Cassava Sciences (NASDAQ:SAVA) stock rose 11% overnight after director Richard Barry said he bought shares worth $2.3 million.
The company is working on an Alzheimer’s drug called Simufilam. Cassava has a market capitalization of about $1 billion without any revenue.
The Great Drug Hunt
Alzheimer’s is a form of dementia that may impact up to one-third of those 85 or over. Researchers and drug companies have lately begun to dispute its cause. Numerous treatments before the Food and Drug Administration (FDA) are awaiting review.
Cassava’s Simufilam has conducted human trials. It is said to fix abnormalities in a protein called filamin A. But the same company was working on opioids in the last decade, under a different name. A whistleblower claimed Cassava’s clinical data was manipulated.
If Simufilam does work, it would be a blockbuster. About 6.2 million Americans have Alzheimer’s today, and 40% of the $4 billion Alzheimer’s drug market was in the U.S. last year.
Most attention has focused on efforts against a protein called amyloid beta implicated in the disease. Biogen (NASDAQ:BIIB) hopes the FDA will approve Leqembi, an Alzheimer’s treatment focused on amyloid beta, this summer. Aduhelm, another treatment approved in 2021, has been controversial because of its price and limited efficacy.
Cassava reported its 2022 results on Feb. 28, a net loss of $72.6 million, $1.90 per share. The company said it would enroll patients in a Phase 3 study of Simufilam this year and present data on other uses for its drug in the third quarter.
SAVA Stock: What Happens Next?
Drug studies and approvals move much more slowly than the stock market. Barry’s $2.3 million investment has already created a $100 million gain for Cassava’s other shareholders. Some might be taking that gain today.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.