Alpha Cognition (ACOG) Q2 2026 Earnings Call Transcript

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DATE

Thursday, Aug. 13, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Interim CFO, VP Accounting and Finance - Henry Du
• Chief Executive Officer - Michael E. McFadden
• Chief Operating Officer - Lauren D'Angelo

TAKEAWAYS

• Net Product Revenue -- $6 million, representing 71% quarter-over-quarter growth compared to the first quarter of 2026.
• Total Revenue -- $6.1 million, an increase from $1.7 million in the prior year period driven primarily by ZUNVEYL product sales.
• Gross Product Margin -- 94%, calculated from $6 million in net product sales against approximately $400,000 in product costs.
• Operating Expenses -- $13.5 million, reflecting investments in commercial infrastructure, payer engagement, and evidence generation studies.
• Net Loss -- $8.8 million, or $0.40 per share, which narrowed from a net loss of $13.2 million in the second quarter of 2025.
• Cash and Cash Equivalents -- $41.4 million as of June 30, 2026, supporting the company's projected path toward operating profitability in 2027.
• Fiscal Year 2026 Operating Expense Guidance -- $50 million to $54 million, adjusted downward from the previous range of $54 million to $58 million due to improved organizational efficiency.
• Bottles Dispensed -- 8,290 bottles, an increase of 37% quarter over quarter reflecting organic clinical demand.
• HCP Riders -- 1,350 prescribers who wrote at least one ZUNVEYL prescription in the quarter, representing 27% sequential growth.
• Cumulative Riders -- 1,910 healthcare providers since launch, which management stated keeps the company on track to meet its goal of 2,000 riders by year-end 2026.
• Repeat Prescriber Rate -- 76% of second quarter riders, indicating that ZUNVEYL is moving into routine clinical practice for most prescribing physicians.
• Prescriber Productivity -- 6 prescriptions per rider, an increase that demonstrates deepening adoption among existing customers.
• Nursing Home Penetration -- 1,090 facilities with active prescriptions, representing 20% sequential growth with 346 new homes added during the quarter.
• Facility Repeat Rate -- 81%, reflecting durable adoption at the facility level consistent with trends observed in the first quarter.
• Sales Force Size -- 60 persons, which management described as the ideal customer-facing headcount for the current targeting strategy.
• Gross-to-Net (GTN) Yield -- 74%, which management expects to remain consistent through the remainder of the 2026 fiscal year.
• Galantos Pharma Settlement -- The company completed an early payment of its royalty obligation to simplify the capital structure and eliminate future royalty burdens.
• BEACON Study Results -- Top-line results demonstrated improvements in cognition, neuropsychiatric symptoms, and activities of daily living among long-term care patients.
• CONVERGE Study Timeline -- Top-line data is expected in the third quarter of 2026 to provide retrospective evidence on persistence and polypharmacy.
• RESOLVE Study Status -- Patient enrollment is underway with study completion anticipated in the second quarter of 2027.
• Sublingual Formulation Opportunity -- Targets the 10% to 20% of Alzheimer's patients who suffer from aphasia or dysphasia and have limited treatment options.
• Contracted Book of Business -- 16% of the company's total volume, which remained consistent with the previous quarter despite slower payer implementation.

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RISKS

• Lauren D'Angelo identified payer access as the primary near-term friction point, noting that "access expansion is tracking slower than the access curve we outlined last quarter."
• Michael McFadden warned that the Inflation Reduction Act is "having a significant impact on the plan and the additional cost that they have to pick up," which influences formulary discussions.

SUMMARY

Alpha Cognition Inc. (NASDAQ:ACOG) reported sequential growth in revenue and prescription volume for its Alzheimer's treatment, ZUNVEYL, during the second quarter of 2026. Management identified high repeat utilization rates at both the physician and facility levels as evidence of clinical adoption in the long-term care market. While payer formulary activation is progressing slower than previously forecasted, the company adjusted its full-year operating expense guidance downward and maintained its target for reaching operating profitability in 2027. Strategic focus remains on generating real-world evidence through clinical studies and maximizing the productivity of its 60-person field team.

• COO D'Angelo attributed the 71% sequential revenue growth to "pure commercial execution" rather than formulary tailwinds, noting that demand grew even without expanded payer access.
• CEO McFadden characterized the 76% repeat prescriber rate as "some of the highest I have seen," citing positive physician feedback regarding drug tolerability and behavioral impacts.
• Expansion into the neurology specialist and retail segments is contingent upon achieving operating profitability and securing broader payer coverage to minimize prescription abandonment.
• The company plans to use quantitative data from the CONVERGE study and qualitative data from BEACON to conduct pharmacoeconomic analyses for future payer negotiations.
• D'Angelo noted that reported "ghostwriters" in long-term care data often obscure true prescribing volume, as prescriptions may be recorded under different physician names within a facility.
• A pharmacokinetic study for the sublingual formulation is scheduled for the third quarter of 2026, with data serving as a gating item for the clinical development timeline.

INDUSTRY GLOSSARY

• ZUNVEYL: An oral acetylcholinesterase inhibitor approved for the treatment of mild-to-moderate Alzheimer's disease.
• Long-Term Care (LTC): Healthcare facilities, such as nursing homes, that provide medical and non-medical support for patients with chronic illnesses or disabilities.
• HCP Riders: Healthcare providers who have written at least one prescription for a specific medication.
• Gross-to-Net (GTN): The difference between the gross revenue of a pharmaceutical product and the net revenue after rebates, discounts, and fees.
• Aphasia/Dysphasia: Medical conditions characterized by difficulty in communicating or swallowing, respectively.
• Pharmacoeconomic Analysis: A research process that compares the value of one pharmaceutical drug or drug therapy to another in terms of cost and outcome.
• BEACON, CONVERGE, and RESOLVE: Clinical and retrospective studies designed to generate real-world evidence supporting the safety and efficacy of ZUNVEYL.

Full Conference Call Transcript

Operator: Greetings, and welcome to the AlphaCognition Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Henry Du, interim CFO, VP Accounting and Finance.

Henry Du: Thank you.

Operator: You may begin.

Henry Du: Thank you, Sachi. Good afternoon, everyone, and thank you for joining us today for AlphaCognition's Second Quarter 26 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 AlphaCognition Chief Executive Officer, Michael E. 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, management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements reflect AlphaCognition'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 noted 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 August 13, 2026. 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. AlphaCognition declines any obligation to update these forward looking statements except as required by applicable securities laws.

I will now turn the call over to Michael. Michael?

Michael E. McFadden: Thank you, Henry. Good afternoon, everyone. Welcome to today's call. The second quarter of 2026 represents another important quarter of commercialization for ZUNVEYL. The first new oral Alzheimer's treatment approved in more than 15 years. It was a strong quarter of execution, with clear sequential growth in ZUNVEYL demand, expansion and prescriber adoption, increased nursing home penetration, and continued progress with evidence generation to clinically support ZUNVEYL. We continue to execute with discipline and confidence, and I believe this quarter demonstrates that ZUNVEYL's commercial trajectory is tracking well with our expectations as we continue to scale the brand and the long term care segment.

In Q2, we generated approximately 6 million in net product revenues, representing approximately 71% quarter-over-quarter growth versus Q1 2026. While we are pleased with ZUNVEYL's trajectory, we are still in the early phases of the product's commercial phase, and remain optimistic that we will continue to see signs of sustained product performance and adoption in the long term care setting. Looking at the quarter, monthly prescription volume strengthened consistently, with high single digit sequential growth each month, All KPIs were positive, including prescriber number increases, nursing home prescriptions, and repeat prescriptions. Overall, we believe we are on track with our 2026 strategic priorities as we continue to drive prescription growth and build a durable path toward operating profitability in 2027.

Turning to our clinical and medical programs, we continue to advance our evidence generation priorities in which we believe will strengthen ZUNVEYL's positioning with both payers and health care providers over the long term. During the second quarter, the company reported positive top line results from the BEACON study, We initiated CONVERGE, a retrospective data review in long term care, and we initiated RESOLVE, with sites selected, sites activated, and initial patient enrollment underway. Of note, the BEACON study demonstrated that following initiation of ZUNVEYL, providers observed improvements in cognition. Improvements in neuropsychiatric symptoms, and improvements in activities of daily living along with reductions in polypharmacy. These are all meaningful outcomes for long term care practitioners treating patients.

With mild to moderate Alzheimer's disease. Based on these positive findings, our medical team has submitted the data for presentation at several upcoming medical meetings. We look forward to announcing additional, as presentations are accepted. and confirmed. We expect CONVERGE top-line data in Q3. We believe this will provide the company 2 nursing home datasets that can be utilized to inform stakeholders of the changes in cognition, neuropsychiatric behaviors, and ADLs they might expect to see when utilizing ZUNVEYL in the nursing home setting. Henry will provide financials in detail in a moment, and Lauren will provide a more comprehensive commercial update thereafter. But first, let me make a few high level remarks on our financial position.

Our operating spend of 13.5 million this quarter continues to reflect a deliberate investment in our commercial capabilities, and in studies that support our positioning with health care providers and payers. As I said last quarter, I want to be direct about the way we are thinking about this investment. Our net product loss this quarter reflects the company's intentional scaling. We are deploying capital against our highest return opportunities in the business, including expanding prescriber reach, building real world evidence to support ZUNVEYL, and unlocking additional payer access. These are investments that will drive the company to achieve operating profitability in 2027 and beyond, and we continue to remain on track with these targets.

I will now turn it over to Henry.

Henry Du: Thank you, Michael. Good afternoon again, everyone. As I review our second quarter 2026 financial results, please also refer to the press release and 10-Q to be filed this afternoon. For the second quarter of 2026, ZUNVEYL generated approximately $6 million in net product revenue compared with approximately $3.5 million in the first quarter. Representing approximately a 71% sequential growth quarter-over-quarter. Total revenue for the quarter was 6.1 million compared to $1.7 million in the prior year period driven primarily by ZUNVEYL product sales. From a margin perspective, GAAP gross product margin was approximately 94% for the second quarter. Based on net product sales of $6 million and cost of product sales of approximately $400 thousand.

Regarding spending, total operating expenses for the second quarter were 13.5 million including $11.5 million of SG&A and $2 million of R&D expense. SG&A reflects continued investment behind the commercial infrastructure payer engagement, marketing resources, and public company operations. while R&D reflects continued investment in evidence generation, and development programs required to build ZUNVEYL for the long term. Net loss for the second quarter was $8.8 million or $0.40 per share, compared with a net loss of $13.2 million or $0.82 per share in the prior year period. As of June 30, 2026, the company had $41.4 million in cash and cash equivalents. And 57.9 million in total current assets.

Total current liabilities were 6.4 million resulting in working capital of approximately 51.5 million. During the quarter, we also completed the early settlement of our Galantos Pharma royalty obligation. This transaction simplifies our capital structure eliminates future royalty burden on the product economics, and increases our long term long term participation in the value created by ZUNVEYL. We believe this is a prudent use of capital a strategic step that improves the future cash flows and strengthens the economics of the franchise as the brand continues to grow. We continue to believe our current capital position together with expected future sales of ZUNVEYL and potential milestones and royalties, can support our plan towards operating profitability in 2027.

Lastly, based on the strong commercial performance of ZUNVEYL and our continued focus on operating discipline, we are lowering our full year 2026 operating expense guidance from our previous range of 54 million to $58 million. To a new range of $50 million to $54 million. While we remain committed to deploying capital to support the growth of ZUNVEYL, in advancing key evidence generation initiatives, we will identify opportunities to operate more efficiently across the organization. This revised outlook reflects our confidence in our ability to balance growth investments with prudent expense management. With that, I will now turn the call over to Lauren to discuss commercial progress. Lauren?

Lauren D'Angelo: Thank you, Henry. I am pleased to provide a detailed update on our Q2 2026 commercial performance. Building on the momentum we described last quarter, Q2 was a period of meaningful execution across prescriber adoption nursing home penetration, and payer engagement. And the data tell a compelling story of durable and accelerating commercial traction. Let me start with the headline. Q2 demand generated $6 million in net product sales, representing 71% sequential growth over Q1. That result was driven by approximately 8.29 thousand bottles up roughly 37% quarter-over-quarter. Turning to adoption.

In Q2, the commercial team reached 8.19 thousand total customers and called on 3.9 thousand prescribers, reflecting the reach of our now right-sized, approximately 60-person productive field organization and the continued refinement of our targeting approach. HCP writers, prescribers who wrote at least 1 ZUNVEYL prescription grew 27% quarter-over-quarter to 1.35 thousand and cumulative life-to-date riders reaching 1.91 thousand. This keeps us firmly on track to meet or surpass our 2026 goal of approximately 2,000 cumulative riders. As I have said in the past, depth matters as much as breadth. Of our 1.02 thousand Q2 riders, approximately 76% placed repeat prescriptions, and productivity per rider continued to climb, rising to approximately 6 prescriptions per rider.

Evidence that adoption is deepening, not just widening. That sustained repeat behavior is 1 of the strongest signals that ZUNVEYL is moving from initial trial into routine clinical practice. We see the same pattern at the facility level. Homes with ZUNVEYL prescriptions grew 20% quarter-over-quarter to 1.09 thousand including 346 new homes added during the quarter. Of homes with prescriptions, roughly 81% placed repeat orders consistent with the durable facility level adoption we described in Q1. The monthly trajectory shows how momentum built through the quarter each month delivering sequential growth with June, our strongest demand month to date. That exit velocity establishes clear momentum as we move into Q3.

Payer access remains our most significant near term opportunity and candidly, our most significant near term friction point. Implementation across the downstream plan clients in Q2 was roughly consistent with Q1. We wanna be very direct about that. The broad formulary activation we anticipated has not yet materialized at scale, and access expansion is tracking slower than the access curve we outlined last quarter. Critically, we view this as a timing dynamic, not a demand constraint. The clearest evidence is that our Q2 demand grew approximately 37% in bottles and 71% in net sales even without any expansion in payer access.

Underlying prescription growth and an 81% facility repeat rate are being driven by genuine clinical pull, not by a formulary tailwind. That means payer conversion remains almost entirely ahead of us as upside. Reinforcing that access work is our real world evidence program. Beacon, Converge, and Resolve. We expect these studies to deliver meaningful promotional value supporting peer to peer education, strengthening payer discussions, and building physician confidence around tolerability, polypharmacy management, and caregiver burden. That evidence base is already fueling our education efforts. Since March, we have conducted more than 240 peer to peer programs reaching 1.06 thousand attendees and 325 prescribers. We also maintained a strong scientific presence at key congresses, including the DONA and MPA.

Reinforcing ZUNVEYL's credibility among high value prescribers. In summary, Q2 26 reflected strong commercial execution with growing demand improving conversion, high repeat utilization, broader prescriber adoption, and deeper facility penetration. While payer access has not yet expanded, the strength of demand underscores the clinical pull behind ZUNVEYL and the opportunity ahead. As access improves, we believe we are well positioned for continued acceleration I will now hand it back to Michael for closing remarks.

Michael E. McFadden: Thank you, Lauren. Let me briefly summarize what I believe are the key takeaways from the quarter. First, ZUNVEYL's growing. We delivered approximately 71% sequential growth from Q1 to Q2, and monthly prescriptions increased from April through June. The commercial trajectory is accelerating. Secondly, adoption's deepening. We had over 1.3 thousand HCP riders, over 1 thousand repeat riders, a thousand nursing homes with prescriptions, and almost 900 homes with repeat prescriptions. Repeat utilization remains 1 of the most important indicators of good product adoption. And third, we are executing on our commercial and company strategy with discipline. Our commercial organization is in place, Our focus is on deploying capital against high return in the business.

And our evidence generation continues to advance. The company's enrolling resolve converges underway, and Beacon was completed ahead of schedule. And the company will have publications from that study to present to the medical community this fall. So we are excited about the balance of the 26 year. The foundation we built for Zumbel is strengthening Our commercial indicators are moving in the right direction. We remain focused on disciplined execution. With that, operator, we will now take questions.

Operator: Thank you. We will now be conducting a question-and-answer session. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Moment please while we pull for questions. First question is from Raghuram Selvaraju from H.C. Wainwright. Please go ahead.

Ram Selvaraju: Thanks so much for taking our questions, and congratulations on a very solid quarter. I was wondering if you could comment on the following 3 aspects. At this point in the launch. Firstly, when you look at the repeat prescribers and the percentage of repeat prescribers, that you have seen write prescriptions in multiple months. Can you give us an additional granularity on that specific element prescribing behavior, particularly what it may be that converts the repeat prescriber into not only writing more than 1 script, but sticking with the product over a lengthy period of time. And if at this point, we have enough data to indicate, you know, what the characteristics of that group of prescribers are.

Secondly, I was wondering if you could give us a sense of at this point in time, given where you are with the launch, when you believe you might expand sales and marketing outreach beyond long term care, into the specialist neurologist population. And then lastly, with respect to formulary access, I was wondering if you could elaborate a little bit further on when you anticipate that emerging as a tailwind above and beyond the pull through demand that you are seeing? Thank you.

Michael E. McFadden: Thanks, Raghuram. Very solid. Good 3 there. I will start with your first 1 around our repeat prescriber rate, what we are seeing in terms of what is causing that repeat group, to continue writing ZUNVEYL. I think it really comes down to, their experience with the drug. We have talked previously on many quarters that, you know, you start out with Brett, You call on a significant amount of physicians. Once you convince them to try the drug, it takes 2 to 3 months for them to really get that experience to monitor the 1 or 2 patients, And then, of course, you know, they will start repeating once they have experienced positive effects from ZUNVEYL.

What we are seeing is these are significant repeat rates. 76% of providers are writing again. that is some of the highest I have seen, in my experience. And we believe based on all of the feedback we have gotten from our customers, is that it is really 3 things. First, they wanna make sure this drug is tolerable because, obviously, they are experience with the generics in the decades past has not been, great as it relates to tolerability.

Once they see that ZUNVEYL is a very tolerable drug, they are then looking, obviously, at the efficacy, and they see significant cognition that core foundation of why they use these drugs in the first place, And then as we have talked about in the past, they are seeing significant benefit across the behavior So those are really the 3 things. Those are the 3 factors that are causing these physicians to write again, and that feedback is consistent across the board. As it relates to when we will step outside of long-term care and potentially go into retail or that neurology space, We are really focused right now on maximizing the long term care opportunity.

We obviously believe there is tremendous upside and opportunity in the long term care space. And as we get to operating profitability next year, that is when we would look to, you know, start evaluating whether it is time to go into the neurology space. Another key aspect of that expansion into neurology is the payer lens, which obviously goes to your next question. You do not wanna launch into retail without solid formulary coverage because you will see significant abandonment rates in the retail setting, you know, when the co pay is too high. So it is really operating profitability and payer coverage that would determine at what point in time we will expand into neurology.

And then finally, your question around payer. You know, we are, again, actively engaged with all of the key payers that really matter to the long term care business. We are having consistent conversations We are focused on increasing our demand so that, you know, we increase the likelihood that we can gain formulary coverage. What we are seeing across the board, just specifically to ZUNVEYL, really across the industry and the Medicare Part D space, is the impact of the inflation reduction act. That is having a significant impact on the plan and the additional cost that they have to pick up. So that is why, you know, we have got to continue driving demand.

We are hopeful that we will see something as we have always communicated, you know, the second half of the year But it is not a matter of if. it is a matter of when because the payers definitely recognize the demand and the growth that we are driving, and we will continue, to have those conversations to make sure that obviously, we start to obtain formulary coverage.

Ram Selvaraju: And then just very quickly, I was wondering if you could maybe provide us with your sense of when CONVERGE data becomes available to what extent that constitutes a potential game changer in trending the curve upwards as well as when you anticipate being able to provide data from, the RESOLVE study I know you have guided towards, you know, when the study would be completed, but when data would be available.

And then if you could also comment on the size of the market opportunity that you expect to be addressable with the sublingual formulation and whether you would consider the possibility of instituting a revenue guidance range for 2027 along with possibly also instituting, an expense guidance range for that year.

Michael E. McFadden: A lot to unpack there. First, I will start with Converge. So we anticipate top line data for Converge. in Q3 of 2026. The significance of CONVERGE is the quantitative retrospective data analysis on the entire Alzheimer's market. And it will provide data on persistence adherence, polypharmacy with all drugs, as well as a number of other elements like ADL improvement, tolerability, types of patients that are being profiled for each of the drugs, etcetera. That data will result in multiple publications They likely will not be public until 2027. We will begin writing, data post study and then submitting those for publication thereafter.

We also believe that with CONVERGE, quantitative data, and Beacon qualitative data, that there is an opportunity to analyze that data pharmacoeconomically which will provide additional information that we believe will be useful for payers. And decision makers that have a financial interest in how Alzheimer's drugs are used. RESOLVE, studies underway. it is recruiting to our expectations. We anticipate that study will complete. In Q2 of next year. We will have data in the summer, fall. Depending on when in Q2 the data of resolve is provided. From a sublingual perspective, we are really excited about the sublingual opportunity. We believe that the opportunity represents about 10 to 20 percent of patients with Alzheimer's disease.

The data indicates that about 10 to 20 percent of patients with Alzheimer's have either aphasia or dysphasia, meaning they cannot swallow or have difficulty swallowing. And the treatment choices for those patients currently are very limited. So we believe a sublingual has the opportunity to take significant share from existing therapies and from a patch that is often used, on the torso or the arm of these patients. Which is quite difficult and challenging to administer and for the patients to utilize that drug. We have a gating item for the sublingual product. We are running a peak compared to PK study this quarter.

We anticipate that data will be available in Q3, and that will determine timeline for clinical program for sublingual. And then for revenue guidance, currently, we have not commented on when we will provide revenue guidance. We will provide expense guidance for 2027. And we will likely do that at the very beginning of 2027 or the latter part of Q4. Thank you very much.

Operator: The next question is from David Storms from Stonegate. Please go ahead.

Nav Raman: Congrats on the quarter and the progress, and thanks for taking my questions. I just have 2 quick questions. In the quarter, did you have or see any outsized stocking or material stocking in the quarter that could have impacted sales? And also, if the, if you hear reimbursement and coverage is going slower than anticipated, what do you expect your gross to net to be by the end of the year or through the year? Thanks.

Lauren D'Angelo: Yeah. Both really good questions. So as it relates to material stock? No. We did not have a significant increase in stocking. Our pharmacy and our wholesalers are now at a point where they are purchasing on demand. So what you see this quarter is pure demand growth. And we feel very strongly about that because we can follow the trends in the data. As it relates to our reimbursement, obviously, right now, we are holding strong at about 74%. So, obviously, you know, if we do not see any significant formulary ads by the end of the year, we would stay pretty consistent.

We will pick up some of the IRA penalty, but it will stay within a pretty similar GTN by the end of the year. Thanks for taking my questions. Sure.

Operator: The next question is from Chase Nickerbacher from Craig Hallum Capital Group. Please go ahead.

Jake: Good afternoon, everyone. Thanks for taking the questions. This is Jake on for Chase. We have seen another nice month in scripts in July. Could you maybe just speak a bit to what you have seen from a demand perspective so far in the third quarter? And what level is plan pull through and payer dynamics playing a role here versus is it just commercial execution from your team?

Lauren D'Angelo: Sure. So Q2, results and demand were increasing month on month. And June was our strongest demand as of Q2. What I can tell you, I know we do not provide guidance, is that momentum has continued. In my opinion, it is all, we have had no formulary wins. Our 16% contracted open book of business is consistent. Since last quarter. So we believe that the strong demand in Q2 is pure commercial execution. We have gotten a lot smarter with targeting the right customers. We are now at the ideal 60 person customer-facing salesforce.

So we believe that is really what is driving the demand. that is why we like to say that any formulary wins that will come in the future, it is all upside for us because we have got strong growth, and we continue to have strong growth. in Q3. Thanks for that color, Lauren.

Jake: Then lastly, could you just speak to how adherence is trending now that we are more than a year into launch? How have you seen this change over time, and what do you calculate patient retention is at 6 or 12 months, however you want to present it?

Lauren D'Angelo: Sure. So we are still tracking adherence rates because long term care is a little bit different how you look at the data. So, you know, it is hard for me to give you a number in terms of the average time on drug. You know, how much is new business versus, refill business. But what we do see is patients do stay on drug longer in the long term care facility, you know, versus a retail segment, obviously, because they are, you know, they are being cared for every day. I hate to give you a number because we are still working through that adherence rate.

But what I can tell you is Q2 was driven by significant new growth as well as those refill from previous quarters. But I hopefully, in the future, I will be able to give you a more accurate number around adherence. Yeah. That would be very helpful. Thank you for taking the questions. Sure.

Operator: The next question is from David Storms from Stonegate. Please go ahead. David Storms, your line is open.

Ryan Deshner: Hi.

Michael E. McFadden: Can you hear me? Yes. We can hear you, David.

Ryan Deshner: Hi. Apologies for that. 2 quick questions for me, The first, can you comment on specific geographies or types of prescribers or really any other attributes where you are seeing the most growth this quarter? and going into next quarter? And then as you are collecting feedback from prescribers, who switch patients over to ZUNVEYL, what have the primary drivers for switching over been as of recent? And how refractory are the patients that you are putting on the drug in terms of number of therapies that they have already been on. How is that looking so far? Thanks.

Lauren D'Angelo: Sure. So as it relates to the growth across the nation for Q2, we have seen growth across every region. Where we are seeing, obviously, the largest volume is coming from those key markets that have the largest opportunity. But overall, I am pleased to say that across the country, we are seeing pretty significant growth, and there is not 1 specific area that is doing far better. than, let's say, another area of the country. I think we are finally getting to a point with our 60 person sales team, you know, where we are gaining momentum. Every region is gaining traction, so that is really exciting.

Your second question around what the feedback has been and what is causing that reason for shifting. So there is several reasons. You know, I think and we are talking to customers every day, and the feedback continues to overwhelm us. With the positive impact that ZUNVEYL is having on patients. But we see a lot of news new patients who have not been on a drug in a while because they had already failed donepezil. They already failed maybe 1 or 2 generics, and there is been no other alternative for them. So the physician is reenergized to try something else for these patients because they were not able to tolerate some of these drugs previously.

We also see a significant amount of switching. And I think some of that is due to tolerability. it is due to, you know, which obviously includes insomnia on some of the other drugs. It could be the GI issues on some of the other drugs. But also the behavioral impact. So I think physicians have started to get experience with ZUNVEYL. They are seeing a positive impact across behaviors. And so patients that are on another drug, they have seen behavioral impact with patients already on ZUNVEYL, so it is causing them to switch those patients over to ZUNVEYL just from their pure experience. With other patients.

I do not know if that answers your question, but those 2 areas are probably the biggest reasons for switch. Or to try ZUNVEYL. that is very helpful. Thanks so much.

Operator: The next question is from David Storms from Stonegate. Please go ahead.

Dave Storms: Afternoon. Thank you for taking my questions. Just wanted to start with maybe some of the prescribers that have only been 1-time prescribers thus far. Do you feel the need to maybe go back and retrace your steps there, or is there still so much runway in front of you that you are more focused on the white space there?

Lauren D'Angelo: that is a great question. So 1 of the challenges with long-term care data is we call them ghostwriters. So even though it might show in the data that they have only written 1 prescription, they have actually written more. The order was just entered under another doctor. So that is we do not have a lot of physicians who have tried 1 and dropped off, and they are not using the drug anymore. What I can tell you, though, that I think ties to your question is that we have segmented the market, and we have obviously our physicians and our writers into our first tier.

Or second tier where they have written several scripts, but they are maybe not writing it for 30% of patients. And then we have got a third tier And the good news in what we are seeing in Q2 is that every single tier is improving. So if you will remember in previous quarters, we talked a lot about those early physicians who have only tried 1 or 2, they need 2 to 3 months to get experience with the drug. We are seeing that wave of physicians now moving into significant repeat writing. And so it is kind of a constant cycle where we will continue to call on a tier 3.

They are getting that 2 to 3 months experience with the drug, they will move into the next tier. And so in every single tier, we have seen significant improvement. it is just time and experience with ZUNVEYL. And we expect that trend will continue. that is really great color. I appreciate that.

Dave Storms: And then maybe, just 1 more modeling question. With the SG&A expense guidance decreasing, is there any more you could give us there -- just maybe how sticky that might be, how much that could be applied. Into 2027, just maybe any more color there would be helpful.

Michael E. McFadden: Yeah. I can comment on that? We anticipate some consistency, David. Into 2027, but we have not finalized our 2027 numbers. We have a number of studies ongoing this year, which increase expenditures Those will be concluding in Q2 of next year. But our commercial efforts and opportunities, you know, may offset that into 2027. So I ask you to bear with the company as we finalize our 2027 budget and spending plan, and we will provide that data. But it will be in a similar range. For next year. Perfect. Okay. Thank you for taking my questions.

Operator: The next question is from William Wood from B. Riley Securities.

William Wood: Hi, thanks for taking our questions. So just a couple from us. So I was curious in terms of the patients that do not-- or come off the drug, And so on that churn where they do not continue persistence, what is the main driver for the patient to either to get off drug? Is it adverse events or just lack of efficacy? Or, you know, alternatively, what is what is driving the prescriber to stop prescribing it? And then also in terms of long-term care home base, it looks like you have got a continued very nice expansion there. But I was curious in terms of percentage of total base that you have been potentially building into.

I know it is still early times, but just curious how much of an expansion you have sort of room to grow on that sort of top line full expansion there. Thank you.

Lauren D'Angelo: Sure. Sure. Both of those are really great questions. So I can tell you that, you know, we are talking to customers daily. We are getting significant feedback. And we are following those patients that discontinue ZUNVEYL. What I can tell you, it does not mean that it is not happening. I am not speaking to the universe, but we have not had or heard a patient's especially within our data, that are coming off due to tolerability or lack of efficacy. We have actually heard the very opposite. This drug works, and this drug works really well. And I think it is the feedback has been overwhelmingly positive.

Of course, the downside of long term care is these patients are very frail. And so you will see deaths for patients. You will also see patients who leave the long term care facility, and they have a fall. So they get put into the hospital. So you might have some breakage. We will recapture those patients when they come back into the home, but the time that it looks like a discontinuance in the data when they are actually checking into the hospital.

So those are really probably the 2 biggest factors And then, of course, if there is a formulary change or we need-- the prior authorization was not completed, then our reimbursement team will follow-up and ensure that patient gets put back on the drug. So those would be the main reasons why you would see a patient come off ZUNVEYL. To your question about opportunity and our base from my perspective and the company's perspective, we have significant opportunity in long term care. If you look at the just the highest volume Alzheimer patients across the country, and you split these out into homes, there is about 5 thousand homes, right, that are at your tier 1 targets.

That provide significant opportunity, for ZUNVEYL. And then, of course, there is about 3 thousand top-tier physicians. So right now, we have got about a thousand writing. You So not only do we need to increase the depth of those providers, but we also have significant more prescribers that we need to activate. on ZUNVEYL. So from our perspective, tons of upside opportunity from a market opportunity. Got it.

William Wood: And 1 last 1, if I may. In terms of just the patients who are switching or are starting drug, do you find that you are getting more patients that are refractory to other drugs or more switchers that are actively looking for a drug, so sort of pulling from a non-drug user or a drug user. Yeah.

Lauren D'Angelo: We are seeing about 50/50. So if you look at the data, of course, in long term care, you know, there is many, many patients who have already tried these drugs. You know, these drugs have been out for decades. there is nothing available to them, so they have been off drugs for some time. So they look like a treatment-naive But they have actually tried something previously likely. So we are actually we are getting many call them treatment naive, but patients who were not on drugs, but we are also seeing a significant amount of switches.

So those patients who are already either already still on it today, they are having tolerability issues, they are experiencing significant insomnia, Many of them already have behavioral issues. Those patients-- that patient profile right there is probably our highest switch because that is obviously, you know, with ZUNVEYL being core foundation and impacting all of those areas in a positive way, it is a pretty easy switch for a physician. So I would say about half of our business is coming from patients who have probably tried and failed. They are no longer on treatment right now. But the doctor has been put on ZUNVEYL. Or they are being directly switched from a generic acetylcholinesterase inhibitor.

Due to those issues that I described. Got it. Very helpful. Thank you for taking our questions, and congrats on the quarter. Thanks.

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

Michael E. McFadden: Thanks, everybody, for attending the call and those who are listening to the call. We are excited about the quarter. Feel like we had a strong quarter. Highlighted by our growth, both in bottles, prescribers, adoption, our progress in payer and evidence generation, and the focus on high target opportunities for the company that we believe will continue the growth in quarters to come. Thank you for listening to the call. If you have interest in speaking with the company further, you can reach out to our IR on our website. Thank you so much.

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

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