Cassava Sciences stock plummeted Monday — wiping out more than three-quarters of its value — after the company's Alzheimer's treatment failed in Phase 3 testing.
The company tested its drug, simufilam, in patients with mild-to-moderate Alzheimer's disease. After a year, patients who received simufilam didn't show a significant reduction in cognitive or functional decline compared to the placebo group.
"We took careful measures to enroll patients with mild-to-moderate AD," Chief Executive Rick Barry said in a statement. "Despite that, the loss of cognition in the placebo group was less pronounced than was previously reported in other placebo-controlled studies in AD. We are working to understand this better."
Cassava Sciences stock crashed 83.8%, closing at 4.29. That put SAVA stock at its lowest point in four years.
Second Phase 3 Shuttered
Cassava examined patients on two scales following 52 weeks of treatment with simufilam, an oral Alzheimer's treatment. One measured cognitive skills, while the other focused on patients' abilities to perform activities of daily living. But the results didn't meet Cassava's goal.
The company is now shutting down its second Phase 3 study, called ReFocus-ALZ, as well as an ongoing open label extension study. In the latter study, patients are all knowingly receiving simufilam.
The news is a blow to a program that has widely split Wall Street.
SAVA Stock's Lengthy Battle
Cassava Sciences stock began to really gain steam in 2021.
Cassava Sciences said simufilam improved cognition in patients with mild-to-moderate Alzheimer's disease. That would have been unprecedented. Other drugs — including now approved treatments from Biogen and Eli Lilly — only slow cognitive decline.
At the time, critics noted the results were from open-label testing, where patients know they're receiving the test drug. There was no placebo group for comparison.
And, shortly after, a group of short sellers accused Cassava of manipulating its test results. They claimed Cassava faked images in one analysis, used a faulty method of collecting brain tissue from cadavers and manipulated its biomarker data. The firestorm caused Cassava Sciences stock to plummet, though the company has consistently denied the claims.
That kicked off a Securities and Exchange Commission investigation.
This July, former CEO, Remi Barbier, unexpectedly resigned. He remained with the company for two additional months "in a nonexecutive capacity, without duties or responsibilities." Lindsay Burns, the company's senior vice president of neuroscience and Barbier's wife, also stepped down immediately.
SAVA stock tumbled more than 29% on July 17, the day Barbier and Burns left the company. That was from a low base under 10 per share, however.
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