Cassava Sciences, Inc. (SAVA) shares tumbled 17.8% on Friday, falling for the third day in a row to close at $58.34 after Quanterix Corporation (QTRX) distanced itself over a previously disclosed phase 2b clinical study on its key drug, simufilam. The company recently said that the drug improved cognition in Alzheimer’s patients.
Shares of the biotechnology company focused on Alzheimer’s disease have plummeted over 50% in the last three trading days. (See Cassava Sciences stock charts on TipRanks)
Let’s take a look at the turn of events that led to the huge decline in the share price last week.
According to an article posted on investor.com on Wednesday, August 25, shareholder firm Labaton Sucharow expressed its concerns regarding the validity of Cassava’s biomarker data analysis using the Western Blot method and said that Cassava manipulated the data. After the news, shares slipped 31.4%.
The same day, Cassava Sciences responded via a press release saying that the claims made regarding the scientific integrity of its study are false and misleading.
Notably, Cassava issued a detailed explanation defying the allegations saying, “It is important for stakeholders to separate fact from fiction, which is why we wish to address allegations head-on.”
Cassava Sciences claimed that the results were independent as they were generated by Quanterix, a highly- regarded independent laboratory, and not by Cassava itself.
Despite the detailed opposition provided by Cassava, shares fell another 12.4% on Thursday after Labaton Sucharow filed a petition on behalf of its “clients who collectively have expertise in neuroscience, drug discovery biochemistry and finance.”
Notably, Labaton Sucharow also mentioned that its clients held short interests in Cassava shares.
Shares plunged further on Friday when the testing laboratory said in a written statement, “Quanterix or its employees did not interpret the test results or prepare the data charts presented by Cassava at the Alzheimer’s Association International Conference (AAIC) in July 2021 or otherwise.”
In response to the allegations, Cassava issued another statement on Friday saying that it had hired Quanterix Corp to perform sample testing on blinded samples and that Cassava had conducted the Phase 2b clinical study itself.
Cassava said that Quanterix’s sampling was conducted entirely by its own employees and that Quanterix’s employees were not aware whether the samples provided were from placebo or from patients treated with simufilam.
Quanterix conducted sample testing on blinded samples and sent the raw data to Cassava Sciences for further analysis. Cassava Sciences presented this data via a presentation at the AAIC in July.
Cassava said that it adhered to scientific authorship guidelines and received permission from Quanterix to include its lab personnel in the author list before submitting the data to the agency.
Cassava CEO Remi Barbier said, “To ensure data integrity, it is standard industry practice to keep separate the people who generate the data from the people who analyze the data.”
Barbier added, “That certainly was the case here. Anything different is a distortion of the facts.”
JonesTrading analyst Soumit Roy recently initiated coverage on Cassava Sciences with a Buy rating and the price target of $215 (368.5% upside potential).
Consensus among analysts is a Strong Buy based on 4 Buys and 1 Holds. The average Cassava Sciences price target of $154.80 implies 165.3% upside potential to current levels.
SAVA scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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