Cassava Sciences, Inc. (NASDAQ:SAVA) is a clinical stage biotech firm. The company is focused on providing treatment for Alzheimer’s, a neurodegenerative disease. Its oral medicine, Simufilam, is in Phase 3 of clinical trials, pending approval for commercialization. The anticipated launch of this medicine has garnered investor interest. However, concerns have been raised about the quality of the drug’s clinical trial by a group of short sellers. Even though management denied such accusations, SAVA stock has tumbled about 85% from its 52-week high. Additionally, the stock is down 52.9% year-to-date.
For its Phase 3 clinical trial, Cassava needs to examine 750 Alzheimer’s patients for its Stage 1 analysis and 1,000 for Stage 2 inspection. So far, the company has enrolled 60 patients across two Phase 3 trials for the drug. Another 170 patients are currently in a screening process. In an effort to expedite the process and enhance patient enrollment, management is opening up clinical sites across the globe. 105 clinics have already opened.
Meanwhile, Simufilam is under pending approval from the U.S. Food and Drug Administration for commercial use. Any positive development in this area should boost SAVA stock.
Apart from this drug, the company is launching SavaDx. This is a blood test to detect the presence of Alzheimer’s disease before patients experience any symptoms. If the test is proven to be clinically successful, SAVA would start generating revenues even before it gets approval for its drug.
Institutional investors have been the net buyers of the stock over last quarter. BlackRock Fund Advisors is the largest holder with a 5.82% stake.
Turning to Wall Street, the average price target of the stock is $98.80 with a high forecast of $180 and a low forecast of $8. The average price target represents an over 300% change from the current price of $20.55. I am bullish on SAVA stock after a meaningful correction.
On the date of publication, Sakshi Agarwalla 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.