SAVA Stock: Biotech Leader Down 68% From Highs
Last year, Cassava Sciences (Nasdaq: SAVA) led the market as it swiftly progressed through clinical trials. But, with SAVA stock down over 68% from its highs, is it a good time to buy?
Cassava is a clinical-stage biotech company focusing on developing a treatment for disease effecting the nerves. In particular, the company’s lead drug candidate Simufilam aims to treat Alzheimer’s disease (AD).
So far, there’s no cure for Alzheimer’s. It affects around 6 million Americans. Not only that, but the number is growing quickly. According to the Centers for Disease Control and Prevention (CDC), the number of people living with AD doubles every five years after age 65. And by 2060, research shows 14 million people could be living with the disease.
With this in mind, Cassava’s drug candidate is now entering Phase 3 trials. But this comes after several attempts to derail the progress.
SAVA stock has been a roller coaster ride for investors as a result. And now it’s trending on socials as investors speculate on FDA approval. Keep reading to learn more about Cassava Sciences and what to expect next.
What You Need to Know About Cassava Sciences
Founded in 1998 by Remi Barbier, Cassava Sciences rebranded in 2019 from its previous name, Pain Therapeutics. The move came as Barbier wanted the company to direct the company’s focus on neuro disease, particularly AD.
Yet it wasn’t until an open-label study claiming Simufilam Improves cognition and behavior in Alzheimer patients that SAVA stock started trending. The study was funded by the National Institute of Health (NIH). It found the treatment improved cognition scores by 10% on average. On top of this, dementia-related behavior enhanced by 29%.
Even more, Nadav Friendmann, Chief Medical Officer, added, “Today’s data once again suggests Simufilam could be a transformative, novel therapeutic.”
The positive news caused SAVA stock to soar over 400%, with share prices racing over $100 a share. And then again, in June, share prices skyrocketed to ATHs of $146 on positive news and updated guidance.
However, shortly after, SAVA stock tanked on allegations the company falsified data. The complaints from a law firm questioned the company’s Western blot images, suggesting they edited them.
Cassava fired back with a swift response backing the company’s science. Yet SAVA stock is still sitting on support around $44 a share.
SAVA Stock Trending Again
Now SAVA stock is trending again, and it’s for better reasons this time. The citizen’s petition is behind them, and Cassava is focusing on its second Phase 3 Study to evaluate the effectiveness of its lead drug.
The 78-week study currently enrolls around 1,000 patients with AD across the U.S and Canada. That being said, there is no cure for Alzheimer’s on the market right now. So far, several FDA approved drugs fall into two categories either:
- Drugs that may delay clinical decline
- Drugs that treat symptoms
And in some instances, a combination of drugs is used. But, Cassava’s drug work’s differently than the others on the market.
Simufilam is an oral drug that works to repair a certain protein in the brain called FLNA. Moreover, research shows that the FLNA protein is altered in AD patients. So, if the drug works as it’s designed, Cassava has a huge market opportunity on its hands.
With this in mind, SAVA stock has lost over a third of its value from its highs. The narrative is the same, but the only thing that’s changed is the allegations last year.
On top of this, Cassava let investors know unnamed government agencies were investigating it. Having said that, this could be a major reason SAVA stock is still under pressure.
What to Expect From SAVA Stock
Investors have a lot of information to process. At first, it seemed nothing could slow Cassava’s momentum as SAVA stock outperformed the market. Then, investor sentiment flipped as reports of lying surfaced.
It seems right now shares of Cassava Science have found support over $40 per share. Until we hear more information about the progress of the Phase 3 trial, it’s likely the stock will remain in limbo.
At the same time, if the company can continue its momentum from last year, we could see another runup. With Alzheimer’s affecting so many people and no effective treatments, the market is vast for Simufilam.
Furthermore, rival Biogen’s (Nasdaq: BIIB) AD drug Aduhelm, approved last summer, is experiencing severe issues. Medicare officials are looking to restrict coverage on the overpriced drug. Even more, the medication is causing swelling or bleeding in 41% of patients.
If Cassava can progress through trials avoiding any issues, the market is wide open. On the other hand, if the drug fails out of trials, it will spell further trouble for SAVA stock.
Final Thoughts
Like many biotech stocks, the success of Cassava Sciences is hinging on the approval of its drug. That said, the company doesn’t have any other candidates close to approval.
If Phase 3 progresses smoothly, the company’s lead drug will be on track for FDA approval. We should continue seeing updates throughout this year. And if everything goes as planned, we should see results by the end of the year.
Then again, expectations are high, with the company value nearing $2 billion. If any roadblocks pop up on the way, investors should be ready for a bumpy ride.
SAVA stock is a high-risk, high reward setup that could go either way. If the science behind the drug works as Cassava claims, it could be a game-changing drug for patients with AD.
If not, SAVA shares could revisit lows before clinical trials began. Either way, it will be an exciting stock to watch over the next year. Updates are likely to come.