Keep an Eye on $60 as a Target Price for Cassava Sciences

Will you dare to wager on a stock that’s down, but is capable of moving higher? If so, then you’re invited to take a look at Texas-based clinical-stage biotechnology company Cassava Sciences (NASDAQ:SAVA) as the SAVA stock share price has declined sharply from its peak.

Cassava Sciences Inc logo visible on display screen
Source: Pavel Kapysh / Shutterstock.com

This had happened even though Cassava is fighting the good fight, working diligently to defeat Alzheimer’s disease. Apparently, having good intentions isn’t enough to impress some investors.

Yet, those good intentions could produce life-changing results for patients and strong returns for traders with good timing. As we’ll see, SAVA stock is known to pop without warning, so the next share-price move could happen at any moment.

The old saying goes, nothing ventured, nothing gains. For bold biotech investors, the gains may be substantial as a regulatory approval could send the bears into hibernation.

SAVA Stock at a Glance

If there’s any level which Cassava Sciences investors should watch, it’s definitely $60. In February, March, September and November of last year, SAVA stock ran toward $60. Unfortunately, the buyers were rejected every time.

Some technical analysts believe that a resistance level can become a support level when a stock breaks through it. This is particularly true when there’s heavy buying volume during the breakout.

Fast-forward to early February of 2022, and SAVA stock was trading near $45. Getting back to $60 isn’t too much to ask, and the stock can move higher than that if the buying volume is strong enough.

It’s All About the Science

What could get the Cassava Sciences share price back to $60 or higher? Sure, a Reddit-fueled pump might do the trick. However, waiting around for that to happen isn’t really a sensible investing strategy.

Instead of gambling on a Reddit rally, let’s look at the science behind Cassava’s primary product, known as simulfilam. This drug is a proposed treatment for Alzheimer’s disease.

Cassava Sciences started a Phase three clinical program with simufilam during 2021’s second half. A previous Phase two(b) trial showed promising treatment effects for Alzheimer’s disease, with no serious adverse events.

It’s fair to say that the Phase three trial is high-stakes for Cassava Sciences. As InvestorPlace contributor Mark R. Hake pointed out, the previous studies of simufilam “were open-label studies involving no placebos. The two Phase 3 clinical trials now underway involve a placebo and blind study.”

High Price Targets

Clearly, the future trajectory of SAVA stock depends on the outcome of Cassava’s Phase three trial for simufilam.

Investors will need to be patient, as clinical trials can take a while. Moreover, Cassava Sciences’ ongoing trial for simufilam involves not just one, but two clinical studies.

The first Phase three study for simufilam will evaluate symptomatic improvement in Alzheimer’s disease. Cassava’s objective here is to “demonstrate improved cognition and health function in subjects treated with simufilam compared to placebo.”

In contrast, the second Phase 3 study will evaluate the disease-modifying effects of simufilam in the treatment of Alzheimer’s disease. The goal of this study is to “demonstrate a slower rate of decline in cognition and health function in subjects treated with simufilam compared to placebo.”

Evidently, some Wall Street experts are preparing for a potentially positive outcome. For example, analysts at B. Riley reportedly issued a price target of $72 for SAVA stock along with a “buy” rating.

It’s also been reported that the stock has an average rating of “buy” and a Wall Street analyst consensus target price of $112. In light of this, it’s not unrealistic to expect the Cassava share price to reach at least $60.

The Takeaway

The fate of SAVA stock largely depends on the success of simufilam in treating Alzheimer’s disease.

Therefore, Cassava Science investors will want to keep an eye out for developments pertaining to the two Phase three studies for simufilam. They should also watch that $60 level as a breakout of that price point could mark the beginning of a much bigger rally.

Nothing is guaranteed on Wall Street, but it’s exciting to consider the breakthrough potential for Cassava Sciences as the company continues to seek an effective treatment for Alzheimer’s disease.

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.

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