u/BioMedFanatic

The significant price rise in ACOG shares over the past few days is good news for shareholders who have been patiently waiting since last fall for Zunveyl’s potential to be reflected in the stock price. The hedge fund Opaleye signaled a jump in confidence in Alpha Cognition’s prospects last Friday with the purchase of a block of 152,000 shares, their largest single-day purchase since February—bringing their total to 2.9M shares, roughly 13% of issued Alpha Cognition common stock—and solidifying their position as the largest institutional holder.
 
What was particularly notable about this trade was the purchase price of the block—$6.40/share—a significant increase for Opaleye, which has spent the past five months bottom-feeding at prices between $5.40 - $5.99/share. This change in purchase price strategy likely reflects Opaleye’s expectation that 2nd quarter results will be upbeat, with positive news such as significantly increased volume of Zunveyl scripts per LTC facility, reduced payer friction or the near-term likelihood of an ex-US regulatory approval.

The price of ACOG on the Nasdaq exchange ended at $7.89 today, the highest in 9 months and up 23% from OpalEye’s block purchase price 6 days ago—indicating both OpalEye founder James Silverman’s prescience regarding Alpha Cognition and a broader market upswing of confidence in the company’s prospects.

The US patent recently awarded to Alpha Cognition for use of ALPHA-1062 to mitigate traumatic brain injury (TBI) is a major success for the company—one that may rival the clinical and commercial potential of Zunveyl.  As such, ALPHA-1062 represents a highly valuable first-in-class opportunity for the biopharmaceutical market.
 
One can access the details of the patent at the USPTO website (listed below)—and the scope of ACI’s market opportunity that is revealed in the patent writeup is quite astounding. I encourage members of this subreddit community to browse a bit among the patent details to get a sense of the drug’s potential. One can skip past the early pages of diagrams and graphs to get to the meat of the patent in the section entitled “SUMMARY OF THE INVENTION.”
 
What is surprising (and apparently originally unexpected by ACI researchers) is the speed with which ALPHA-1062 starts repairing neurons in damaged parts of the brain (within 24 hours)—and the effectiveness of this repair activity. The studies show that prompt administration of ALPHA-1062 significantly reduces both near-term motor and cognitive defects AND the pathologically phosphorylated Tau proteins that are responsible for long-term neurological deficits that can show up years later, including Chronic Traumatic Encephalopathy (CTE). The optimal duration of administration of Alpha-1062 needs further delineation in clinical studies but is anticipated to be of the order of 2 - 3 months.
 
Application via a nasal spray dispenser appears to be the preferred mode for fastest delivery of ALPHA-1062 to the brain. The patent suggests that the proposed ALPHA-1062 nasal dispensers would be kept at the ready in first-aid kits and first response equipment of emergency medical personnel. In the US alone, millions of TBI occurrences occur annually from falls, bike and motor vehicle accidents, sports injuries, military activities, etc.
 
Given the size of this commercial opportunity and the fact that there are no currently approved pharmacological therapies, one can understand why Alpha Cognition reversed its original decision to spin off this TBI initiative. Keeping the TBI project entirely in-house is a much better deal for stockholders. ACI management has estimated the market opportunity for such a drug to be $14B annually.
 
https://image-ppubs.uspto.gov/dirsearch-public/print/downloadPdf/12589099  

It turns out that the hedge fund Opaleye Management has been a significant buyer (170,000 shares) of Alpha Cognition stock over the past month.

Opaleye has been aggressively buying shares roughly every other day at prices between $5.70 and $6.00, which has been instrumental in keeping a firm floor under the stock around that price level. Opaleye is Alpha Cognition’s top institutional owner with more than 2.7 million shares under management.

What is particularly significant about Opaleye’s continuing acquisition of ACI shares is that the fund invests in clinical-stage biotech companies ONLY when they see a likely 3X - 5X return on their investment. This suggests that the fund has high confidence that the stock price will reach a range of $18- $30. The head of Opaleye, James Silverman, is a very knowledgeable and successful 30-year investor in the health care sector.

Alpha Cognition’s leading AChEI drug, Zunveyl, is FDA-approved and has 15 months of accelerating sales in the LTC sector. Zunveyl’s recent Phase IV study demonstrated that—in addition to increased cognition, minimal side effects, and elimination of insomnia—the drug greatly reduces psychotic behavior in Alzheimer’s patients. The latter effect relieves a significant staff burden for nursing homes and other LTC providers as well as for family care-givers.

It turns out that the hedge fund Opaleye Management has been a significant buyer (130,000 shares) of Alpha Cognition stock over the past 2 1/2 weeks, including the 70,000 share purchase that helped push the stock solidly above $6 on Friday.

Opaleye has been aggressively buying shares roughly every other day at prices between $5.70 and $5.90, which has been instrumental in keeping a firm floor under the stock around that price level. As of last Friday, Opaleye is Alpha Cognition’s top institutional owner with 2.7 million shares under management.

What is particularly significant about Opaleye’s continuing acquisition of ACI shares is that the fund invests in clinical-stage biotech companies ONLY when they see a likely 3X - 5X return on their investment. This suggests that the fund has high confidence that the stock price will reach a range of $17 - $30.

In addition—as Mobile-Dish has pointed out—the head of Opaleye, James Silverman, is a very knowledgeable and successful 30-year investor in the health care sector. So, for all of us impatient, long-suffering ACOG investors, the faith in Alpha Cognition that Opaleye is demonstrating is a very hopeful sign.

Maxim Group Initiates Coverage—with a Buy rating and a price target of $12. The New York firm provides equity research and financial services, focusing on under-covered, small to mid-cap public companies in the biotechnology, healthcare and retail sectors.

The analyst, Naz Rahman, has a not-so-stellar rating on TipRanks, but it is good to get a 4th firm following Alpha Cognition. Great volume and stock price rise today—very likely because of this announcement and perhaps also some Maxim client purchases.