Cassava Sciences’ Stock Craters After Alzheimer’s Disease Trial Fails to Meet Its Goals

A Severe Decline in Market Value

Cassava Sciences Inc.’s stock experienced a dramatic decline of **85%** on Monday, setting the stage for its most significant one-day drop to date. This plunge followed the announcement that the company’s clinical trials for a treatment targeting mild to moderate Alzheimer’s disease did not meet its primary objectives. This failure marks yet another setback for the clinical-stage biotech company, which is already under scrutiny due to investigations by both the Securities and Exchange Commission (SEC) and the Department of Justice earlier this year.

Latest Trial Results

Based in Austin, Texas, Cassava Sciences (SAVA) focuses on developing solutions for neurodegenerative diseases. The company’s recent regulatory filing revealed that it plans to present data from the failed Phase 3 trial at an upcoming medical conference. While the company hosted a conference call with analysts, it refrained from taking questions, indicating the sensitivity surrounding the topic.

The main objective of the trial was to evaluate Cassava’s novel treatment, **simufilam**, in alleviating cognitive or functional decline compared to a placebo. Unfortunately, the trial’s results indicated that at the 52-week mark, simufilam did not positively impact cognitive functionality as measured by the relevant scales, namely the **DAS-COG12** and **ADCS-ADL**. Although the treatment did reportedly maintain a favorable safety profile, the lack of significant cognitive improvement has raised concerns. CEO Rick Barry noted, “Despite our careful efforts to enroll patients with mild-to-moderate [Alzheimer’s disease], the cognitive decline seen in the placebo group appeared less severe than in previous placebo-controlled studies.” He highlighted that the team is working diligently to understand these discrepancies.

Discontinuation of the Second Phase 3 Trial

Due to the disappointing results, the company announced that it would be discontinuing a second Phase 3 trial. Detailed analyses are expected in the future as Cassava continues to navigate the implications of this setback. During the analyst call, Chief Medical Officer Jim Kupiec confirmed that the simufilam cohort exhibited a **0.39 point reduction** on the ADAS-Cog 12 scale but noted it did not achieve statistical significance (p value of **0.43**). Similarly, an overall **0.51-point increase** in the ADCS-ADL scale demonstrated a movement towards improvement but again failed to hold statistical significance.

A Hopeful Outlook Amid Setbacks

Despite the trial’s disappointing results, Barry expressed hope that the data compiled could eventually provide valuable insights to improve the lives of Alzheimer’s patients. The company remains committed to analyzing the results further and exploring what next steps could be appropriate. Financially, Chief Financial Officer Eric Schoen stated that Cassava retains a solid position, with **$149 million** in cash and cash equivalents reported at the end of the third quarter.

Ongoing Investigations and Legal Troubles

The negative news surrounding the trial isn’t Cassava’s only concern. The company has been embroiled in investigations by the SEC and Justice Department regarding past claims made about simufilam. In September, both Remi Barbier, the company’s founder and former CEO, along with former senior vice president of neuroscience Lindsay Burns, settled charges over misleading claims related to the Alzheimer’s trial for more than **$40 million**. Adding to the turmoil, Hoau-Yan Wang, a consultant for Cassava and co-developer of simufilam, has faced accusations of manipulating clinical trial results and submitting falsified information for federal grant applications.

The SEC claims Wang contributed to a breach of trial integrity that resulted in publicized fabricated results about supposed efficacy in key biomarkers associated with Alzheimer’s disease. Cassava, however, emphasized that Wang was not involved with the Phase 3 trial itself, which included **804** participants across more than **75 clinical sites** in the U.S., Canada, and Australia. Each participant was randomized to receive either **100 mg of simufilam** or a placebo.

Market Performance and Looking Ahead

In a broader context, Cassava’s stock has shown a **17.6% gain** year-to-date, while the S&P 500 has seen a **25% increase**. However, the company’s future remains uncertain as it grapples with the implications of the failed trial and ongoing legal issues.

Conclusion

The recent developments regarding Cassava Sciences underscore the volatile nature of biotech investments, particularly those focused on unproven therapies for complex diseases like Alzheimer’s. As Cassava navigates these challenges, investors and stakeholders will remain cautiously observant to see how the company adapts and responds in the coming weeks and months.

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Cassava Sciences Stock Plummets 85% After Failed Alzheimer’s Trial Results and Ongoing Investigations