Shares of Cassava Sciences (NASDAQ:SAVA), which has an Alzheimer’s drug candidate called simufilam, fell 35% on June 28 and another 13% over the weekend. This move in SAVA stock comes after a key science advisor was charged with defrauding the National Institutes of Health (NIH).
Indeed, Hoau-Yan Wang, a professor at the City University of New York (CUNY), was charged with fraud of over $16 million in grants.
Cassava opened today at about $10.70 per share, far from its June 28 opening price of nearly $19 per share. Its market capitalization is currently down to about $540 million.
SAVA Stock: Simu Flimflam?
Wang wasn’t just a “former science advisor,” as stated in Cassava’s press release on the matter. He co-wrote numerous articles with Cassava supporting the scientific rationale for simufilam. The drug is currently undergoing late-stage testing as an Alzheimer’s treatment.
Last year, a CUNY investigation found signs that images in Wang’s early papers were manipulated. This included a 2012 paper indicating simufilam “can blunt the pathological effects of beta amyloid, a protein widely thought to drive Alzheimer’s disease,” per Science.
The CUNY report said that Wang failed to turn over any data or notebooks in response to the allegation. It also cited an “unwillingness to provide primary research materials” as a “source of deep frustration.”
Back when it was Pain Therapeutics, Cassava pushed an opioid called Remoxy. A 2022 New Yorker piece about CEO Remi Barbier and whistleblowers detailed some of its problems. Cassava’s clinical data was manipulated, a whistleblower said.
Insider Richard Barry said he bought $2.3 million in shares last year, helping keep SAVA stock afloat.
What Happens Now?
Cassava came public in 2020 at $8 per share and traded as high as $146 on hopes for simufilam. I wrote in early 2022 that “you just can’t be sure” about simufilam’s efficacy.
We may be getting our answer.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
