Cognition Therapeutics Gets Positive FDA Feedback Over Phase 3 Study Of DLB Psychosis – But CGTX Stock Just Crashed 33%

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The company reported that the U.S. Food and Drug Administration aligned with the company on several key aspects of the Phase 3 study, which is expected to begin in mid-2027.

  • The trial will evaluate once-daily 100 mg oral Zervimesine against a placebo in DLB patients experiencing hallucinations and delusions over a nine-month period.
  • The company plans to present additional Phase 2 data at the Alzheimer’s Association International Conference in July.
  • CGTX stock recorded its biggest single-day drop in nearly two years.

Shares of Cognition Therapeutics (CGTX) tanked more than 33% on Wednesday, clocking their biggest single-day slide in nearly two years, as investors raised questions about the path forward for the company’s Phase 3 program targeting dementia with Lewy bodies (DLB) psychosis following a fresh regulatory update.

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FDA Alignment On Phase 3 Trial

The company reported that the U.S. Food and Drug Administration (FDA) provided favorable feedback on its planned Phase 3 program for Zervimesine in DLB psychosis. The agency aligned with the company on several key aspects of the pivotal study, which is expected to begin in mid-2027.

The trial will evaluate once-daily 100 mg oral Zervimesine against a placebo in DLB patients experiencing hallucinations and delusions over a nine-month period.

The Phase 3 trial is based on positive results from Cognition’s Phase 2 Shimmer study in patients with mild-to-moderate DLB, where the drug improved psychosis symptoms compared with placebo.

A recent analysis showed the drug slowed the progression of hallucinations and delusions by 89%. The company plans to present additional Phase 2 data on these benefits at the Alzheimer’s Association International Conference (AAIC) in July.

What Are CGTX Traders Saying?

While retail sentiment surrounding CGTX remained in the ‘extremely bullish’ territory over the past 24 hours, chatter focused on potential dilution to run the program.

One user believes the “disappointment is the timeline” as the approved trial will not start for an entire year.

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Another user said “pretty much zero catalyst the rest of the year,” while also expressing dilution concerns if the company fails to secure funding.

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As of March 31, 2026, the company had around $31.2 million in cash, cash equivalents, and restricted cash, along with $25.6 million in grants. The company believes its resources are sufficient to fund operations and capital spending through the second quarter of 2027.

CGTX shares have declined more than 22% so far this year.

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