Pomerantz LLP announces that a class action lawsuit has been filed against Cassava Sciences, Inc. and certain of its officers. The class action, filed in the United States District Court for the Western District of Texas, and docketed under 21-cv-00856, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Cassava securities between September 14, 2020 and August 27, 2021, inclusive (the “Class Period”). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased Cassava securities during the Class Period, you have until October 26, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Cassava is an Austin-based clinical stage biotechnology company engaged in the development of drugs for neurodegenerative diseases. Its lead therapeutic product candidate is called simufilam (formerly PTI-125) developed as a treatment for Alzheimer’s disease (“AD”), and its lead investigational diagnostic product candidate was SavaDx, a blood-based biomarker/diagnostic to detect AD. 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 Company’s financial viability is largely dependent upon the clinical success of simufilam as the Company currently has no sources of revenues.
On February 2, 2021, Cassava announced results from its interim analysis of an open-label study of simufilam, which purportedly demonstrated that patients’ cognition and behavior scores both improved following six months of simufilam treatment, with no safety issues. According to the Company, “[i]n a clinical study funded by the National Institutes of Health and conducted by Cassava Sciences, six months of simufilam treatment improved cognition scores by 1.6 points on ADAS-Cog11, a 10% mean improvement from baseline to month 6,” and “[i]n these same patients, simufilam also improved dementiarelated behavior, such as anxiety, delusions and agitation, by 1.3 points on the Neuropsychiatric Inventory, a 29% mean improvement from baseline to month 6.”
As the market digested this news, the market price of Cassava common stock spiraled up, nearly quadrupling from its close of $22.99 per share on February 1, 2021 to trade as high as $90 per share in intraday trading by February 3, 2021. The stock spiked on extremely high trading volume of more than 76 million shares trading on February 2, 2021 alone, more than 19 times the average daily volume over the preceding ten trading days. Cassava immediately cashed in on the stock price inflation, issuing and selling more than four million shares of its common stock at $49 per share on February 12, 2021 through an underwritten follow-on public stock offering and reaping more than $200 million in gross proceeds (the “Offering”).
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the quality and integrity of the scientific data supporting Cassava’s claims for simufilam’s efficacy had been overstated; (2) data underlying the foundational research for Cassava’s product candidates had been manipulated; (3) experiments using post-mortem human brain tissue frozen for nearly 10 years was contrary to a basic understanding of neurobiology; (4) biomarker analysis for patients treated with simufilam had been manipulated to conclude that simufilam was effective; (5) Quanterix Corp. (“Quanterix”), an independent company, had not interpreted the test results or prepared the data charts for the biomarker analysis for patients treated with simufilam; (6) 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 (7) as a result of all the foregoing, Defendants’ positive statements during the Class Period about the Company’s business metrics and financial prospects and the likelihood of U.S. Food and Drug Administration (“FDA”) approval were false and misleading and/or lacked a reasonable basis.
On July 29, 2021, Cassava issued a press release entitled “Cassava Sciences Announces Positive Cognition Data with Simufilam in Alzheimer’s Disease.” Although the press release touted supposedly positive cognition data, analysts and industry observers noted that the data had not demonstrated that simufilam was more effective at improving cognition than Biogen Inc.’s (“Biogen”) drug Aduhelm.
On this news, Cassava’s share price fell $65.77, or 48.61%, over two trading days, to close at $69.53 per share on July 30, 2021.
On August 24, 2021, after the market closed, reports emerged about a citizen petition submitted to the FDA concerning the accuracy and integrity of clinical data for simufilam. The petition requested that the FDA halt Cassava’s clinical trials pending a thorough audit of the publications and data relied upon by the Company. Among other things, the petition stated that the “[d]etailed analysis of the western blots [relied on by Cassava to support the connection between simufilam and Alzheimer’s] shows a series of anomalies that are suggestive of systematic data manipulation and misrepresentation.” It also stated that the methodology for studies “about Simufilam’s effects in experiments conducted on postmortem human brain tissue . . . defies logic, and the data presented again have hallmarks of manipulation.” The petition further stated that, after initial analyses of Phase 2b trials found that Simufilam was ineffective in improving the primary biomarkers endpoint, “Cassava had these samples analyzed again and this time reported that Simufilam rapidly and robustly improved a wide array of biomarkers” and the reanalysis “shows signs of data anomalies or manipulation.”
On August 25, 2021, before the market opened, Cassava issued a response to the petition, claiming that the allegations regarding scientific integrity are false and misleading. Among other things, the Company claimed that the clinical data, which the citizen petition stated had been reanalyzed to show simufilam was effective, had been generated by Quanterix, an independent company, suggesting that the reanalysis was valid.
On this news, the Company’s share price fell $36.97, or 31.38%, to close at $80.86 per share on August 25, 2021, on unusually heavy trading volume.
On August 27, 2021, before the market opened, Quanterix issued a statement denying the Company’s claims, stating that it “did not interpret the test results or prepare the data” touted by Cassava.
The 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.”
On this news, the Company’s share price fell $12.51, or 17.66%, to close at $58.34 per share on August 27, 2021, on unusually heavy trading volume.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980