Important points
Cassava Sciences and two former executives have agreed to pay more than $40 million in a settlement with the SEC, which said Cassava made misleading statements about clinical trials for Alzheimer’s disease drugs. Cassava did not confirm or deny the charges in the settlement. According to the SEC, study data was manipulated to make it appear as if the drug was dramatically successful in improving biomarkers associated with Alzheimer’s disease.
Cassava Sciences (SAVA) stock price rises 11% after the company agreed to a $40 million settlement with the Securities and Exchange Commission (SEC) for allegedly manipulating clinical trial data related to its Alzheimer’s disease drug. It fell more than that.
The company and two former executives made “misleading statements” in September 2020 about the results of a Phase 2 trial of the cassava drug Simufilam, the SEC said Thursday.
According to the SEC, the medical professor who co-developed the drug manipulated the results to make it seem like the drug had a dramatic effect on Alzheimer’s disease. The settlement was made without Mr. Cassava confirming or denying the SEC’s findings.
The SEC found that Cassava misled investors by claiming that the tests were conducted in blind conditions and by failing to disclose the role of co-developers. According to the SEC, the company also falsely claimed that simfilam improved patients’ cognitive function by disclosing only part of the data.
In addition to the $40 million settlement from Cassava, then-CEO Rémi Barbier agreed to pay $175,000. Richard Barry became Cassava’s CEO earlier this month after being appointed executive chairman of the company in July.
Despite Friday’s decline, cassava stocks are still up about 25% this year.
