Clinical-stage biotech company Cassava (NASDAQ:SAVA) has a lot to write home about today. SAVA stock closed up nearly 20% after a new article attempted to clear its name of troubling accusations.
So what do you need to know?
If you recall, Cassava was first accused of data manipulation by a citizen petition filed with the U.S. Food and Drug Administration (FDA) this summer. Consequently, SAVA stock plunged, and remains down 45% over the last six months. Cassava did see a sizable November spike, but it was tragically short lived. Unfortunately, SAVA felt yet another pullback when further data manipulation rumors made their rounds last month.
Labaton Sucharow, a shareholder law firm, filed the accusation with the FDA on Nov. 17. The firm claimed Cassava’s Alzheimer’s treatment results were evidence of “seemingly irrefutable data manipulation.” They alleged the results of its clinical studies must be the result of Cassava cherry-picking patients. Relevant to the story, Sucharow represents doctors who hold short positions in SAVA stock
However, in lieu of today’s news, Cassava can breathe easy… at least for now. The journal Neuroscience published a new article stating it found no evidence of data manipulation related to Simufilam.
What Has Bulls Pushing SAVA Stock Up Today?
Interestingly, this isn’t the first study to clear Cassava. In October, an anonymous doctor of molecular biology investigated the legitimacy of the petitions against Simufilam. They came to a similar conclusion as Neuroscience.
“In summary, we find the fraud allegations in the citizen petition are filled with malice as they continue to attempt to discredit Simufilam and Cassava.”
Cassava is certainly appreciative of the independent studies clearing its allegations. Cassava President and CEO Remi Barbier commented on the studies. He also took the opportunity to rebuke those who would impede Cassava’s research:
“Another science journal has cleared us of allegations. …This reinforces my conviction that false and misleading allegations of scientific misconduct being made against us are simply designed to enrich those making them. People who seek to profit from false allegations may not comprehend the harm they are causing the Alzheimer’s community, or perhaps they simply don’t care.”
SAVA stock, at least, has certainly seen the benefits of these latest claims.
On the date of publication, Shrey Dua 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.