The law firm of Kessler Topaz Meltzer & Check, LLP alerts investors of Cassava Sciences, Inc. that a securities fraud class action lawsuit has been filed on behalf of those who purchased or acquired Cassava securities between September 14, 2020 and August 27, 2021, inclusive (the “Class Period”).
Cassava is a clinical stage biotechnology company. Its lead therapeutic product candidate is called simufilam (formerly PTI-125) developed as a treatment for Alzheimer’s disease. Simufilam purportedly targets an altered form of a protein called filamin A (“FLNA”) in the Alzheimer’s brain and reverts it to its native, healthy conformation, thereby countering the downstream toxic effects of altered FLNA.
The truth regarding simufilam began to emerge after the close of trading on August 24, 2021, when it was disclosed that the U.S. Food and Drug Administration (“FDA”) had received a so-called Citizen Petition commencing an administrative action to “halt two ongoing trials of the drug Simufilam . . . pending a thorough audit by the FDA.” As detailed in the Citizen Petition, “[i]nformation available to the petitioner . . . raises grave concerns about the quality and integrity of the laboratory-based studies surrounding this drug candidate and supporting the claims for its efficacy.”
On August 25, 2021, before the market opened, Cassava issued a response to the Citizen Petition, claiming that the allegations regarding scientific integrity are false and misleading. Among other things, Cassava claimed that the clinical data, which the Citizen Petition stated had been reanalyzed to show simufilam was effective, had been generated by Quanterix Corp. (“Quanterix”), an independent company, suggesting that the reanalysis was valid.
On August 27, 2021, before the market opened, Quanterix issued a statement denying Cassava’s claims, stating that it “did not interpret the test results or prepare the data” touted by Cassava. That same day, Cassava responded to Quanterix’s statement, stating that “Quanterix'[s] sole responsibility with regard to this clinical study was to perform sample testing, specifically, to measure levels of p-tau in plasma samples collected from study subjects.” Following this news, Cassava’s share price fell $12.51, or 17.6%, to close at $58.34 per share on August 27, 2021.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (1) data underlying the foundational research for Cassava’s product candidates had been manipulated; (2) experiments using post-mortem human brain tissue frozen for nearly 10 years was contrary to a basic understanding of neurobiology; (3) biomarker analysis for patients treated with simufilam had been manipulated to conclude that simufilam was effective; (4) Quanterix, an independent company, had not interpreted the test results or prepared the data charts for the biomarker analysis for patients treated with simufilam; (5) as a result of the foregoing, there was a reasonable likelihood that Cassava would face regulatory scrutiny in connection with the development of simufilam; and (6) as a result of the foregoing, the defendants’ positive statements about Cassava’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)