One of the biggest decliners in today’s market is Cassava Sciences (NASDAQ:SAVA). Shares of SAVA stock declined more than 20% at today’s trough on the company’s announced mid-stage results for its Alzheimer’s treatment.
Clearly, investors aren’t happy with the results.
Cassava noted that 47% of patients who took part in the study for more than one year saw improvements in their symptoms. The average improvement for the patients included in that group was 4.7 points (on a 70-point scale). However, these results are a disappointment from the initial results reported in September 2021. During the initial results released for the first cohort of patients, 68% reported an improvement, and on average, the improvement was six to eight points on the same scale.
Over time, it appears the company’s results have continued to decline. Let’s dive into what this means for investors.
SAVA Stock Declines on Disappointing Results
There are always likely to be variations in the clinical trial data reported by biotech companies. Cassava is no different, and these variations could understandably be within a reasonable range experts may expect.
However, it’s clear investors are growing weary of Alzheimer’s-related treatments, considering the bumpy road to approval seen by most drugs put forward for approval. Given the downward trajectory of efficacy shown by these results, it’s unclear if Cassava will prove successful in its bid. Thus, on a balance of probabilities, there may be more pragmatic options for investors to choose from right now.
The fact that this drug did not pose any serious side effects and was well-tolerated by patients is a positive. However, it’s unclear if regulators will warrant the improvements for a portion of the population to be significant enough for this drug to receive approval. That’s not saying anything about the willingness of insurance companies to pay up for the drug, too.
Thus, SAVA stock appears to be factoring in investor uncertainty today — and for good reason. This is a stock I will happily watch from the sidelines, at least for now.
On the date of publication, Chris MacDonald 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.