CervoMed sets up at-the-market program for up to $50,000,000 with Leerink Partners

The agreement

CervoMed Inc. (Nasdaq: CRVO) signed a sales agreement with Leerink Partners LLC on May 12, 2025. Under it, CervoMed may sell common stock with an aggregate offering price of up to $50,000,000 from time to time, with Leerink acting as sales agent. The Form 8-K filed that day says CervoMed is not obliged to sell any shares. The prospectus supplement says no minimum offering amount is required to close the offering.

The sales would be made as an "at-the-market" offering, meaning Leerink sells new shares into the market at prevailing prices when CervoMed asks it to. Sales may be made on or through The Nasdaq Capital Market, through a market maker, or in negotiated transactions if CervoMed authorizes them. Leerink will use commercially reasonable efforts to sell the shares CervoMed requests, but it is not required to sell any specific amount. The prospectus supplement says there is no escrow or trust arrangement for the funds.

Leerink's compensation is 3.0% of the aggregate gross proceeds of any shares it sells. The 8-K says Leerink will be deemed an underwriter under the Securities Act, and that its compensation will be treated as underwriting commissions or discounts. CervoMed has agreed to indemnify Leerink against certain liabilities, including those under the Securities Act and the Exchange Act.

The shares are offered under a shelf registration statement on Form S-3 that CervoMed filed on October 3, 2024 and that took effect on October 10, 2024, registration number 333-282494. The last reported sale price on May 9, 2025 was $8.49 a share. The prospectus supplement gives 8,702,719 shares outstanding as of March 31, 2025.

The advisers

Leerink Partners LLC is the sales agent. The prospectus supplement says Latham & Watkins LLP, New York, will pass on certain legal matters for the sales agent. CervoMed's own counsel is Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., which the 8-K says has issued a legal opinion on the shares sold under the agreement.

What the money is for

The prospectus supplement says CervoMed intends to use any net proceeds for research and development of its lead candidate, neflamapimod, including clinical trial activities, and for working capital, capital expenditures and general corporate purposes. Neither the 8-K nor the prospectus supplement states a cash balance. The prospectus supplement lists "our cash balances and our ability to obtain additional financing" among the risks that could make its forward-looking statements wrong, and it refers to the company's ability to continue as a going concern. It also says the auditor's report on the 2024 financial statements includes an explanatory paragraph relating to the company's ability to continue as a going concern.

The trial behind the program

Neflamapimod is an oral p38 alpha inhibitor being developed for dementia with Lewy bodies. The annual report filed March 17, 2025 describes the Phase 2b RewinD-LB trial, which enrolls 159 participants and is funded primarily by a $21.3 million grant from the National Institute on Aging. Patients with Alzheimer's co-pathology, as assessed by plasma phosphorylated tau at position 181, were excluded.

In March 2025 the company announced 16-week results from the 32-week open-label extension of that trial. Open-label means there is no placebo arm in the extension. The prospectus supplement says the company intends the trial to confirm efficacy findings from its earlier Phase 2a AscenD-LB trial, which it says showed statistically significant improvements against placebo. The extension's primary measure was change from baseline on the Clinical Dementia Rating Sum of the Boxes test, and the filing says the improvement appeared in a batch of capsules manufactured in March 2023. The filing does not give the size of that improvement.

The company's claim that neflamapimod is the only clinical drug candidate it knows of with statistically significant improvement against placebo in a Phase 2a trial rests on that earlier study. The confirming trial is still ongoing.

What comes next

Sales under the program depend on CervoMed's requests and on the share price. The company has no obligation to sell, and the agent is not required to sell any particular amount. The next test for neflamapimod is the completion of the RewinD-LB trial, which the company says is meant to confirm the Phase 2a findings.

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