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Cognito Therapeutics raises $35M for neuro device

Illustration of a brain surrounded by medical crosses and lines

Illustration: Sarah Grillo/Axios

Cognito Therapeutics, a medical device company using light and sound to treat neurodegenerative disease, raised a $35 million Series B extension.

Why it matters: Cognito bills its product as a noninvasive, less costly alternative to Alzheimer's drugs, but the company will have to prove that in the clinic.

Details: Investors include FoundersX, Morningside, Alzheimer's Drug Discovery Foundation, IAG Capital, Starbloom and WSGR.

  • The extension brings total funding to $128 million.

How it works: Cognito's headset — currently in clinical trials — emits light and sound designed to stimulate brain activity being disrupted by neurodegenerative conditions like Alzheimer's disease.

  • Patients use the headset for an hour daily at home.
  • The company expects to complete the trial of its device and submit data to the FDA by the end of next year, per STAT.

In the weeds: Cognito's experimental impact on disease progression compared favorably to existing Alzheimer's drugs Leqembi (which is on the market) and donanemab (in Phase 3 trials), according to the company.

Be smart: Cognito's success relies on clinician adoption and reimbursement from Medicare and other payers — an area that's proved difficult for other digital therapeutics companies.

  • If the company can prove its device creates cost savings in an area as tough as Alzheimer's — for instance, periodic brain imaging to check for ARIAs — it may be able to make a convincing case to insurers.

State of play: Digital therapeutics was the least-funded category in the third quarter of 2023, as slow progress toward reimbursement has blocked many of the prescription-based tools from gaining the necessary uptake. For example:

  • Akili, a Boston-based provider of digital therapeutics for ADHD, in September laid off 40% of its staff and shifted its model from a prescription basis to an OTC approach.
  • Boston-based Pear Therapeutics, which provided digital tools to treat substance use disorders and insomnia via prescription, in April filed for bankruptcy (though addiction telehealth provider PursueCare acquired Pear's addiction treatment apps last week).
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