Shares of Cassava Sciences (NASDAQ:SAVA) are down by over 15% following the previous day’s gain of 35%. Yesterday, the Securities and Exchange Commission (SEC) announced that it had closed its case on Cassava. Last November, the SEC began an investigation into the company after two physicians claimed that its research regarding Simufilam, an experimental Alzheimer’s Disease drug, was manipulated using software like Photoshop. The physicians filed a petition to the Food and Health Administration (FDA), asking the agency to suspend clinical trials of the drug. They also disclosed a short position in SAVA stock. At the time, CEO Remi Barbier denied the claims and characterized the petition as having “zero evidence, zero credible evidence, zero proof.”
The FDA later denied the petition, stating that any enforcement power was out of the scope of the FDA’s citizen petition procedures. This allowed the Simufilam trials to continue.
However, the Department of Justice (DOJ) began investigating Cassava in July based on the same accusations as the two physicians. The DOJ’s investigation is also examining claims that Cassava has misled investors and customers. Again, Cassava denied the accusations and also stated that it had not received any charges since the SEC investigation began. Furthermore, the company announced that no officer or director had sold shares of SAVA in over a decade, while short sellers had reportedly reaped profits of over $100 million.
Unlike the SEC case, the DOJ’s investigation is still ongoing.
Simufilam is currently undergoing two Phase 3 clinical trials. The results from the trials are expected to be released in mid-2024.
With that in mind, let’s take a look at the investors who are betting big on the success of the Alzheimer’s drug.
5 Investors Betting Big on SAVA Stock
Tracking institutional ownership is important, as these large investors provide liquidity and price support for stocks. During the second quarter, 143 13F filers reported owning SAVA, a decline of 15 funds from the previous quarter. On top of that, the institutional put/call ratio sits at 0.99, down from 1.56 during Q1. This means that institutions own about the same number of call options against Cassava as put options. So, who are the five largest shareholders?
- BlackRock (NYSE:BLK): 2.66 million shares. BlackRock sold 42,161 shares during Q2.
- Vanguard: 2.04 million shares. Vanguard purchased 72,983 shares during Q2.
- State Street (NYSE:STT): 1 million shares. State Street sold 53,888 shares during Q2.
- Geode Capital Management: 673,542 shares. Geode purchased 27,695 shares during Q2.
- Remi Barbier, CEO: 516,230 shares. Barbier’s position is accurate as of Q4 of 2020.
On the date of publication, Eddie Pan did not hold (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.