CervoMed Inc. Reports $16.3 Million Net Loss for 2024, Driven by Increased R&D Expenses

CervoMed Inc. (formerly Diffusion Pharmaceuticals Inc.) reported a net loss of $16.3 million for the year ended December 31, 2024, compared to a net loss of $2.2 million in 2023. This significant increase is largely attributable to a rise in research and development expenses, which jumped from $8.4 million to $18.8 million, primarily due to increased costs associated with the RewinD-LB Phase 2b clinical trial for neflamapimod, its lead drug candidate for dementia with Lewy bodies (DLB). General and administrative expenses also increased, rising from $6.5 million to $9.1 million, mainly due to increased public company costs following the merger with EIP Pharma, Inc. in August 2023. Grant revenue increased from $7.1 million to $9.7 million, reflecting progress in the NIA-funded RewinD-LB trial.

The company's cash and cash equivalents, and marketable securities totaled approximately $38.9 million as of December 31, 2024, a substantial increase from the previous year. This increase is largely due to the April 2024 private placement which raised approximately $50 million in gross proceeds. The company's accumulated deficit as of December 31, 2024, was $70.7 million. The company expects to continue incurring losses and will require additional capital to fund operations and further development of neflamapimod. The company believes its current cash resources will be sufficient to fund operations for at least twelve months.

Significant developments during the year included the completion of the merger with EIP Pharma, Inc., resulting in a reverse recapitalization, and the initiation of the RewinD-LB trial. The company also announced 16-week results from the extension phase of the RewinD-LB trial in March 2025, showing statistically significant improvement (p<0.001) on the primary outcome measure compared to both the initial phase and placebo. The company plans to meet with the FDA to discuss Phase 3 plans following the release of 32-week data from the extension phase, expected in the second half of 2025. The company also plans to initiate a Phase 2 trial evaluating neflamapimod for the treatment of patients recovering from ischemic stroke in the second quarter of 2025.

CervoMed's employee count increased from eight to fifteen during the year. The company's strategy focuses on advancing neflamapimod for DLB, exploring other disease indications, and pursuing strategic collaborations to maximize the drug's potential value. The company highlighted its differentiated approach to treating DLB by focusing on patients without Alzheimer's disease co-pathology, a population representing up to 50% of diagnosed DLB patients. The company also noted that it has identified material weaknesses in its internal control over financial reporting.

The company's 10-K filing included extensive disclosures on risk factors, including those related to clinical development, regulatory approvals, intellectual property, commercialization, and financial condition. The filing also detailed the company's regulatory compliance efforts, including its compliance with the FDA's requirements and other relevant laws and regulations. The company stated that it does not anticipate paying cash dividends in the foreseeable future.