Yet another Pittsburgh company is set to go public. But this time, it’s a small life sciences firm.
On Monday, drug discovery company Cognition Therapeutics launched its initial public offering, which it announced and filed for at the end of July. The company will be listed under the ticker CGTX on the Nasdaq. The IPO will issue 3.35 million shares of common stock with a price expected to be between $11 and $13 per share. The expected $40 million raise is down from the company’s original announcement of a planned $50 million.
Cognition’s headquarters are in Purchase, New York, while its 6,000 square feet of lab space are in Pittsburgh’s South Side. Of 20 full-time employees and two part-timers listed in the filing, 10 worked at the Pittsburgh location as of March 2021. (Notably, Cognition is hiring for multiple roles.)
Founded in 2007, the biotech company primarily focuses on development of therapies for central nervous system diseases. The lead product, CT1812, is an oral treatment for mild to moderate cases of Alzheimer’s disease and is in Phase II trials as of the S-1 filing.
As is typical for young life sciences companies, Cognition has reported no revenue so far. It shared that as of June 30, 2021, the company has $11.3 million in cash with liabilities totaling $16.2 million. Cognition received a little over $168 million in non-dilutive grants from the National Institute of Aging at the NIH, which went toward clinical trials. CEO Lisa Ricciardi joined Cognition in March 2019, following her CEO role at Cambridge-based medical device startup Suono Bio.
This IPO will help Cognition advance its technology in a field where larger pharmaceutical companies have struggled. Plus, Alzheimer’s treatments have faced increased scrutiny recently in the wake of the FDA’s questionable approvable of a Biogen treatment this summer. Nonetheless, competition from other pharmaceutical heavyweights like AstraZeneca, Eli Lilly, Johnson and Johnson and more remains.
In its initial filing, Cognition shared that proceeds from the IPO will go toward planned Phase II trials of its lead product for mild to moderate Alzheimer’s disease, as well as Phase II trials for a second indication of dry macular degeneration, an eye disease that can lead to vision loss. Final data for the Alzheimer’s product is expected in 2023. New funding from the IPO will also go toward the company’s new drug investigation initiative, looking for compounds to potentially treat other neurodegenerative diseases like Parkinson’s.
Though Cognition Therapeutics is still a small company, the filing states that employees have equity-based compensation plans, including stock options. That means those 10 employees who work at the Pittsburgh laboratory will likely see some wealth generation from the offering. The company will probably expand its laboratory presence, too, as the larger clinical trials commence, meaning a potential for new life sciences jobs here as well.
Any IPO, no matter the size of the company or raise, adds to the momentum sparked this summer by Duolingo’s massive offering, which gave the company a market capitalization of $5 billion on its first day. The autonomous vehicle sector has seen its own slew of planned public offerings, including Aurora’s SPAC deal with Reinvent Technology Partners Y, or Argo AI’s plan to go public this quarter after announcing major partnerships with Lyft and Walmart. Stronghold Digital Mining, an alternative energy-powered bitcoin mining company, also filed its S-1 to go public earlier this summer, and is expected to fully launch its own offering soon.
All of these moves add new wealth that can potentially feed back into the tech workforce as funding for startups. But more than these other offerings, Cognition’s will add to a push to get Pittsburgh life sciences on the map. With healthcare giants, hospital systems, research universities and a prominent medical school all here, there’s long been discussion of how to translate that expertise into commercial opportunities, much like Pittsburgh has done for robotics and autonomy. Cognition’s offering could be the spark that lights the fire.
Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments. -30-