It is my pleasure to introduce the next company, which is CervoMed. CervoMed is traded on the Nasdaq under the ticker symbol CRVO. We covered CervoMed with a buy rating and 12-month price target of $25 per share. It is a pleasure for me to introduce CervoMed's Chief Executive Officer, John Alam. John, it's a pleasure for us to have you with us.
It's a pleasure for me to be here. Thank you for having us, and thank you to everyone who's listening in.
John, I think it would perhaps be best for the benefit of our institutional audience, some of whose members may not be so familiar with CervoMed, if you could just give us a brief overview of the company, and in particular, the lead clinical stage asset, neflamapimod, and its applicability across multiple neurodegenerative neurological conditions, but in particular, dementia with Lewy bodies or DLB.
Okay. Happy to do so. It'll be very quick. These are our forward-looking statements. We are a clinical stage company based in Boston, publicly traded. Our lead asset, we're developing an oral drug, neflamapimod, which is a late-stage clinical asset being developed in a range of neurological disorders, but in particular, in dementia with Lewy bodies, where we have positive phase IIa and phase IIb clinical data, and are positioned to move into phase III with financing. We have an agreed-upon phase III trial design that we have agreed upon with the FDA, the European Medicines Agency, as well as the MHRA in the U.K. Dementia with Lewy bodies is a very significant medical indication. It's the second most common chronic neurodegenerative disorder. Chronic neurodegenerative dementia after Alzheimer's disease, third most common chronic neurodegenerative disease after AD and PD. High-end medical need, no approved therapies.
From a therapeutic standpoint, or really from a development standpoint, we are the furthest advanced in development. We're really the leader in terms of developing a therapy in the DLB indication. I know we're going to talk a lot more through the fireside chat about that, I won't go more about that. What I will just say before we jump into the questions that you had forwarded on, Ram, is we did have an important announcement yesterday. We closed a private placement where we raised upfront $10.5 million. Importantly, that extends our cash runway into the second quarter of 2027. This was led by leading institutional healthcare investors, but very importantly, was substantially supported by insiders, including the chair of our board, myself, and another prominent member of our board.
Important about this extension of the runway is that what it does, it finances out into the second quarter. Within that, we have additional clinical catalysts. In particular, we believe a very important one that could be a significant catalyst is both a biomarker and a clinical endpoint data result in a subtype of frontotemporal dementias called non-fluent primary progressive aphasia, PPA. About 15,000 patients in the U.S. alone. Our drug mechanism actually targets very, and has been validated very specifically in this type of FTD subtype, the ones that are driven by tau pathology. We just, this week, even as we speak, are completing enrollment. It's actually gone better than we had anticipated upfront, and we've been able to enroll a very robust group number in a rare disease.
I think are well set up to get a readout on a biomarker, which would be neurofilament light chain in this context. We also, with that extension of the runway, we have started a study in ALS, which through the EXPERTS-ALS platform, which is a rolling program in a phase II study in ALS set up in the U.K. They actually came to us because of our mechanism and some recent publications that really make our mechanism, again, a very specific targeted approach for ALS. We are on track to start by the end of the year. We've made a decision in terms of dosing. We'll go forward with the same dosing regimen that we would use at the 50 mg TID. It's a higher dose level than we have used before, but in the phase III in DLB.
There are a number of data presentations, in particular, the latter two, the FTD and CTAD meeting in the fall. It's pending, of course, abstract submission and acceptance. Could be natural places where we would present the initial data, the biomarker data, out of the PPA study. Otherwise, in DLB Again, we're very well situated to go forward into phase III. We're the only drug that has all the data and agreements with the regulatory authorities, and again, proof of principle clinical data that shows clinical activity in DLB, again, targeted therapy in that context as well, which we will sure talk about of why DLB and why this drug. Our goal is to establish a partnership to finance the clinical study. Once we start the study, data readout would be approximately two years from now.
In focusing on the strategic partnership and extending the cash runway, intrinsically, the partnership itself is a potential catalyst for stockholders today in the business. With funding through a partnership, what it does is it does minimize the dilution and actually brings in being funded to be able to go forward in DLB in phase III. The value of that, which is intrinsically value-creating, more of that goes to the shareholder, in the context of doing a strategic partnership. We think otherwise, the data set that we have, non-clinical data, CMC data, pharmacology data, animal data, and mechanistic rationale, combined with the clinical data, is a very strong package for a pharmaceutical company, mid-size into large pharmaceutical companies, in a very significant medical indication from a commercial standpoint.
This is where we're going to commit our internal resources on the business side, otherwise continue to move through the clinical program. That's the big introduction, I know, and the background, I think with the extension of the cash runway, the important point is that it actually does bring in these catalysts on the clinical side, again, the strategic partner itself well within the runway.
Maybe that's an appropriate and logical place to start. When you think about the strategic orientation of the company at this juncture, my recollection is that the company had always previously indicated that partnership was a meaningful part of the overall strategic outlook, and that the company would want to have a partner on board to optimize the value of neflamapimod long term. At this stage, would it be appropriate and accurate to say that you would not start the phase III in DLB without having a partner on board, and that ultimately the scope of the partnership that you envisage in order to optimize the value of neflamapimod would not solely focus on DLB, but would also extend to the other neurological conditions in which neflamapimod might be applicable?
You're correct. The strategic partnership in terms of advancing into DLB or advancing the program has absolutely been always on the table. Our challenge has been that for a pharmaceutical company, what they need that much more than perhaps a investor is to go into phase III. They need all the boxes checked. That's CMC, non-clinical. There's a range of things that you really need to go into phase III that an investor may not focus on, but a strategic partner, a pharmaceutical company absolutely would have. All of those things have been in the work. It has all come together. You know some of this. The CMC reformulation going to the 50 mg dose, which we announced in February and early March. We've now made the drug batch. It's released. We've completed all the analytical work. Those are kind of things you need.
We've actually completed very recently a repeat of some further work in the long-term non-rodent toxicology studies, which actually increases our no adverse effect margin threefold. We now have a thirtyfold margin relative to the doses we're operating at in the clinic out of the long-term toxicology studies. Those are the kind of things that we needed. That's why now is the time to focus on the strategic partnership. Yes, with putting that in as a requirement and our primary focus, it shifts out in terms of. Yes, we will need that partnership in place to start the study, and I can't give you more information at this point in terms of timing to do that, and that's why in our release, we don't have, at this point, a specific timing for the start of phase III, because it does depend on the start of that.
We believe that in the long run, in terms of having a partnership, there are opportunities to catch up as needed. In the long run, the drug is going to be better served, because what it does is inherently in that partnership that we can do parallel activities that you need to do to phase III to do with NDA that perhaps in a going purely equity financing, you would not be able to do. We do believe that overall, for the clinical program, in DLB, we're in a better position to go at this point with the data set that we have to go to and put a partnership in place. In terms of what it looks like relative to the other indications, I wouldn't presuppose that as to where we end up at.
I think it's on the table, but equally what is a potential. In our pipeline slide, it showed you there's a line below of a different crystal form of neflamapimod that we could advance. We have data on that now. Certainly in animals, the pharmacokinetic profile is very different. It could not be interchanged with the drug product that we have today. There are opportunities to structure that differently, to price indications differently, and who moves that forward may be different. It could even be outside of an agreement, but these are parts of conversations that would be part of. Part of the reason why we call it a strategic partnership rather than a straight licensing is there are different optionalities you can build into that in our press release yesterday.
Got it. Turning now to the neflamapimod clinical development and registrational path, I think this is important to frame for our audience before we get into the discussion of the specific mechanism and the clinical data that's already been generated. You've met recently with the FDA. You've obtained very clear feedback from the FDA regarding the scope and nature of the registrational path, specifically in DLB. What can you tell us about the scope and size of that phase III program? Clearly, of course, the most noteworthy aspect of this would be the primary efficacy outcome measure and why that is likely to be the most appropriate approach in the DLB context, as well as any other secondary endpoints that you think would be pertinent to mention at this point, as well as the patient stratification approach that you are looking to take.
Of course, we'll come back to that in the context of discussion of the phase II proof of concept data from RewinD-LB and other studies. Just wanted to see if you could set the stage for us with respect to where you are in terms of registrational pathway, prior discussion, and clarity from regulators, and how this feeds into the overall pathophysiology of the disease itself.
That's right. Again, this comes back to again of why now is a great time to be talking to potential pharmaceutical partners. This has always been for their whole investment strategy in this context is about, the first question we were getting, certainly all the way through to once we had the feedback was always, "Do you have a path?" It's a very different discussion with the positive trial results, and the most important part of that is exactly what you mentioned, the primary endpoint. In a context where there are no approved therapies, there's not a guidance document, there's not a precedent for what would suffice to demonstrate efficacy in DLB, in dementia with Lewy bodies.
Having the agreements with the FDA, with MHRA in the U.K., with EMA, the European Medicines Agency, was very much a focus going into the end of last year, going into the beginning part of this year. We have all of that in place. We're getting feedback from Japan as well. What is crystal clear at this point is that the CDR Sum of Boxes, the Clinical Dementia Rating Sum of Boxes, which has been the primary endpoint more and more in the Alzheimer's disease context, is accepted as an approval endpoint in DLB. From a clinical standpoint, it actually is the endpoint that works the best to capture clinical progression in DLB, that much more so in DLB compared to AD.
The nature of the deficits in DLB, which often has both a cognitive component as well as a motor component, reads into the functional component very nicely, actually more so than in AD That cognitive testing otherwise doesn't pick up. Our cognitive tests for where the dementia of DLB is, which is around executive function, are not great. It actually is covered by the judgment and reasoning component within CDR Sum of Boxes than a lot of the cognitive testing. All of that actually was, I think, very directly endorsed and agreed upon by the regulatory authorities. Then otherwise, the trial is a 300-patient trial, 150 patients per arm. We have actually greater than 95% statistical power to demonstrate the effect on the primary endpoint, which is change in CDR Sum of Boxes.
It's a single phase III trial, again, part of what we put down as a proposal and have an agreed-upon pathway in terms of the registration path. From a dollar standpoint, it's roughly $50 million- $60 million. In the end, it's not Alzheimer's disease. It's not a cast of 1,000. It's not 18 months that a lot takes you three to four years to run. This is two years from start of study to getting a top-line result, which is again, all of which can work very well in terms of a strategic partnership. The risk-reward equation is actually very good here, particularly when you think about the commercial opportunity here. In the population we're targeting, which has a personalized medicine component to it, we're targeting pure DLB.
We use a blood test to exclude patients who have Alzheimer's disease pathology on top of having dementia with Lewy bodies. That gives us even a better outcome. It's going to give us pricing leverage in the long run. It's where the world is moving to in every disease indication. Give us a best benefit-risk ratio and the best return on investment from a payer standpoint. That's what inherently our design does. With that, even in that, if you want to call it a subset, it's 175,000 patients in the U.S., similar number in Europe, close to that in Japan, because Japan actually has a higher incidence and prevalence rate. When you look at the prices for specialty diseases, this is neurology managed, you're looking at $5 billion+ drug. Again, with limited competition.
We're very confident that that's the kind of risk-return in an overall portfolio management for a pharmaceutical company could work very well. That's why, again, our focus is on the strategic partnership to finance and move the drug forward.
In summary, first and foremost, I think it's important to note that you already have feedback from the FDA that a single registrational study would suffice to support potential approval in the DLB indication. Secondly, as you just mentioned, this is an area that is bereft of competitive approaches. You are effectively the only program moving forward into pivotal development in DLB with the primary endpoint of CDR Sum of Boxes that would ultimately allow you to eke out effectively a commanding niche, assuming success in phase III. This is an area where there are no currently approved pharmacological interventions of any note. Certainly, we can talk about off-label prescription of existing drugs to treat DLB patients, but as of right now, there are no drugs specifically indicated for treatment of the disease.
I think it's worthwhile to switch now to looking at the mechanism of action of neflamapimod, the clinical proof of concept data that's already been generated. In particular, also the way in which that data relates directly to what you have historically seen on biomarkers, as well as impact on cholinergic neuron degeneration in the basal forebrain, which is a key component of DLB pathophysiology. Maybe we can just sort of step through that gradually.
Firstly, maybe just summarize for us the data that so far has been generated in favor of neflamapimod on the CDR Sum of Boxes primary outcome measure, which is the key endpoint in the planned and envisaged phase III registrational program. Then talk a little bit about, you had mentioned earlier patient stratification in order to exclude patients with Alzheimer's disease co-pathology, and the use of this blood test that focuses on phosphorylated tau at a specific residue. Then maybe we can talk, if we have time, about the impact of neflamapimod treatment on cholinergic neuron degeneration of the basal forebrain, and why that is so important, specifically in DLB, and how that correlates directly to aiming at the disease where the most significant damage to the brain occurs.
Great. If I may, I may actually do the opposite, follow the last part, but I'll be very brief. It is that what the science has come to in DLB within the last two to three years is a very clear understanding of what the disease is in terms of maybe even in certain, you can call it the cause, but what is what, why do patients have dementia, why do patients have the motor deficits, et cetera. It is that it is neuroinflammation, it's age-related inflammation driving exactly what you said, which is dysfunction and then degeneration in a very specific part of the brain called the basal forebrain, and on cholinergic neuronal function, which then is linked directly to, in the DLB population, every dementia with DLB patient has cholinergic deficits. It's the reason why they have their executive function deficits, their dementia.
It's the reason why they have their gait problems, motor deficits, et cetera. It's driven by that inflammation impacting that. Our drug blocks inflammation signaling, in particular interleukin-1 beta signaling, and effects of that on those cholinergic neurons. We presented, actually, even at AD/PD meeting in March, our in vitro data on that, blocking interleukin-1 beta signaling. That translates into direct effects on downstream markers in spinal fluid of interleukin-1 beta signaling. We presented that. We have that. It's a very potent blocker of interleukin-1 beta signaling, both in vitro and in patients. We've demonstrated that. That then translates in the data that we presented at the American Academy of Neurology in April directly into an effect that you can measure by MRI on the basal forebrain. On those cholinergic neurons, we actually see a stabilization and an increase in the volume.
We reverse some of the pathologic changes that you see by MRI. It's direct evidence all the way through that the drug acts on interleukin-1 beta signaling on neuroinflammation and its effect on the cholinergic system that translates into that clinical effect, that biomarker effect, and that then is directly linked to, in the data, if you can do functional MRI to look at function of the cholinergic system, that correlates with the effect on CDR Sum of Boxes. The clinical data just follows directly from that. We now have both phase IIa and phase IIb data, at very specific dose levels. If we achieve that, we get improvement on CDR Sum of Boxes and worsening over time on CDR Sum of Boxes relative to placebo.
Two different studies, in particular, the patients who don't have AD co-pathology, and the reason for that is those patients, their disease, their symptoms are all driven by the basal forebrain cholinergic deficit. It's another way of, it's kind of running the experiment of, is this how the drug is working? Is it on the basal forebrain cholinergic system? If that is the hypothesis, it should work on the DLB patients and not with the patients who also have, or less so, certainly, with the patients with AD, because their disease expression and their symptoms are as much about the hippocampus and perhaps even more so than it is with the cholinergic system, with the basal forebrain cholinergic system. It's all very internally consistent, and externally consistent with the science that's out there.
All together, it makes the case that, again, very specific mechanism, targeted mechanism for the biology and what patients with DLB need that then is translating into the clinical result that they're looking for. DLB patients, as you mentioned, the symptomatic therapies that work in AD initially work quite well in DLB, actually better in DLB than in AD, because that is their disease, cholinergic deficit, and that's what the cholinesterase inhibitors work on. You're not stopping what's happening inside the neuron. The disease continues to progress. It gets worse. Inherently, cholinesterase inhibitors can only do so much because they're only compensating from outside the cell. That's what our drug does. We show that directly through MRI, and then in the end, we're showing that directly with the clinical data. It's very exciting.
We think it can be enormously beneficial for, it's showing potential for patients with DLB, and I think we're going to be able to confirm that and show that directly in phase III, and then ultimately get this drug to the patients. Still have work to do, but we're very well positioned for success in that phase III trial.
Unfortunately, I think we're basically out of time. I want to recapitulate a few key elements for our audience. First and foremost, the nature of the high unmet medical need. Secondly, the abbreviated path to market. Thirdly, the key mechanistic underpinnings of the neflamapimod program and the fact that it engages not only neuroinflammation, which has been implicated in a wide array of different neurodegenerative conditions, but also the key cholinergic neuron deficits in the basal forebrain that underlie DLB specifically. The fact that this is a competitively privileged program, the fact that the other disease indications that you mentioned earlier, John, are all areas of very high unmet medical need that lack meaningful, effective pharmacological interventions as of today. If we look at ALS, if we look at primary progressive aphasia, this is clearly the case.
We look at your work in stroke, which we didn't get a chance to touch upon today. That's also an area of key interest because there have been, what, 50 failed neuroprotectant trials in that domain. A lot of interesting stuff going on with neflamapimod. Clearly, we look forward to what will be the next, hopefully very soon, positive announcements on the partnership and phase III initiation front, and very much look forward to discussing this with you in a separate venue, hopefully one similar to this. Certainly look forward to seeing additional updates on those fronts. Want to thank our audience for their participation and their attention. Thank you, John, for being part of this conference.
Thank you, Ram, and thank you to everyone from me as well.