy rating on the stock.
According to InvestingPro data, analyst targets for CGTX range from $1.00 to $11.00, with the stock showing strong momentum with a 14% gain over the past week. This change follows the announcement of positive results from the Phase 2 SHIMMER trial of CT1812, Cognition Therapeutics' lead drug candidate.
The SHIMMER trial evaluated CT1812 in patients with dementia with Lewy bodies (DLB), a condition characterized by cognitive decline similar to Alzheimer's disease but with additional symptoms like hallucinations and parkinsonism. The study involved 130 patients who were administered either CT1812 or a placebo over a six-month period. The primary goal was to assess the safety and tolerability of the drug.
According to the press release issued on Wednesday, the trial met its primary endpoint. Patients treated with CT1812 showed improvements in behavioral, functional, cognitive, and movement measures compared to those who received the placebo.
Notably, there was an 82% reduction in the progression of neuropsychiatric symptoms, such as anxiety, hallucinations, and delusions. While the company's market capitalization stands at $24.1 million, InvestingPro analysis reveals it maintains a healthy current ratio of 2.11, indicating strong short-term liquidity.
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The analyst from H.C. Wainwright cited these positive trial results as a reason for the increased price target. The firm also incorporated the DLB indication into its valuation assessment, assigning a 30% likelihood of approval to CT1812. They anticipate a potential market launch in 2028, assuming the drug will undergo a pivotal development program that may require only a six-month evaluation period.
The successful trial results and the subsequent price target increase reflect the analyst's optimism about CT1812's market potential, especially considering the unmet medical need in treating DLB, which affects an estimated 1.4 million individuals in the United States alone. The company holds more cash than debt on its balance sheet, though InvestingPro data indicates it's currently burning through cash with an EBITDA of -$58.33 million in the last twelve months.
In other recent news, Cognition Therapeutics has completed its Phase 2 SHIMMER study of CT1812, a drug candidate for the treatment of dementia with Lewy bodies (DLB). The company is also making significant strides in Alzheimer's research, with its Phase 2 SHINE study revealing a slowing of cognitive decline in Alzheimer's patients.
A study published in The Journal of Prevention of Alzheimer's Disease further demonstrates potential benefits of CT1812 in improving brain wave patterns and connectivity in Alzheimer's patients.
The company's second quarter 2024 earnings call reported a net loss of $7 million, with an increase in research and development expenses. However, Cognition Therapeutics holds $28.5 million in cash and cash equivalents, which is expected to fund operations until the second quarter of 2025.
H.C. Wainwright reaffirmed its Buy rating on shares of Cognition Therapeutics, reflecting positive study results for the company's Alzheimer's treatment. The firm's confidence in the company's stock follows the presentation of these results at a recent medical conference.
These developments highlight Cognition Therapeutics' ongoing commitment to advancing its clinical programs and its potential role in the fight against neurodegenerative diseases. The company is now evaluating options to extend its cash runway and support later-stage trials.
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