By Cassava Sciences (SAVA), the Austin-based biotech firm specializing in neurodegenerative diseases, suffered a major blow on Monday when its stock plunged 85%.
The sharp drop came after the company announced that its Phase 3 clinical trial for simufilam, an experimental Alzheimer’s treatment, failed to meet its primary endpoints.
This marks the company’s biggest-ever single-day decline and adds to a series of setbacks, including recent investigations by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).
Cassava, which currently has no FDA-approved products, ended the third quarter with $149 million in cash and equivalents, according to Chief Financial Officer Eric Schoen.
The company stated that this capital should sustain operations as it charts its future course.
Trial results fall short of expectations
The Phase 3 trial aimed to assess simufilam’s impact on cognitive and functional decline in patients with mild to moderate Alzheimer’s disease.
However, the treatment failed to show statistically significant improvements compared to a placebo on the ADAS-Cog 12 and ADCS-ADL scales—standard tools for measuring cognitive and functional abilities in Alzheimer’s patients.
The simufilam group showed a 0.39-point reduction on the ADAS-Cog 12 scale and a 0.51-point increase on the ADCS-ADL scale.
Both results indicated slight improvements but failed to achieve statistical significance, with p-values of 0.43 and similarly inconclusive levels, respectively.
Chief Medical Officer Jim Kupiec noted that while the drug demonstrated a favourable safety profile, the results did not justify continuing a second Phase 3 trial.
CEO addresses trial shortcomings
CEO Rick Barry acknowledged the disappointing results, attributing part of the issue to an unexpectedly mild cognitive decline in the placebo group.
“We are working to understand why the placebo group’s loss of cognition was less pronounced than in previous studies,” Barry said.
Despite the trial’s failure, Barry emphasized the company’s commitment to analyzing the data further and presenting detailed results at an upcoming medical conference.
“Cassava will continue to review all of the data and evaluate next steps,” he added.
Cassava’s past controversies overshadow current challenges
The trial results come against a backdrop of regulatory scrutiny.
In September, Cassava’s founder and former CEO Remi Barbier, along with former senior vice president Lindsay Burns, agreed to pay over $40 million to settle allegations of misleading claims about the Alzheimer’s treatment.
Additionally, the SEC charged Hoau-Yan Wang, a consultant and co-developer of simufilam, with manipulating clinical trial data to make it appear that the drug caused significant improvements in biomarkers.
Wang also faced allegations of submitting fraudulent grant applications to the National Institutes of Health (NIH).
Cassava emphasized that Wang was not involved in the Phase 3 trial, which enrolled 804 patients across 75 sites in the US, Canada, and Australia.
The double-blind study randomized participants to receive either 100 mg of simufilam or a placebo.
Secondary endpoints of the trial included neuropsychiatric symptoms and caregiver burden, but the main goals of improving cognitive and functional outcomes were not achieved.
Future uncertain amid steep stock decline
The trial failure and ongoing regulatory scrutiny have raised questions about Cassava’s future.
Although its stock had gained 17.6% year-to-date, Monday’s 85% drop underscores the challenges facing the company.
As Cassava plans to present detailed findings and analyze the trial data, the road ahead appears fraught with both scientific and legal hurdles.
The company’s ability to recover from this significant setback remains to be seen.
The post Cassava Sciences plummets 85% after Alzheimer’s drug trial failure appeared first on Invezz
