Alpha Cognition Inc. (ACOG) Earnings Call Transcript

Good afternoon, everyone, and welcome to today's call where we will be discussing Alpha Cognition's commercial launch strategy for ZUNVEYL, an FDA-approved treatment for mild-to-moderate Alzheimer's disease. Before we begin, please note this presentation contains certain forward-looking statements, which reflect current views and expectations of Alpha Cognition with respect to its business and future events, including statements regarding the company's commercial plans and strategies for ZUNVEYL. [Audio Gap] are based on current expectations, beliefs, assumptions, estimates and forecasts about the company's Alzheimer's disease treatment landscape and the markets in which it operates, particularly [Audio Gap] market in the U.S. and abroad. Investors are cautioned that all forward-looking statements involve risks and uncertainties. [Audio Gap] assurance that forward-looking information or the material factors or assumptions used to develop such forward-looking information is accurate. [Audio Gap] take any obligation to release publicly any updates or revisions to any voluntary statements [Audio Gap] found in the company's security filings. Now it would be my pleasure to turn the call over to Michael McFadden, Chief Executive Officer of Alpha Cognition.

Thank you, Robert. Thanks, everybody, for joining this afternoon. We're really excited to update you on Alpha Cognition's commercial progress and for -- to give you the opportunity to hear from 2 experts in the long-term care treatment arena today. I'll introduce them shortly. As a reminder for everyone, we have our approved product, ZUNVEYL. It's indicated for the treatment of mild-to-moderate Alzheimer's. So we have a broad label indication. The product was approved by FDA in July, and we plan to initiate commercialization in March of this year. The market is a large market. It's 11 million prescription market. However, this is a market that's characterized by high dissatisfaction with almost all stakeholders that treat or manage Alzheimer's disease. It's also an area that's characterized by high discontinuation. In fact, 1 out of 2 patients who take one of the agents in this therapeutic class will discontinue that drug the first year. Now we believe ZUNVEYL has been designed to minimize some of the treatment-limiting side effects that occur with other drugs. And we also know that we'll have some of the best outcomes data to you lies in our commercialization activities as we launch ZUNVEYL. Our initial launch strategy is to launch into the long-term care segment of the market. That's a $2 billion opportunity for the company, and Lauren will speak more detailed on our launch strategy and some of the tactics we plan to execute. I will update the group, though, on the overall company goals for 2025 and what we expect to accomplish the remainder of this year. First, I'll start with the commercial launch. The most important thing this company will do over the course of the next 12 months is to launch ZUNVEYL successfully into the long-term care segment. So we plan to do that with a commercial team. Lauren will speak to that, as I mentioned, in a few moments, but I'll speak to the support that undergirds that commercial team and our progress to date. The company's hired operational, legal, compliance, pharmacovigilance, safety and sales leadership roles, all of which will support our customer-facing team and the infrastructure of this launch. We've done that on time and we've done that on budget to date. Secondly, our manufacturing process is proceeding according to plan. We just had product roll off the line yesterday, and our manufacturing is going on time and also on budget to date. We plan to have product in the sales channel the third week in March. The company is also committed to manage our expenditures in 2025 very diligently to make sure that we can move this company to breakeven status in 3 years. Now you -- to have a successful launch, you have to have medical support and macro information that supports the product. And we aggressively will submit 7 abstracts and/or publications or manuscripts for publication this year, in 2025. So you'll begin to see some of the information on ZUNVEYL the latter part of this year, early next year, and that will support our launch. The company also plans to initiate one Phase IV study, which will strengthen the data set for ZUNVEYL. We'll announce more details as that study is underway. Third, from a business development standpoint, we've completed this year our first ex-U.S. deal. We completed a deal with CMS Pharma, which is a Hong Kong-based, fully integrated pharmaceutical company. They have a very strong focus on neuroscience conditions. We're excited about the deal. It provides $6 million in early-stage payments for the company. It will also provide an additional $38 million in sales and regulatory milestones as we progress the asset in Asia. The company will also receive high single-digit royalties when the product is commercialized. And we believe this not only will provide additional capital for the company, it's also going to provide additional data to support ZUNVEYL, and it provides certainly strong evidence that we can conduct deals ex-U.S. In fact, we plan to pursue an additional deal. This year, we think we can close another deal ex-U.S. before end of year, which will provide additional capital and also royalties for the company. And last, from a company focus, we plan to advance our pipeline. Let me speak to that. So we plan to use our business development dollars to advance our sublingual formulation for mild-to-moderate Alzheimer's disease. We plan to complete formulation work in 2025 and also to complete pharmacokinetic studies for that compound. The significance of this is if those pharmacokinetic studies demonstrate comparability with our intranasal formulation, we should be able to leverage already existing toxicity, pharmacokinetic, ADME and Phase I study data for that program. So we could move rapidly, assuming that data demonstrates positive results for the company. We also plan to complete an FDA meeting for our late-stage combination asset for moderate-to-severe Alzheimer's disease. The purpose of the meeting will be to align with the FDA on next steps for the program. And then we -- lastly, we plan to complete a proof-of-concept study for acute pancreatitis. If our pharmacokinetic studies are -- demonstrate good data and our proof-of-concept study data demonstrates positive endpoints, we think this could provide a path to an IND for this condition. So a lot going on with the company, but let me reiterate the most important and a key focus for the company is to have a successful commercial launch and operationalize ZUNVEYL in the commercial marketplace. Now let me introduce our speakers for the day. I'm going to introduce them all at once, and then I'll hand off to each other as the program progresses. First I'll introduce Cathy Parker. Really excited to have Cathy with us today. She's Vice President of Outcomes Centered Healthcare at Eventus. Now for those of you who don't know Eventus, it's one of the country's leading providers of in-person, value-based primary care and behavioral health services for people residing in long-term care. It's a multistate company as many employees and hundreds of nursing homes that they manage. Cathy previously served as director of value-based care for this organization. She was a Co-founder of Extended Care Specialists, one of the largest long-term care provider organizations in Indiana. She's a registered nurse, nurse practitioner, has 20 years experience both caring for patients and leading teams. We're excited to have Cathy. After she speaks, Dr. Hany Mohamed will speak. He's the Director of Clinical Services for LI Script. And he brings 20 years of experience both in pharmacy expertise retail and pharmacy expertise long-term care, so breadth of experience in pharmacy. Dr. Mohamed is Board-certified in geriatric pharmacies, Board-certified in medication therapy management. He serves as a consultant for many companies in the pharmaceutical and biopharmaceutical segment. So he has a breadth of experience that they'll be able to share both in how our product fits in the marketplace and then just the role of a consultant pharmacist and an operational pharmacy and what difference does that make for a pharmaceutical company like ours. And then lastly, many of you know Lauren D'Angelo, our COO. Lauren brings a breadth of experience in commercialization. She'll speak to the specifics of our commercialization strategy. This will be her 16th launch, by the way. She's 15 launches, 20 years' experience where I always say we're fortunate to have Lauren, one of the best marketers in the industry. She'll wrap our program. Then we'll turn it over to you for questions you may have for the group. So without further ado, let me turn it over to Cathy. Cathy?

Thank you, Michael. Well, I wanted to just start off by talking about why it matters to treat Alzheimer's disease in a nursing home and in my experience the majority of residents in nursing homes have some issues with cognition. So about 70% of the patients in long-term care have Alzheimer's disease or related dementia. And the reason they end up in the nursing home is because they have cognitive impairment, where they're not able to live at home safely, maybe they're wandering or they just need more help throughout the day with their activities of daily living, which means feeding themselves, cooking for themselves, grooming themselves, et cetera. So they end up in a long-term care setting. And really treatment of Alzheimer's dementia, there's a clinical perspective and also a business perspective that folks may not really realize, but this is a devastating disease. My own grandmother had Alzheimer's disease. And she had played the organ in our church for 50 years and lived with my grandfather. They were married over 70 years. And as her dementia progressed, she wasn't able to stay in her home safely. She was wandering at night. But this is a devastating disease where if it's not treated, the progression can be very rapid. There's a cognitive decline where memory loss is more rapid. There's increased risk of death earlier. Behavioral issues can occur. Like in my grandmother's situation, she started cursing and becoming agitated, and she was the most gentle, humble soul there ever was. A lot of these folks are wandering. Their risk of falling doubles. They have issues sometimes swallowing. They have hard time getting their words out. And just again, those activities of daily living of dressing themselves, showering themselves, feeding themselves, all those things decline. And if it's untreated, this happens at a very rapid pace, which can be very -- just very concerning and difficult for the family members as well as the patients themselves. So there's a clinical approach, but there's also a business approach. And for the buildings, the nursing homes for those folks that are -- have dementia, there are situations where they look at star ratings, where -- these are results that are published online for the public to see. And the star ratings look at basically the results of the number of wounds in a nursing home, sleep issues, the number of falls, urinary tract infections, the percentage of antipsychotic medications and then also the management of the patients of their ability to remain independent. So you may not look at it from a nursing home perspective, but if a nursing home has poor star ratings because they have bad measures in these categories, those results are published online, which can affect subsequent referrals. So there are current approaches to Alzheimer's disease management, and really, it's a team approach. We have the pharmacological aspect of it, also the psychosocial aspect of it where we look to have the social workers, the nursing staff, families, caregivers that are really kind of helping manage the disease management over the course of the disease. So really, we try to identify shared goals and try to minimize that progression and then adapt to -- as the issues of dementia progress over the years. So as someone becomes more confused or has swallowing difficulties, issues with sleep, and we personalize that treatment plan. And then oftentimes, the patient isn't able to tolerate medications that they're on, We have to adapt with our treatments to manage those side effects or adverse effects of medication. So we have several current treatment options. Right now, the first-line recommendation is acetylcholinesterase inhibitors. However, like Michael mentioned at the beginning of his part, 1 out of 2 patients can't tolerate these medications, so a very high discontinuation rate due to side effects. And as you look at this list of 4 medications, you'll see that a common theme is GI side effects. So I've seen this over and over again clinically. In fact, I had one patient who could not tolerate medications. And some of the things that happen are the folks have nausea and diarrhea, which can subsequently cause weight loss. And so I had a resident that had moved in newly to the nursing home, and they've lost over 30-some pounds in the last year. And after I was talking with the family, they gave me a history that this person had been referred to a gastroenterologist, worked up with a colonoscopy. And obviously, this person became weaker, was falling at home, still having diarrhea, and the family couldn't care for him. Well, after getting a thorough history, I realized this person was on donepezil, and it had started about a year ago. And obviously, this patient had a side effect of diarrhea. And it had gone on for over a year and caused significant weight loss. So once we ended up getting that patient off the donepezil, their diarrhea stopped, they started gaining weight again. But unfortunately, their progression with dementia did rapidly continue. Another side effect we see that's a common theme are -- is insomnia. So if you pair this with someone who's confused and wandering and up at night, it's really a recipe for disaster, have been wandering outside their home or wandering around other units and other patients' rooms in the nursing home. So that also can be troubling and concerning. It's also a side effect for the second medication list of the rivastigmine. The nice thing about this medication, even though there's moderate outcomes stated with it is that it's a patch. But oftentimes, these folks that are confused will take the patches off. So compliance, you may think a patch is -- helps with compliance, but if they're confused and they don't understand why something is on their skin, they'll pick this off. It can also cause a high rate of skin irritation. These people have very thin, fragile skin as they age. So oftentimes, we see rashes and the tolerance to this medication also is -- can be very low as well. It can still cause some GI side effects even in the patch form and again, that insomnia can also be a problem. We've got galantamine, which is once- or twice-daily dosing. This has the strongest outcomes data. But again, we run into that same thing with GI effects. And then Memantine is the last one, which is actually an add-on therapy, but it has some marginal efficacy and can cause some dizziness. So again, paired with that, with someone who's confused can increase their risk for falls. We also have to watch out for those folks with kidney issues because we have to dose adjust. So what I typically find in long-term care especially is folks come in, and they haven't been able to tolerate medications or maybe they're on a lower dose of these medications and they haven't been able to reach optimum therapy. And so we really haven't been able to maximize limiting their disease progression. So this is why I'm excited about a product like ZUNVEYL. We have talked recently about the GI side effects and how it could be limiting for patients that we're trying to slow the progression of their dementia. So now that we're going to have an option where those folks 1 out of 2 that haven't been able to tolerate it and even the ones that have tolerated it, a lot of those folks we can't get to maximum dose because of those GI side effects or the insomnia. So I'm excited about a product where really the tolerance can be greater, and it's really another tool in our toolbox to give hope to families also to patients of slowing that progression. So again, proper treatment with the less side effects, I'll be able to maximize treatment and reduce cognitive decline along with their mortality risk and minimize risk of skin breakdown. Folks have diarrhea, they're going to be more likely to have skin breakdown on their backside or be prone to urinary tract infections or dehydration and weight loss and falls. So again, from an operational standpoint from the nursing home, they're going to like this because their star ratings are going to be improved with less fall risk, less weight loss, again less wounds, all those quality measures that are built into those star ratings that are judged on by CMS. So again, I'm excited again about having minimization of those GI issues. Another aspect with the nursing home is these buildings are really working on short staff. So if you have CNAs and nurses that are trying to give meds to 40 people and you've got folks that have diarrhea, that's a lot of staff time trying to manage those folks and help them with activities of daily living. So if we can improve their diarrhea symptoms, their GI symptoms, their insomnia and also less in the risk falls and wounds, that's going to help, especially with the staff burden that they're already challenged with. So in summary, I'm excited about a new product that we're going to be able to help slow the progression with dementia. It will be proven for that and also minimize the GI side effects in insomnia, where current treatments are not helpful or have that risk for.

Thank you, Cathy, so much. So I'm going to talk a little bit about how pharmacies play role in the LTC setting. And they have 2 major roles that they play. One it can be an operational pharmacist or a vendor pharmacist, and the other one is consultation pharmacy. And before I get into their responsibilities, I just want to kind of let you know the differences between what happens in community and what happens in a long-term care facility when it comes to our residents. Remember, these residents don't have a choice of what pharmacy dispenses their meds to or what physicians kind of sees the patients. So in LTC, the operational pharmacy and the consulting pharmacy are pretty much contracted with the facilities and they have a little bit more leverage and impact in optimizing medication therapy. So in the operational pharmacy pretty much are responsible for purchasing and dispensing of the medication to our residents, doing a high clinical assessment called drug utilization reviews where they check for allergies and they check for duplicate therapies, et cetera, and resolving third-party payer insurance coverage issues and helping the facilities getting branded drugs covered, which can -- where the benefit most likely outweighs the risk for other alternative medication for that patient's condition. And on the consulting side, they do individual monthly choice and medication reviews. They also do medication therapy management, make sure the meds kind of match the diagnosis and there's -- looking for unnecessary medication or medications being used to resolve other side effects of other medications and make recommendations to ensure optimization for medication. And they also educate the interdisciplinary team at the facilities, just kind of help them with their quality assurance, quality improvement, get them ready for audits. And the main thing is ensuring medication safety and efficacy on both sides. So what's the flow? What happens when a patient gets admitted or gets readmitted to a facility? Well, on the operational side gets to see the resident first. Remember, these residents coming from the hospital, coming from the community, they actually come in with no medication. They cannot bring their medication from the hospital nor they can they bring their medication from the facility. So the vendor pharmacists have to do a very thorough analysis on duplication, drug-drug interactions and allergies and try to get coverage for a continuation of therapy. And this transition of care coming from the hospital or coming from the community causes a great disruption in assessment. We're trying to -- a lot of these hospitalizations, rehabilitations are very preventable. And of course, the elderly or the geriatric population especially are highly susceptible to these going back and forth into the hospital due to physiological factor because of their age, and the chronic comorbid conditions can result from it. On the consulting side, they have to come and review these resident charts every 30 days. It's actually federally mandated. It's a law brought down by CMS, Center of Medicare and Medicaid Services, to actually review a chart when a patient comes in with the disease and thereafter. And also it's mandated on the facility side to put protocols and regulations for that to actually happen. And what consultant pharmacists are actually looking for is drug-drug diagnosis mismatch. They're trying to reduce medication looking for unnecessary medication or medications that can actually cause cytotype, and they add on. I've seen a lot of times a patient can be continuing the most popular Alzheimer's medications called donepezil. And they -- along the lines in the facility, they develop something called insomnia, and then they add on a hypnotic. And this is where the consultant pharmacist can come in and actually recommend changing to a more safer maintenance medication for the dementia medication to not only help the resident with Alzheimer's dementia, but also discontinuing that hypnotic that might cause more risk than benefit. And also, they're more proactive in their analysis, where they're looking for potential weight gain, they're looking for increased risk of ulcers, they're looking for are the patients actually improving in their ADL, such as walking, eating, dressing, bathing. So this is all medication-related therapy that can help be approved by both entities and the recognition of expertise in the geriatric population. So we kind of leave the heavy load to -- when it comes to diagnosing assessment, obviously, to the medical staff and the nursing staff, but we definitely hold hands together. One thing I learned in pharmacy school is the provider, the pharmacist and the resident, if their collaboration is not strong, all fails. So our goal is to obviously optimize efficacy and minimize safety. And especially the consultants, when they go into the facilities, we want to make sure that administration of medication, the formulation in the medication is actually adaptable to our residents and what -- and how their conditions are presented to be. So seeing if they're taking it 1 or 2 times a day or taking with food, helping out our nursing staff because there are our eyes and ears to our residents. So Cathy kind of touched upon this, but I mean I see this very common in our facilities. Since you see the limited amount of options that us pharmacists have in recommending or continuing therapy for Alzheimer's dementia, a lot of our residents definitely have sleep disturbance and insomnia, GI side effects, well most of them, nausea and diarrhea, GI upset. And then as Cathy mentioned with the rivastigmine patches, definitely skin issues. And a lot of these residents kind of just either stop their medication. It's not effective or they're actually refusing the medication when the nursing staff is administering it to them. A lot of -- we got a lot of calls on the vendor side where the nurse has said -- where nursing are telling us, "Listen, can you tell us any other options we can give because my patient keeps refusing it, refusing the maintenance medication." And that, in turn, can obviously have a more rapid cognitive decline due to decreasing adherence and compliance. As a pharmacist, we always want to hear a medication that can help a more tolerable and increase adherence and compliance. The risk of polypharmacy, adding on a medication to treat side effects on the maintenance medication due to behavior issues. Also the risk of the need to use of restraints. That's something we don't want happening to our residents in the facilities, decreased quality of life and functional capacity. And then that can also intensify the burden of our nursing staff, who is helping us or again, our eyes and ears and telling us the symptoms and the progress of our patients. And then taking another level, the reputation of our LTC facilities when it comes to the quality metrics, which kind of affects the facility mainly because of the risk of hospitalization, rehospitalization and keeping these facilities competitive. So speaking of quality measures, about 1/3 of our long-stay quality measures are either direct/indirectly related to medication use. And like I mentioned earlier, a lot of these residents don't have a lot of choices. They're just continuing therapy and tolerating and putting other medications to subside the side effects or they're just refusing the medication or just stop taking them. So a lot of potential negative outcomes can be happening. And as you can see in the middle column here with medication-related use, especially once that are continuing therapy with the insomnia, the GI upset, the nausea, vomiting, the diarrhea. And the possible negative results that can happen from that is falls, dizziness, dehydration, weight loss. And then the facilities get stinged from -- on a quality measure side with hospital in the rates of hospitalization, rehospitalization. The rates of these patients increased risk of injury, infection and also affecting the functional daily living with walking or eating. And those are being untreated or refuse medication, they develop insomnolence, dizziness and can more -- and obviously, can have more rapid kind of decline and can develop into agitation or even psychosis. And those can increase the risk of falls and fractures and quality of life, and then it becomes as a very vicious cycle. So it is very important that we address these medication-related issues. Us as pharmacy would play a vital role, both the consultant and the vendor pharmacists in helping ensure medication optimization. So this is where ZUNVEYL may address both, the treated and the untreated. And those who are untreated may -- again, instead of those adverse events, they might stop the donepezil, rivastigmine or galantamine, but again, continuing taking extra medication they don't need because of their insomnia or the GI side effects and due to the transition of care going in and out of the hospital and those who are treated again with the sleep disturbances and the GI upset. So as a pharmacist, we're always looking for an option that can optimize medication therapy, increase efficacy, reduce minimization of side effects. And ZUNVEYL does definitely brings that option to us due to the limited option that we have, and in turn, help our nursing staff and also increase the reputation of our facility.

Thank you, Dr. Mohamed. We believe we have a next-generation best-in-class treatment option with ZUNVEYL. And as you heard from our thought leaders today, there is a significant unmet need for better treatment options that patients can tolerate. HCPs are dissatisfied, caregivers are dissatisfied and there's high, high drug dissatisfaction with this category. Now what you see on the right are the key attributes, we believe, sets ZUNVEYL apart from the current options that are available. First and foremost, our drug was perfectly designed to minimize absorption in the stomach to avoid overstimulation of the GI nervous system that could lead to less side effects. Secondly, ZUNVEYL is a proven medication. ZUNVEYL converts to active galantamine after first-pass metabolism, which allows us to claim the efficacy of galantamine, which is significant and sustained improvement in cognitive and functional performance. On top of that, galantamine is the only acetylcholinesterase inhibitor, which, of course, is our active moiety that has shown to significantly reduce the risk of developing severe dementia. And we believe that we see better efficacy with galantamine because of its dual mechanism of action. ZUNVEYL is not only an acetylcholinesterase inhibitor, it's also a nicotinic receptor modulator. So you've got 2 pathways that our drug is working on. And of course, as you heard from both of our speakers today, insomnia is a huge issue for these Alzheimer's patients. ZUNVEYL has no impact on sleep. We have 0 incidents of insomnia in our label, and there's tons of data that's been published on galantamine that shows it actually improves sleep quality. So we're bringing the established efficacy of galantamine, but we've solved this tolerability issue that's associated with the drug, and we believe that makes us a best-in-class asset in this category. Let's talk a little bit about our initial go-to-market footprint. Now our focus, as you've heard today, is on the long-term care segment. It's the largest volume. It's about 36% of the market, but it also offers us the most favorable market access conditions at launch. We know branded medications are used more commonly in the nursing home setting than they are in the retail or the outpatient setting. So this signals to us, physicians are willing to try newer and better agents for this really frail and vulnerable population. We also know that about 70% of residents in a nursing home will have access to our drug for a $0 co-pay. So our plan is to establish market leadership into the long-term care segment, which is about a $2 billion opportunity for our company. Then we'll further expand into the retail setting, focusing on neurologists which is about additional $1.5 billion opportunity that we'll have for the company. Now if you look a little bit deeper into the long-term care segment, Alzheimer's is a huge issue. It affects 7 out of 10 residents. It's the leading reason for placement into the home, and it's the leading cause of death. So you just have this huge, underserved population sitting in a really condensed market and if you think about the current dissatisfaction with current treatment options, the GI side effects, the insomnia, as you heard from our thought leaders today, this increases a lot of risk for those patients and also a ton of burden on the staff that's managing these patients. So when we put ZUNVEYL's product profile in front of those physicians who are treating these patients in the long-term care setting, 88% of them are likely to prescribe our drug. Now let's talk a little bit about how we plan to execute from a sales force perspective. So what you see on this slide are 2 maps. The one on the top left represents the Alzheimer's patients that are living in nursing homes across the country. The deeper the blue, the more patients there are that exist. The map in the middle with the highlights, that's where we plan to deploy our sales force. So as you can see, if you directly overlay these 2 maps, we are targeting the largest geographies with the highest concentration of long-term care dementia patients. Now our strategy is to bring on an experienced account-based sales team with demonstrated success in long-term care. If you've heard our story before, you know that Michael and I have been in this space for over 15 years. We've launched several drugs in this segment. We know the sales reps that we need to bring on to this team to be successful. I've got -- I can share a data point with you. We've already hired 75% of our territories. If you look at the skill set of this group of people who have already accepted our offers, they've got 10 years on average of long-term care experience, and they've got 16 years of pharmaceutical sales experience. So we are bringing on just a really talented group of people who are going to be effective from day one. We're also obviously focusing on those top plans that matter to the Med D patient population. And then we're right now developing strategic and clinical partnerships with people like Dr. Mohamed and Cathy to ensure that those patients will get access to ZUNVEYL once we hit the market. Now we've made a ton of progress over the last few months. I'm really excited about the payer work that we've completed. We're excited to announce that we've set our price at $749 per month wholesale acquisition cost. This pricing is in line with the analog and market research that we've done for branded products in the space. We've most recently talked to those top 5 plans that represent more than 3/4 of the Part D enrollees. So they're the ones that are guiding us as we set this price for ZUNVEYL. We've got a differentiated asset, and we know that there's going to be a demand for it. Now we're also on track to submit our Med D bids for 2026. And on top of that, we have identified those top pharmacies across this country who are servicing the homes that we plan to target. And we're having those conversations to ensure that once ZUNVEYL is available in the market, they're going to be willing and able to fill those orders. Now I've never been more excited about a commercial team than I am about the one we're building here at Alpha Cognition. The commercial team -- leadership team is completely filled. They're already on board. And if you look at the experience we've brought to the company, just my small leadership team alone, they're experts in their individual functional area. We've got 350 years of commercial experience, 150 years in long-term care specifically, and we've got 140 product launches under our belt. So everybody is excited. We're already working hand in hand, and we're ready -- we'll be ready to go in a few weeks when we launch ZUNVEYL. So in summary, as you've heard today, large but dissatisfied market, patients can't tolerate the current treatment options, huge market. And we believe that we are able to meet this unmet need with the differentiation and the profile that we have with ZUNVEYL. Now as Michael made very clear, we are 100% focused on this launch. We are gearing up and ready to go in a few weeks. But we also plan to complete our pipeline, get some work progressed this year. We should have our sublingual formulation complete. This will allow us to target about 20% of the population that can't swallow. I think you heard Cathy talk a little bit about this in her presentation. We'll complete our Bomb-blast study that we've done in partnership with the DOD by the end of the year. And we plan to kick off preclinical work for ALPHA-1062 in acute pancreatitis. So a lot of exciting stuff going on with the company. We really thank you for your interest today and you're interested in our story, and we're going to go ahead and open it up for questions.

[Operator Instructions] Right now, I'll kind of emcee this and then call on our respective speakers to answer questions that are suited to their area of expertise. So here's the first one. I think I'll take this one. It's what is the benefit of the sublingual or intranasal delivery mechanism? Isn't the oral preferred? You're exactly right. From a majority of patients in the Alzheimer's segment, they will use the tablet or oral formulation. In fact, this is an oral formulation market. However, 20% of Alzheimer's patients have difficulty swallowing or cannot swallow at all. And for those patients, an alternative formulation would be helpful for them. Currently, they only have a patch to utilize as an alternative formulation. We think the sublingual will be highly beneficial for that subset of patients. Here's the second question. Lauren, I might give this one to you.

Sure.

Can you review the pricing and the payments process and reimbursement and why that may or may not be important first year? That's -- I'll stop there. There's a lot more, but I'll stop there.

Sure. So the driving factor -- or one of the largest factors on why we chose long-term care is because it's not like the retail segment, where a patient goes to a CVS or a Walmart and they abandon their treatment because a prior authorization gets -- needs to get completed or their co-pay is really, really high. In the long-term care segment, about 70% of patients are dual-eligibles, meaning they're Medicaid/Medicare-eligible. So their drug is covered by Part D at a $0 co-pay. Now the way that it will typically work is a doctor will write an order, it will go to the pharmacy. There may or may not be a step edit in place, where they'll have to look to see if the patient has tried a generic. And then ultimately, the doctor signs medically necessary and the drug gets approved. It's really important to acknowledge that those patients who are in the long-term care segment have already tried, most of them have already tried one of these medications. They've already been probably 1, 2 or 3 generics. So by the time they get a prescription for ZUNVEYL, they've already checked that medical necessity box that they've had a generic, and they will get approval to our drug with or without formulary coverage. Now in the background, my team is having conversations. There are 5 payers that represent more than 75% of the market. We're having those conversations. We're negotiating now. We will be in the bid process to get on formulary, but really important to highlight that these drugs will go through with or without coverage in the long-term care setting.

So here's the question for Cathy. Cathy, I'm going to summarize the question here. A patient is currently in a nursing home. They have failed or have discontinued multiple agents, and they're currently not on any therapy. How do you think about that patient if a drug like ZUNVEYL comes to market? And what considerations would a treatment team make?

Sure. So first and foremost, like we talked about the goals. So I would involve the staff, the family and the patient if they're able to be part of the conversation. But we talk about goals and most of the time, they're going to want to slow that progression of the disease as much as they can and remain independent in whatever aspects of their care they can. So I would get a thorough history about what they've tried in the past, what their reaction was. And again, most of the time that's going to be GI or insomnia that has led to discontinuation. But then I would offer a drug like ZUNVEYL and again, kind of say that here's an option where we can help slow the progression as much as we can and help them maintain their independence.

Thank you for that. So here's a question on revenues. It's what revenues are we -- can we expect for sure? Let me just comment in general, we're not providing revenue guidance as a company. But let me comment on expectations because I think that's important in long-term care launches and for assets like ZUNVEYL. We expect this product to take a hockey-stick trajectory. So it will -- you should see modest sales first year. And then as that fourth quarter turns, you should see a sharp uptick that we anticipate will continue for the next 4 years of commercialization. Here's the why behind that because I'm often asked, why would it be slow the first year? It's an exciting product. You've got some differentiation. Why slow? Here's why: practitioners will hear about the product in the first quarter from our sales team. They will do some research. They'll do some diligence on the compound. They want to make sure what they're hearing is accurate and good for patients. And they're going to try it on 1 or 2 patients. Then they're going to monitor those patients for a window of time and determine, if they have a good experience? So did the patient respond well? Then they might try -- have some more questions about the product, engage, do some more diligence and they might try to 5 or 10 patients, a broader audience. And then they're going to look at those patients, monitor them, talk with the treatment team, determine if those patients have had good response. If that occurs, then they're thinking about, okay, where do I put this in my utilization pattern or protocol? Or how might I use this product? It seems to work really well. That process takes 9 months. So that's why we've kind of guided to set expectations on how the products are launched. We've learned and have launched multiple products in long-term care. They almost always take this trajectory. So I'll be looking for that as you're following the company. Here's a question for you, Dr. Mohamed. You've mentioned you're reviewing charts in the nursing homes. You have to do that every month. Is that a law? That's the first question. And the second is, what type of medication or medication recommendation would you make if you saw something that needed to be changed to the doctor or the treatment team or the nursing home?

Thank you, Michael. First, to answer your first part of the question is that is a law. It's actually mandated by CMS that the consultant pharmacists at the facilities upon readmission or admission and mostly thereafter to review medication charts. Also, on the facility end, they have to actually mandate policies and procedures to ensure that, so on both ends. It's very important because CMS knows that medication-related problems is a big issue, and intensive pharmacies focus can help reduce those issues. When we look at charts, our goal as pharmacist is obviously improving efficacy and obviously reducing side effects and ensuring safety. So the biggest thing to a pharmacist that makes us really, really smile is adherence, okay? We want to make sure these patients are compliant, they're adherent, they're tolerating the medication. And in turn that going to make everybody's life easier, and the most important is the resident's quality of life. Secondly, we're trying to minimize the amount of medications that residents are taking, okay, to reduce the risk of, a, drug-drug interactions; and b, side effects. And like I mentioned before, with these Alzheimer's medications that are out in the market, a lot of polypharmacy is happening. And we all know that Alzheimer's disease is a progressive neurodegenetive disease, it doesn't stop and that's why it just keeps on going. So one of the biggest thing target that we look at is reducing the insomnia medication that we use to treat insomnia, the medication we use to treat the diarrhea, the medication you're trying to treat be side effects to the GI. So this is very important to us, and it could be the cause of that medication-related problem, which is the generic options that are out there. So this is something that we always focus on and kind of pride ourselves on since we should be the medication experts. And how do we do that, Michael, is we put consultation in the charts. First, like I said, on the operational side, the nurse can call us, "Hey, listen, what other options are there? Here's a good option. Here's an available option that I might try it out to reduce -- minimize side effects. And then on the consulting side, they just put it in the EMR system, in the electronic health record. Hey -- and then the -- even the provider that's on the floor can either accept it or refuse it. And if they do refuse it, they can be ongoing discussions on, "Hey, let's talk about this patient's condition and assess the benefit versus risk of the other options." And we go from there.