Today, investors in Cassava Sciences (NASDAQ:SAVA) are seeing a lot of red. In fact, SAVA stock has shed more than 25% of its market capitalization today on one pretty heavy catalyst.
Yesterday, a statement of concern was filed with the Food and Drug Administration (FDA). This document requested that the FDA put a stop to Cassava’s clinical trials for its leading Alzheimer’s treatment. The statement of concern listed a number of issues with the science underpinning the company’s proposal to initiate Phase 3 trials of this treatment shortly.
The validity of clinical biomarker data, the methods used to conduct research and the ultimate findings the company has relied upon to move forward in the clinical trial process are all under siege as a result of this petition. Thus, investors are pricing much higher risk into this biotech stock today.
Let’s dive into Cassavia’s response to the allegations.
SAVA Stock Down on Waning Investor Confidence
Indeed, it appears Cassava is taking these allegations very seriously. Today, the company responded to the series of allegations, with a long rebuttal to each specific concern.
The company noted, “As a science company, we champion facts that can be evaluated and verified … This helps people make informed choices. It is important for stakeholders to separate fact from fiction, which is why we wish to address allegations head-on.” Accordingly, the company went line by line to address the various concerns.
Among the rebuttals listed were the following:
- Biomarker data was generated by Quanterix Corp., an independent company, and presented at the recent Alzheimer’s Association International Conference.
- Western blot analysis is foundational to the biotechnology industry. Western blotting is a standard lab technique used worldwide to detect a protein of interest.
- “Halo” effects in certain bands is a direct result of very dense dark loading control bands.
- A panel of independent, peer reviewers believe these changes represent an improvement, along with significant improvements in two other behavior tests.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.