Alpha Cognition Inc. Common Stock (ACOG) Q1 2025 Earnings Report, Transcript and Summary

Greetings, and welcome to the Alpha Cognition earnings call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Henry Du, Alpha Cognition's Interim CFO. Thank you. You may begin.

Thank you, Sachi. Good afternoon, everyone, and thank you for joining us today for Alpha Cognition's First Quarter 2025 Financial Results Conference Call. Today, after the close of market, the company issued a press release announcing these results. On the call with me are Alpha Cognition 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, the 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 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. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on May 15, 2025, 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?

Thank you, Henry. Good afternoon, everyone, and thanks for taking the time to join us on today's call. This is an exciting quarter for Alpha Cognition. As it marks our first quarter of recorded revenue for ZUNVEYL, our treatment for mild to moderate Alzheimer's disease. The first quarter of 2025 was characterized by a successful ex U.S. business development deal an additional U.S. patent approval and the commercial launch of ZUNVEYL. First, I'll make a few comments on the business development front. We've already made significant progress with our first ex U.S. partner, CMS Pharmaceuticals, who is representing ZUNVEYL research and development and distribution in China and other Asian territories. We expect our first territory distribution initiation in the second half of 2025 in a small territory and expect regulatory submission for approval in China in Q4 of 2025. The company anticipates modest royalty revenue from the CMS deal in 2026. The company is in advanced discussions with another company in an additional territory and expects an additional business development deal in the latter part of 2025. That deal is consummated, will generate revenues for Alpha Cognition in 2026. In February, the company received patent notice from the U.S. patent office that our composition of matter patent coated tablets for pH-dependent release of benzgalantamine was approved. That patent adds to the Alpha Cognition patent portfolio and provides additional patent protection through 2044. In April, the patent was accepted in the Orange Book. We've also received notice from FDA that the company requests for a patent extension of an early method of use patent will be extended, and we expect to hear the date of that extension in Q3 of this year. Now regarding our commercialization activities. We believe ZUNVEYL launch is off to a great start. The qualitative feedback is above our expectations, and we're hearing positive patient treatment stories that indicate the product works and patients are tolerating ZUNVEYL as our data indicated they would. Prescriptions are being written as early as the first call by our sales team. And this tells us the data is compelling and the need to treat is high. We have multiple abstracts accepted for presentation at the upcoming AAIC meeting in July and anticipate additional manuscripts accepted later in the year. Our goals in 2025 with our commercial launch are to establish ZUNVEYL as a core therapy, deliver breadth of prescriptions across nursing homes and build our prescription base of experience with gerontology groups that will grow exponentially in 2026. We anticipate approximate size of our team will be fairly consistent year-over-year with single-digit increases in head count possible as the company grows its business or advances its pipeline. We continue to believe the capital of the company has raised is sufficient for Alpha Cognition to move to a positive cash flow position in year 3, if we execute according to our plan. After Henry provides an update on our financials, Lauren will provide more color on the launch and the metrics we're looking at. Henry?

Thank you, Michael. Good afternoon, again, everyone. As I review our first quarter results, please refer to today's press release and 10-Q that were filed earlier this afternoon. Starting with our operating results. For the first quarter of 2025, our operating loss declined to $3.7 million versus $4.4 million during the same period in 2024. The improvement was largely attributed to initial net product revenues from ZUNVEYL of $347,000 in the last 2 weeks of March and recognized licensing revenue of $2.6 million from the company's exclusive licensing agreement with CMS. This was partially offset by an increase in general and administrative costs associated with our commercial launch readiness activities, including hiring of sales force and consultant fees as well as noncash stock-based compensation expense. Turning to net income performance. For the first quarter of 2025, we reported a net loss of $2 million or $0.13 per share, a decrease of $3 million compared to a loss of $5 million or $0.87 per share in the same quarter last year. This was primarily driven by an increase in interest income and favorable changes in the fair value of derivative liabilities. Now moving on to the balance sheet. As of March 31, 2025, the company had approximately $45.5 million in unrestricted cash and cash equivalents, primarily due to the cash generated from the fourth quarter 2024 capital raise. Additionally, in the first quarter of 2025, we successfully retired our outstanding $900,000 debt obligation with NLS. As of March 31, 2025, the company maintains a debt-free balance sheet, reinforcing our financial strength and flexibility. The company has a strong balance sheet with sufficient liquidity to launch ZUNVEYL into long-term care segment of the market. Lastly, a word on guidance. While we are not providing revenue guidance at this time, we are reiterating our full year 2025 expense guidance, which remains in the range of $38 million to $42 million. We continue to believe this range appropriately reflects the investments needed to support our commercial operations and corporate objectives this year. In summary, we made meaningful progress in the first quarter of marked by reduced operating and net loss, initial revenue contributions from ZUNVEYL and a strong liquidity position. These results reflect disciplined financial management and early signs of commercial traction. We remain focused on executing our strategic priorities and delivering value to our stakeholders. With that, I will now turn the call over to Lauren to discuss commercial progress. Lauren? Lauren D’Angelo: Thank you. Henry. I'm pleased to provide an update on our commercial progress following the launch of ZUNVEYL, which is now available nationwide. We officially launched just over a month ago, and I'm excited to report that the early response from the market has been both encouraging and validating. Our commercial strategy was purpose built for the long-term care segment where the need for effective and tolerable Alzheimer's therapies is significant, and ZUNVEYL is already making an impact. As of April 1, ZUNVEYL became reimbursable by Medicare, a critical milestone for long-term care access. This enables access to our drug in the Medicare system, a required and critical factor in our segment. Despite launching with no payer contracts in place, we've seen that nearly all of the ZUNVEYL orders have been filled successfully with or without a prior authorization. That speaks volumes about both the market demand and the clinical confidence providers already have in ZUNVEYL. The feedback from health care professionals has been overwhelmingly positive. Our sales team is energized and reports that the message around ZUNVEYL's clinical benefits and its differentiation in the space is resonating clearly. So let's dive into some early launch metrics. As of last Friday, May 9, just 5 weeks post Medicare approval, we've seen approximately 500 bottles ordered, a meaningful indicator of real-world demand and growing confidence among providers. We're also seeing repeat writers, which we take a strong signal of clinical adoption and satisfaction. In the first month, we can report 66% of our top-tier long-term care targets have been engaged by our field force with approximately 1,400 unique homes reached. Approximately 100 unique accounts have placed orders with half of them already reordering, indicating satisfaction with their results. This equates to an average of 17 orders per day in just the first 5 weeks. And even more importantly, the wholesalers are restocking their initial orders, and we have already seen our initial stocking of the 5-milligram dose replenished. And last, but certainly not least, I am pleased to share that we have generated approximately $1 million in net sales through April 30, just 4 weeks into the launch. The feedback from clinicians is consistent. They see ZUNVEYL as a much-needed option for long-term care patients, offering the right combination of cognitive benefit, tolerability and ease of administration. We're also encouraged by the early signals of market access. We've seen minimal restrictions, a strong signal of payer confidence in ZUNVEYL's value proposition. Many plans have implemented a simple or single step prior authorization, making it easier for prescribers in the long-term care setting to initiate therapy without administrative burden. This level of access without contracts so early in launch is encouraging and supports continued momentum as we expand coverage. We are engaged in conversations with the key plans and many national and regional plans have indicated they're closely watching our prescription volume and utilization trends before making formulary decisions. We view this as a standard part of the access curve for a new product and remain confident that our early uptake will support broader inclusion over the coming quarters. From a promotional perspective, our multichannel strategy is delivering results. Our digital, promotional, educational programs are underway and early response from the field suggests strong receptivity. We have presented to over 100 health care providers through our virtual webinars to date. Our medical team has engaged with approximately 150 providers, and these interactions have been initiated by the health care provider, demonstrating strong interest from our customers. We know that disrupting entrenched prescribing behaviors in long-term care and working through the initial market access takes time, but these early results show clear momentum and strong execution by our team. With each week, awareness, adoption and enthusiasm for ZUNVEYL continues to build. Overall, it's been a highly productive first month we've validated demand, executed our launch plan with precision and laid a strong foundation for continued growth as we expand access and awareness in the months ahead. I'll now hand it over to Michael for Q&A.

Thank you, Lauren. In summary, the team is excited about the commercial launch of ZUNVEYL. I think you hear that in Lauren's comments today. Qualitative feedback from physicians, pharmacists and long-term care facilities is supportive of a drug that's both efficacious and well tolerated. Our physician and pharmacy engagement is very high, and our payer restrictions are about as expected. The company believes we have a disruptive opportunity with ZUNVEYL, and we'll focus this quarter on our selling efforts, continuing to exercise financial discipline and our ex U.S. operational execution. Operator, we'll now take questions.

[Operator Instructions] The first question is from Ram Selvaraju from H.C. Wainwright.

Congratulations on all this impressive progress in a very short period of time. I wanted to ask, first of all, some questions about the commercial metrics that were provided. And if you could maybe give us additional details on some of these fronts. In particular, the following 4 aspects: Firstly, if you can give us a sense of how many repeat prescribers there are at this point in time? And how you expect that number to evolve going forward? Secondly, if you can give us a sense of the length of time the first patients in, so to speak, have been on therapy and what you expect to be the average length of time patients stay on therapy given the enhanced safety and tolerability profile of this drug relative to other older generation acetylcholinesterase inhibitors? Thirdly, if you could just walk us through the prior authorization requirement for ZUNVEYL as it stands today? And then lastly, not sure whether you would be in a position to do this at this point, but any color and granularity you could give would be helpful. If you can give us a sense of how you expect contracting to evolve over the course of the next 3 to 6 months?

Lauren, why don't I take the first part of that question and then have you walk through some of the metrics. So on the length of time patients have been on therapy. We were approved by Medicare for reimbursement on April 1. We had patients on drug April 1. Orders were submitted. Patients were initiated therapy. So the longest time patients have been on since April 1. Now we have seen that number increase every week, week over week. And now we have patients on a range of 1 to 6 weeks. We anticipate the patients as long as they're benefiting from efficacy of the drug, and they're seeing the tolerability that we are hearing about thus far, they could be on this drug, the remainder of their life as Alzheimer's is a debilitating progressive disease, we know that the data shows very clearly these drugs slow progression of disease, ZUNVEYL minimizes the behaviors that occur with disease. So we believe that physicians will keep patients on drug as long as they're tolerating the drug and it's working for them. I'll mention one other comment. We've had many patients on drug already. We've had no reports thus far of any adverse events relative to GI and no adverse events relative to insomnia. Now it's early, and we may not be hearing all of the adverse event reporting that does exist, but it's very encouraging to us that we've seen so far a very tolerable drug with these patients. I'll turn it over to Lauren to talk about repeat Rxs and our payer work. Lauren? Lauren D’Angelo: Sure. Thanks, Michael. So far, we look at it from an account basis as we think about the nursing homes who are placing orders for our product. And of the 100 unique accounts who have actually written orders or written prescriptions, more than half of them have already written again. What we're seeing, if you think about a bell curve for prescribers, our initial orders are coming from that far right. So we've got a pretty good number who are writing a lot of prescription. And then where the market is, is actually that middle of the bell curve. That's what's going to move the market. We've seen initial uptake from them. And with that group, it's going to take a little bit more time until they're writing a lot of product repeatly. But we're seeing more than half of the accounts have already placed an additional order. As it relates to the prior authorization detail, I can honestly say this has been the best I've seen out of my 20 launches. Now I don't want to get you guys too excited. We know that with more demand for our product and this pretty big initial uptake that those restrictions may get tighter as plans start to pay attention. But just -- I know you asked for a specific example in terms of what the PA detail looks like. They've been pretty simple. So it varies across all the plans. I have a running list of the Medicare plans and what some of their prior auth restrictions look like. I'd say about half are pretty easy. You check the box. Has the patient already tried a generic? Is there a reason the patient can't use one of the formulary products. We've seen many simple PAs for more than half of the key plans. There are some others that we've seen that might require have they failed a generic, what is a specific reason that they can't use a formulary drug and why this drug. What we haven't seen, which is not typical that I've experienced in the past is having to prove it. So many of these prior authorizations are actually just check boxes. They're not having to provide documentation. So we're pretty pleased with what we're seeing from what they're requiring from a PA level. There's only one plan where we've seen a double step at it. Two generics -- failed 2 generics out of all the plans that we're kind of keeping track of. So that's one. And then as that goes into contracting, we are continuing to engage with the key plans across our Medicare space. As you guys know, there's really 5 key plans that matter. We are talking to all of them. We are pleased with our conversations. We are progressing those conversations. A couple of them are waiting and seeing, which is very typical of an access curve. They want to see what our initial utilization and uptick looks like. So we expect over the next couple of quarters, we will have specific data to show, and we're feeling very positive about contracting. But I do want to note we're seeing nearly every prescription goes through without any contracts. We know we can be successful in this space without coverage. Obviously, we're going to work to get coverage in 2026 to make it easier from an administrative perspective, but we feel really good about where we're at, the restrictions we're seeing and the growth that we can get even without coverage. Did we hit everything, Ram? Did we answer all the questions? I wrote them down, I think we hit them.

Yes. There were just 3 other aspects I was hoping you could talk through, if I may. Firstly, when you talk about the world beyond Medicare, what does that look like? Give us a sense of the commercial plans and the total number of covered lives that we might be talking about as we get beyond Medicare and how relevant that is likely to be for the future of this drug? Secondly, when we talk about the prior authorizations, I'm specifically interested in whether or not you think in the future a prior authorization requirement might emerge that specifically asks whether the patient has previously tried and failed galantamine. Or if you think that's unlikely to develop mainly because we all know the usage patterns of donepezil is far more widely used than galantamine. That doesn't seem very practical, but just wanted to see if you think that's likely to emerge in the future. And then lastly, with respect to the ways in which you might look to promote the drug going forward. Just wanted to see what your thoughts were on 2 specific aspects, one is sampling as well as the advertising aspect of this? And what specific promotional channel you anticipate is likely to be most appropriate for a drug like this? Lauren D’Angelo: Sure. Thank you. So as it relates to the percentage of plans and percentage of lives, if you look at the nursing home setting, I mean, I would say 80% is pure Med D, right? So you've got some cash, some Medicaid, there -- I mean commercial would be very, very minimal in the long-term nursing setting. Remember, we're going after long-term stay patients who are living in a nursing home. Now as we look to expand into neurology in the future, we will pursue commercial contracts, and that's just kind of a natural step after we get Medicare, Medicaid will move into the commercial plans. Right now, it's not as a big deal for us. I think you were kind of looking for like future. In the future, it's -- we will go after the commercial plans. It's still a pretty small percentage when you look at the overall Alzheimer's market, considering most of these -- the average age of Alzheimer's is 80 years old. There are some early onset, no question that would be on a commercial plan. So our focus right now is Medicare Part D plans. We have -- we are on the list for Medicaid. We're out there depending upon the state right now is when we become effective. So many states, you can get our drug on Medicaid. And what we're finding is the Medicaid plans are not requiring prior authorizations. Some states, our Medicaid coverage will become effective by mid-May, end of May, June. But by federal law, every state in this country you can get access to ZUNVEYL by July 1 of this year from a Medicaid perspective. And then again, we are going to move to our next tier of commercial plans once we complete our work with Medicare and contracting. As your question relates to the galantamine, we do not expect that to be a very specific question on a prior authorization. We have not seen that to date. Again, I've got a running list of what some of these plans are asking for as we're submitting our ZUNVEYL orders. We do not expect that to be an issue because 75% are on donepezil or have failed donepezil. That's really the market leader. What we see is the question around have they tried a generic. Now there has been a couple will they say, have they tried donepezil, rivastigmine or galantamine, but they haven't specifically called out galantamine, and we do not expect that to be something that they'll focus on moving forward. And then as it relates to our promotional strategy and what that will require as we move forward with the drug, right now, our focus is on execution in the nursing home. We know we've got to knock it out of the park this year in order to expand into other segments of the market. The reason we love long-term care and was one of our main strategies for launching here is it does require minimal promotional spend relative to a neuro sales force that requires 75 sales reps that requires all the surround sound, direct-to-consumer, driving the caregiver in. So with long-term care, our promotional efforts right now is how do we make the biggest impact with our current customers. So we are looking at all kinds of alternatives on how we're reaching these customers. We've had, as I mentioned, a digital program on webinars where we're able to access our customers. We've been conducting a number of different advisory boards to get feedback on how we can reach at more of our customers. We're participating in all the key long-term care conferences. Now Ram, as we move forward, and our goal is to expand into neurology at some point, we will then offer sampling. Sampling is not actually allowed in the long-term care setting. So we have no samples today. When we look to expand into neurology, we will allow sampling. We would look for more of your surround sound advertising once you go big and you're kind of going out to the retail market. For now, though, our spend, we're maximizing our spend with really getting to as many nursing home accounts as we can.

The next question is from Michael Freeman from Raymond James.

Congratulations on all this progress. It sounds like a sensational early launch. I wonder, of course, your focus on long-term care, and this seems like a very rational market to be starting with for all the reasons you've just mentioned. I wonder -- I know it's the first month, but I wonder if there have been any sort of indications of interest from practitioners or even patients or the families from outside of the long-term care setting interested in gaining access to the drug? Lauren D’Angelo: Sure. And that's a great question. And yes, we have seen interest outside of long-term care. We've got our website where the provider or the caregiver can go on and request information about the product. We have had outreach. We had outreach from the retail setting even since the approval prior to the launch. And we are -- every request that we get for a conversation, we are having that conversation. The reason we went to the 3 large wholesalers so that ZUNVEYL would be accessible at any pharmacy across the country, we know there's going to be spillover. There's also physicians who treat the long-term care who might have a day in the typical retail environment, and that will carry over as well. So yes, we have had reach out. We started getting retail literally once we got the approval for the drug. And we are definitely following up on those. We have a system in place where the rep will go call on that retail doctor if we're getting a request. And our medical team is doing quite a bit of that work as well.

Got you. Okay. And Michael, you touched on this with the earlier set of questioning. But I wonder if you could provide any color you can, of course, recognizing this is the first month of patients on drug. Any early feedback around? You touched on adverse events. I wonder if there's any commentary around efficacy? Or just like any feedback you're getting from these early patients on drug?

I'll speak globally and then maybe, Lauren, I think it'd be really helpful for her to share a couple of patient examples with the group because that's really enthused our team. It enthused our company on what we're hearing specific to patient treatment by the doctors. So I'll just say globally, we're most excited that we're seeing early efficacy with the drug. We are seeing efficacy at the starting dose, 5 milligrams. We're hearing that from doctors and patients. And we have yet to hear a report of an adverse event reported to the company for GI. Not to say it's not happening, but we would have anticipated to have a number of those reports if the drug was having an impact on GI as doctors are trying the drug for the first time. So those -- that global feedback enthuses the company a lot and it's above expectations so far for our leadership team and our medical team. Lauren, why don't you share one or 2 patient stories on what we're hearing, because I think that really brings this to life for the group who is listening. Lauren D’Angelo: Sure. Absolutely. And these are my favorite, too. So I've got a handful of these of examples where the reps will kind of call us and say, you're never going to believe this. So one of the more impactful stories we've heard came from a care facility that had a particularly challenging patient. The staff had come to expect daily behavioral outburst so much so that they would brace themselves every day at 3:00 p.m. when just like clockwork, this patient would actually go to the nursing station and just cause significant chaos. The resident was described as very unpleasant, was known for throwing her phone at the staff and other residents and the family had even stopped visiting due to the difficulty of her condition. Now the physician was initially skeptical of yet another Alzheimer's treatment that sounded too good to be true. So he wanted to try our product, ZUNVEYL on his most challenging patient. Shortly after starting ZUNVEYL, 1 day, the nurses waited for the usual 3:00 p.m. incident, but it never came. So they looked at each other wondering what was going on, and they actually became pretty concerned. And so they went looking for her in the home and eventually found this patient calmly engaged in conversation with another resident at a table. It was the first time in over a year she had shown that kind of connection or calm. Since then, the facility has shared with us, they've reduced her use of Ativan and even reached out to her family, encouraging them to visit again. So this is a really impactful story. Obviously, it's illustrative. It was a story shared with us. We recognize ZUNVEYL is not indicated for agitation, but just really wanted to share this, because now this facility is so bought in that they're obviously placing more orders. Another patient was previously on donepezil and trazodone, which is an antidepressant often used for sleep in the nursing home. She was frequently up at night, ringing her call bell, and then she would wander the halls during the day in this days kind of -- they described it as zombie-like state. After transitioning to ZUNVEYL and discontinuing donepezil treatment, the patient sleeping through the night for the first time in years. And of course, this has impacted her ability to engage throughout the day. The beautiful part of this is for family members have noticed a significant change and have actually told the staff that she has to stay on ZUNVEYL no matter what. So here's just 2 examples. I have so many more. They give me the chills, but these are the kind of stories that we're hearing from the field. And of course, we expect that with more examples like these, it will create advocates for ZUNVEYL. We'll see a lot of pushback on the insurance plans and the prior authorizations, and this is kind of how it gets started. This is -- these types of early experiences is really what will get us moving and the momentum that we'll continue to see.

Okay. That's wonderful. That's really heartwarming actually. I'm now curious -- I mean, like all this early feedback and all the information that you'll get over time, do you anticipate collating this like into a peer-viewed publication? Like do you intend to do sort of real-world evidence trials or sort of thing such that this evidence can be published in a single place, like demonstrating this true to world information around how this drug is working.

Michael, it's a great question. Our medical team is very active right now in executing medical strategy. to communicate the information, both that we're seeing in the market and that we're seeing on drug. So we've submitted multiple abstracts. They've been accepted for AAIC. We have more abstracts that have been submitted. We expect acceptance of those in other long-term care medical meetings. So -- but that's just the start. Toward the end of the year, we anticipate completing a retrospective data analysis that will give us insight into how ZUNVEYL is being used in the nursing home, the types of patients it's being used for. And we believe some of the benefits that it demonstrates in both sleep in the absence of GI side effects. And certainly, last but not least, in the behaviors that these patients suffer from. So I think there'll be additional data the latter part of this year that we will have completed. We'll submit that for publication. Additionally, there are physicians already that are telling us they want to submit case reports, because some of the responses that they are seeing from their patient cohort, they feel like it's worthy of putting into the literature. So we'll stay tuned for that type of information to be submitted to journals as well.

Wonderful. Okay. I look forward to that. Last question is on money. So I mean this is a relatively soon after your last update. But wondering how you're feeling about your balance sheet and being able to deliver your full long-term care rollout? And how are you thinking about the cash you have bringing the company to potentially breakeven?

Henry, you want to take that question?

Sure, Michael. Thank you. So we're very comfortable with our balance sheet. We're glad to report that we are debt free. So we don't have any kind of interest payments to make and worry about. We're encouraged by ourselves. So we do feel very comfortable that we can still continue to fund our operations and our commercialization without having to raise any money at the moment.

The next question is from Dave Storms from Stonegate.

Congrats on all the success so far. Just want to start -- I thought I caught on the prepared remarks that you've targeted about of your Tier 1 LTC targets. When we think about patient penetration among those, does Alpha Cognition anticipate -- like what kind of long -- excuse me, what kind of penetration do you anticipate in those facilities during this first year? Lauren D’Angelo: Yes. And so the simplest way to describe that is if you think about any given home across the country, obviously, specific to the territories we're marketing, about 7 out of 10 patients have Alzheimer's disease. And if you think about -- and there's a high treatment rate along after your Alzheimer's diagnosis. So if you've got 100 patients in a home, 70 patients have Alzheimer's disease. And what we know, and especially as we're learning, as we've just launched this product, about half of those patients are not on any treatment, they've already tried a generic in the past and failed, couldn't tolerate it, for whatever reason couldn't get the efficacy, probably due to the tolerability, half of those patients are not on drug. The other half of those patients we know are currently on medicine, and we know that more than half of those patients are going to drop off by the end of the year. Now as we get out there and we communicate this ZUNVEYL story, physicians are seeing us used in both of those patient types. They're looking at the patients who have tried and failed aren't on treatment today, perfect candidate for ZUNVEYL, but they're also looking at the patients who even -- are currently on drugs trying to tolerate it, know they're going to drop off and they're switching them to ZUNVEYL. So we see a pretty deep penetration, as you can imagine, and a significant portion of that 70 patients who have Alzheimer's disease will eventually be a candidate for a drug either by the time they drop off or more than half of them have already dropped off in our candidates. Does that help?

That's incredibly helpful. And just with that given penetration and noting that you've hired a full commercial field team launched ZUNVEYL nationwide. Do you believe the current sales force and infrastructure is sufficient to scale with that market? Or how should we think about that? Lauren D’Angelo: Yes. So right now -- go ahead, Michael, do you want to answer?

Yes. I'll just say we feel like we have 80% coverage with our current territory alignment with the current sales team that we have. We're always analyzing the market and looking at the response to the market of our promotion. And we could see small single-digit increases in that sales force to further penetrate some markets that are opportunistic, but it won't be a meaningful impact to our spend over the course of 2025.

Understood. Very helpful. And then just kind of drilling in a little further. Net revenue for Q1, you mentioned was $347,000 following this March launch. How should we interpret that figure in terms of initial stocking versus maybe the underlying demand? Lauren D’Angelo: Sure. That's a great question. So when we -- prior to launch, we did minimal stocking across the wholesalers. We are very unlike other companies. I've been at those companies. I've stocked a ton, right? You stock 2 months, 3 months of inventory, and it takes you quite a bit of time to get through the inventory. We did not go that route. We stocked minimally at all of our major distribution centers that were surrounded by our sales rep. The good news and what I can confidently say, we stock both 5 milligrams and 10 milligrams. We have already depleted all of our 5 milligrams. As you can imagine, drug could get written April 1, May 1, they're titrating up to the 10 milligrams. So we are almost completely -- we are completely depleted through our 5-milligram -- our initial stocking. Those have already been reordered. Many of those are being reordered and they have been reordered over the past month. And then the 10 milligram, we're almost completely through that initial stocking as well. So -- and we continue to see orders from the wholesalers every day. So it's looking very good. But I can confidently say we've already depleted our initial stocking for the 5s, and we're almost there for the 10s because we've got to kind of get through the rest of the month that would be the titrated patients from April.

Understood. Very helpful. One last one for me, if I could. Just zooming out a little bit and thinking about maybe some recent U.S. policy developments. Are you concerned with any impact to the long-term pricing power or formula dynamics in Medicare Advantage and other long-term care plans?

No, I think we expect to see -- in the U.S. market, we expect to see consistency, at least in the Alzheimer's category. I think from a general -- I'll take a step even further back from a general pricing pressure issue for pharmaceutical companies. There's been a lot of talk about tariffs this year. We manufacture our product in the U.S. So there's no impact from tariffs to our company. We secure our API outside the U.S., but it's a small percentage of total product cost. So we don't anticipate our gross margin will be impacted by any tariffs that the U.S. chooses to put in place. On the reference pricing, we -- there's a lot of noise this week from the Trump administration regarding reference pricing, but this has already been put forward in 2021, it was struck down by the court. We don't have the details of this round to see how it's different or the same, but we feel that we're taking a wait-and-see approach. We'll watch to see if there are any additional changes that occur, and we're already prepared to act if we felt like that would impact our U.S. pricing. But from a Medicare standpoint, we anticipate business as we see it today for the remainder of this year, even into next year because that process is already underway for 2026.

There are no further questions at this time. I would like to turn the floor back over to Michael McFadden for closing comments.

Thank you, operator, and thanks, everyone, for joining us today. I think you hear the excitement of the team about our commercial launch of ZUNVEYL. I'll reiterate, we will be focused this quarter on our selling efforts. We'll continue to watch our spending to make sure we're spending on the right things, and we're exercising financial discipline. And then we'll continue to progress our medical plans to share more information about ZUNVEYL in the U.S. market and also our ex U.S. operational execution to make sure that we take a full advantage of our Asia partnership. Thanks again for attending. Everyone, have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.