If you’re going to invest in a biotechnology company like Cassava Sciences (NASDAQ:SAVA), don’t expect slow and steady returns. SAVA stock isn’t for the faint of heart, or the risk-averse.
However, this doesn’t mean that Cassava isn’t worth investing in. Indeed, this is one of the more promising companies to join in the ongoing battle against the terrible effects of Alzheimer’s disease. Cassava takes a different approach to treating Alzheimer’s disease than some other companies.
Specifically, Cassava’s methodology is based not on clearing the brain of amyloid (an abnormal protein), but on stabilizing filamin A, a scaffolding protein.
It’s highly encouraging to witness Cassava Sciences’ progress in this endeavor. And just recently, the company embarked on a new clinical trial phase which, we can hope, will eventually yield positive outcomes.
SAVA Stock at a Glance
Given the current share price, you might be surprised to learn that SAVA stock started out near $7 in early January.
Maybe we can credit Reddit users for this, or maybe we can’t, but the stock catapulted to $90 in early February, and then to a 52-week high of $146.16 on July 29. Rallies of that magnitude are hard to sustain, though. As it turned out, SAVA stock dropped into the $50s, and that’s where it was trading in at the start of November. However, soon after, it leapt back up to the $80s again.
Given the stock’s wild price action, it’s difficult to predict where it will be at the end of the year. Getting it to stay around $80 at least would be a positive sign.
Whatever you do, though, please be sure to keep your position size small as substantial capital loss is always a possibility.
Responding to the Allegations
Just to recap, Cassava has two main product candidates.
One of them is simufilam, which is designed to treat Alzheimer’s. The other is a blood-based investigational diagnostic known as SavaDx. Both of these products are important, but Cassava’s investors tend to focus on simufilam. The fact that simufilam is a relatively non-invasive oral drug candidate is definitely an advantage of this product.
On the other hand, not everyone is enthusiastic about simufilam. In August, claims were reportedly being made that Cassava’s trial data lacked “accuracy and integrity.”
Moreover, there was a citizen petition (apparently originating from a former Securities and Exchange Commission lawyer) recommending that the U.S. Food and Drug Administration (FDA) halt the clinical studies of simufilam. Cassava Sciences President and CEO Remi Barbier was crystal-clear in his response: “We intend to vigorously defend ourselves and our stakeholders against false and misleading allegations.”
Cassava continued to advance simufilam, and released the top-line results of a 12-month interim analysis from an open-label study of the drug.
SAVA CEO ‘Energized and Encouraged’ By Results
In that study, Cassava Sciences tested simufilam in patients with mild-to-moderate Alzheimer’s disease. Among the first 50 study subjects who completed the simufilam trial, an impressive 68% of them improved on the Alzheimer’s Disease Assessment Scale–Cognitive Subscale (ADAS-Cog) at 12 months. Plus, there were no drug-related, serious adverse events reported during the trial phase.
“I feel energized and encouraged by the clinical data,” Barbier declared at that time. “We look forward to the initiation of a randomized, double-blind, placebo-controlled pivotal Phase 3 clinical program with simufilam in people with Alzheimer’s disease,” the CEO added.
That Phase 3 trial commenced in early October. This simufilam trial will actually involve two research studies. The first study will involve 750 patients with mild-to-moderate Alzheimer’s disease over a 52-week period. For the second study, Cassava plans to enroll approximately 1,000 patients over a 78-week period and that is expected to start before year’s end.
The Takeaway
To quote Cassava Sciences’ CEO, “existing drug solutions for Alzheimer’s have limitations, and new solutions are very much needed.”
In light of this need, Cassava is working diligently to advance the company’s clinical trials for simufilam, while maintaining safety standards.
Not everyone is on board with Cassava’s research, but in time, the data will determine who was right and who was wrong.
So, feel free to conduct your own due diligence on Cassava Sciences. I give it a B in my Portfolio Grader. Consider a small investment if you’re confident in the company’s commitment to scientific research and discovery.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (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.
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