Cognition Therapeutics Prices $30M Offering at 28.5% Discount
Clinical-stage biotech raises capital for Phase 3 trials, but new shares will significantly dilute existing stockholders.
Cognition Therapeutics (NASDAQ: CGTX) announced after the market closed on Wednesday that it will raise $30 million through a registered direct stock offering priced at a steep discount, a move that provides needed capital but will dilute current shareholders.
The clinical-stage biopharmaceutical company has entered into an agreement to sell 14.7 million shares of its common stock at approximately $2.04 per share. The price represents a 28.5% discount to the stock's closing price of $2.855 on August 27.
According to a company press release, the offering was made to two new institutional investors, including a 'preeminent global investment manager.' The sale is expected to close on or about August 29, 2025.
Cognition plans to use the net proceeds to advance its lead drug candidate, zervimesine, into Phase 3 clinical trials for neurodegenerative disorders such as Alzheimer's disease. The funds will also be allocated for working capital and general corporate purposes.
While securing financing is a critical step for clinical-stage companies facing the high cost of late-stage drug development, the offering's terms are likely to put pressure on the company's stock price. The issuance of a large number of new shares at a significant discount immediately reduces the ownership percentage of existing investors and can signal that the company needed to offer favorable terms to attract new capital.
Cognition Therapeutics focuses on developing small molecule therapeutics for age-related degenerative diseases. Its lead candidate, zervimesine, has completed Phase 2 studies for conditions including dementia with Lewy bodies and mild-to-moderate Alzheimer’s disease.
Titan Partners Group, a division of American Capital Partners, acted as the sole placement agent for the offering.