Alpha Cognition's Q3 2025: Contradictions Emerge on ZUNVEYL's Marketing, Payer Coverage, Authorization Efficiency, Market Penetration, and Gross-to-Net Discounting

Date of Call: November 13, 2025

Financials Results

• Revenue: $2.8M in Q3 2025, including $2.3M net product sales (ZUNVEYL) and $0.507M licensing revenue from collaboration with CMS
• EPS: Net loss of $1.3M; $0.08 basic loss per share and $0.30 diluted loss per share, versus net loss of $1.9M or $0.31 per share in Q3 2024
• Operating Margin: Operating loss of $5.3M in Q3 2025 versus $2.5M in Q3 2024

Guidance:

• No formal revenue guidance provided; expect continued sequential ZUNVEYL sales growth through 2026
• Full‑year 2025 operating expenses expected to be $28M–$30M (reduced from prior guidance)
• CONVERGE study starts Q4 2025, completes Q3 2026; BEACON starts Q1 2026, completes Q4 2026
• RESOLVE registry to begin Q1 2026
• Sublingual formulation/taste work complete Q1 2026; comparative PK study and IND planned for Q3 2026
• CMS partner filing in China accepted; ~18‑month review, potential approval by end of 2026
• Expect a second PBM contract by end of 2025 and ~2 quarters to realize unrestricted coverage

Business Commentary:

* Revenue Growth and Product Sales: - Alpha Cognition reported total revenue of $2.8 million in Q3, with $2.3 million in net product sales from ZUNVEYL, showing early traction. - The growth was primarily driven by the successful commercial launch of ZUNVEYL, which is gaining traction in the long-term care market and has begun to receive widespread adoption among prescribers.

• Operational and Expense Control:
• The company's operating expenses rose to $8.2 million, up from $2.5 million in the same period last year.

• The increase reflects higher SG&A costs associated with scaling commercial launch activities. The company is focusing on cost discipline and operational efficiency to manage expenses amid growing revenue potential.

• Clinical Performance and Payer Access:

• ZUNVEYL has shown promising clinical performance with low adverse event rates, attributed to its well-tolerated medication profile.

• The company's focus on improving payer access is yielding results, with one of the four major Medicare plans under contract and an anticipated second contract by year-end, expanding coverage for ZUNVEYL.

• Medication Dosage and Prescriber Confidence:

• Half of the prescriptions are at the 10-milligram dose, indicating prescribers' confidence in ZUNVEYL's tolerability and efficacy.
• This rapid confidence in titrating patients to the therapeutic dose is due to ZUNVEYL's low adverse event profile, which is a significant improvement over existing treatment options in the market.
  

Sentiment Analysis:

Overall Tone: Positive

• Management emphasized "continued momentum" and "steady revenue growth" from ZUNVEYL, highlighted a strengthened balance sheet with $35.4M cash plus ~$38M raised in October, and noted commercial KPIs (ex‑factory purchases +44% vs Q2; dispensed bottles +102% vs Q2) and expanding payer progress, supporting a positive outlook.

Q&A:

• Question from Ram Selvaraju (H.C. Wainwright): What is the current status of contracting discussions? How many GPOs/PBMs have agreed to cover ZUNVEYL and is the second contract expected by quarter‑end?
  Response: One of four targeted major PBMs is under contract; management expects a second major PBM contract to complete by quarter‑end and is focused on pulling coverage through downstream regional accounts.

• Question from Ram Selvaraju (H.C. Wainwright): You mentioned about 15% coverage without restriction — can you confirm that 15% figure and the timeline for broader adoption?
  Response: About 15% of downstream accounts from the signed plan are already processing claims without restrictions; broader adoption typically takes 6–9 months and more visibility will come over the next quarters.

• Question from Ram Selvaraju (H.C. Wainwright): Can you provide details on prescriber counts and the breakdown between repeat and new prescribers/homes?
  Response: Q3 had 576 prescribers with 62% writing multiple orders; launch‑to‑date 605 homes ordered with 70% repeat ordering and 15% new homes in September, indicating strong trial and repeat usage.

• Question from Ram Selvaraju (H.C. Wainwright): When do you expect benzgalantamine royalty revenue from China to begin?
  Response: Mainland China revenues are unlikely until 2027; smaller Asian countries may gain approval in 2026 and generate immediate localized launch revenue.

• Question from Boris Peaker (Titan Partners): What marketing messages are resonating with prescribers, and what is the most common pushback you receive?
  Response: Top messages are label‑consistent behavioral benefits and no impact on sleep; main pushback is payer/prior authorization hurdles, so the company is expanding reimbursement support to improve approvals.

• Question from Boris Peaker (Titan Partners): Explain the WACC/price adjustment and its impact on gross‑to‑net and revenue per patient.
  Response: A price increase (~+9% short term) was implemented; management expects steady‑state net price of $500–$550 per bottle and GTN in the mid‑to‑upper 20% range, with current high realized net due to limited contract coverage (~15% unrestricted).

• Question from David Storms (Stonegate): You noted ~50% of scripts are 10 mg — how does demand vary by dosage and how does that change as prescribers gain comfort?
  Response: Although slow titration was expected, low adverse events have accelerated titration: prescribers are reaching 10 mg faster (often 4 vs 8 weeks), producing a faster‑than‑expected shift to a 50/50 5 mg/10 mg split.

• Question from Boris Peaker (Titan Partners): Is the sales cycle shortening and are prescriber interactions converting to orders more quickly over time?
  Response: For prescribers who've tried the drug, ordering accelerates quickly and repeat orders are common (70% homes repeat); however, naive providers still follow a multi‑month adoption curve—once initial positive experience occurs, expansion speeds up.

Contradiction Point 1

Marketing and Sales Strategy for ZUNVEYL

It highlights a shift in marketing and sales strategies for ZUNVEYL, which could impact the product's market penetration and revenue generation.

What is the split between repeat and new prescribers for ZUNVEYL? - Unknown Analyst (H.C. Wainwright)

20251114-2025 Q3: Our sales strategy has evolved, focusing on challenging market dynamics. Initial efforts have been to raise product awareness among healthcare professionals. - Lauren D'Angelo(COO)

What are the key marketing messages effective with prescribers, and what pushback has been encountered? - Boris Peaker (Titan Partners)

2025Q3: We are actively engaging prescribers through digital and non-digital communication channels to discuss the unmet need in AD and how ZUNVEYL meets this need. - Lauren D'Angelo(COO)

Contradiction Point 2

Contracting and Payer Coverage for ZUNVEYL

It involves differing timelines and expectations for securing payer contracts, which are crucial for market access and reimbursement.

What is the status of contracting discussions, and how many GPOs have agreed to cover ZUNVEYL? - Unknown Analyst (H.C. Wainwright)

20251114-2025 Q3: One is already contracted, with another expected by year-end. The goal is to pull through contracts to achieve broad coverage in 2026. - Lauren D'Angelo(COO)

How many prescribers are engaged with the product through the sales team, and do you have notable prescriber feedback examples? - Unknown Analyst (JPMorgan)

2025Q3: We are focused on U.S. market access by securing contracts with major payers to drive adoption and coverage. We've executed an agreement with a significant PBM. - Michael McFadden(CEO)

Contradiction Point 3

Prior Authorization Efficiency and Management

It involves the company's ability to manage prior authorizations efficiently, which directly impacts sales and revenue.

What are the issues with prior authorizations and how is the company prioritizing R&D capital allocation? - Unidentified Analyst (Titan Partners)

20251114-2025 Q3: We've made further improvements in our ability to manage prior authorizations with our funnel rate stabilizing to 90%. We've gone from managing 150 to 160 prior authorizations per day in mid-August to managing 400 to 450 per day today. - Lauren D'Angelo(COO)

What are the current prior authorization challenges and how is the company allocating capital to R&D? - Unidentified Analyst (Titan Partners)

2025Q2: Prior authorizations are increasing due to higher demand, with a simple checklist required for approval. These are being managed effectively with a 90% order fulfillment rate. - Lauren D'Angelo(COO)

Contradiction Point 4

Patient Population and Market Penetration

It involves differing perspectives on the patient population and market penetration for the drug ZUNVEYL, which impacts potential market share and revenue projections.

Have you seen any indications of interest from practitioners, patients, or families outside the long-term care setting in accessing the drug? - Michael Freeman (Raymond James)

20251114-2025 Q3: We believe there are many more Alzheimer's patients in long-term care facilities who could benefit from ZUNVEYL, and we are actively pursuing those opportunities. - Michael McFadden(CEO)

What patient penetration in Tier 1 LTC targets does Alpha Cognition expect in the first year? - Dave Storms (Stonegate)

2025Q1: In a typical nursing home with 100 residents, 70 have Alzheimer's disease. Half of these patients are not on any treatment. We see a deep penetration with potential for significant conversion to ZUNVEYL. - Lauren D'Angelo(COO)

Contradiction Point 5

Gross to Net Discounting Expectations

It involves changes in financial forecasts, specifically regarding gross to net discounting, which are critical indicators for investors.

What is the current status and expected trend for gross-to-net discounting? - Unidentified Analyst (Titan Partners)

20251114-2025 Q3: Gross to net discounting for the quarter was approximately $600. We expect that our gross to net discount will trend between $575 and $625 over the following quarters. - Michael E. McFadden(CEO)

What is the current status and expected evolution of gross-to-net discounting? - Unidentified Analyst (Titan Partners)

2025Q2: Current gross to net discounting is approximately $600. It is expected to be in the $575 to $625 range over the coming quarters, dependent on patient mix per health plan. - Michael E. McFadden(CEO)