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On Friday, Brookline Capital Markets updated its outlook on Cognition Therapeutics (NASDAQ:CGTX) shares, raising the price target to $7.00 and reaffirming a Buy rating. The stock, currently trading at $0.43 with a market capitalization of $17.73 million, has received a "Weak" overall financial health score according to InvestingPro analysis, with analyst price targets ranging from $2 to $11. The adjustment comes after Cognition Therapeutics announced its fiscal year 2024 results, which aligned with market projections. Research and development expenses for the year were reported at $8.2 million actual, lower than the $10.7 million estimate, mainly due to decreased costs associated with the Phase 2 SHIMMER trial for dementia with Lewy bodies (DLB).
The company’s grant income also fell short of expectations, coming in at $3 million actual versus the anticipated $5 million estimate. Despite these variances, the year was notable for Cognition Therapeutics due to significant clinical advancements. InvestingPro data shows the company maintains a healthy current ratio of 2.65, though it’s quickly burning through cash reserves. The biopharmaceutical company reported encouraging data from its studies on Zervimesine, a treatment for mild-to-moderate Alzheimer’s disease (mmAD) and DLB.
Looking forward, Cognition Therapeutics is concentrating on progressing its Phase 3 programs for these indications. The company is actively seeking partnerships and out-licensing opportunities to facilitate further development of its treatments. The revised price target from Brookline Capital Markets takes into account the latest share count following at-the-market (ATM) offerings in the fourth quarter, adjusted grant revenue, the exclusion of MAGNIFY trial expenses, and the annual update of the discounted cash flow (DCF) model used for valuation.
Brookline Capital Markets’ analysis reflects a continued optimistic stance on Cognition Therapeutics’ prospects, as the company aims to address significant unmet medical needs in the treatment of Alzheimer’s and dementia-related diseases. While the stock has declined 39.16% year-to-date, InvestingPro analysis indicates the stock may be undervalued at current levels. Subscribers can access 8 additional ProTips and a comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks. With a clear focus on advancing its clinical programs and a strategic approach to financing its developments, Cognition Therapeutics is positioned to potentially bring new solutions to the healthcare market.
In other recent news, Cognition Therapeutics reported a net loss of $34 million for the year 2024, consistent with the previous year’s performance. The company remains focused on its Alzheimer’s and Dementia with Lewy Bodies (DLB) programs, having discontinued other projects to allocate resources more effectively. Cognition Therapeutics raised $12.8 million through an ATM facility, which is expected to extend its cash runway into the fourth quarter of 2025. The company is also confident about regaining NASDAQ compliance by September 2025. Research and development expenses increased to $41.7 million, up from $37.2 million in 2023, while general and administrative expenses decreased to $12.3 million. The company is actively seeking non-dilutive funding through partnerships and has received positive feedback from key opinion leaders regarding its clinical trials. Cognition Therapeutics is preparing for potential Phase III trials and is exploring lower dose levels for future studies.
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