One of the stocks most in focus today for investors is Cassava Sciences (NASDAQ:SAVA). Shares of SAVA stock have surged more than 15% as investors digest some promising news about the company’s lead drug candidate.
Simufilam, a small molecule drug aimed at managing various types of tumors, has some additional data. The company released data from academic researchers, highlighting the potential for simufilam to reverse alterations of the filamin A (FLNA) protein in pituitary tumor cells. The company notes that it improved cell signaling as a result.
The research data shows that “FLNA is a central factor influencing pituitary tumor cell behavior,” suggesting that simufilam could be taken further. The company’s president and CEO, Remi Barbier, noted in a press release that these data:
“… show an in vitro drug effect for simufilam in a pathway outside of neurodegeneration. This bioactivity is thematically consistent with the proposed mechanism of action of simufilam in Alzheimer’s disease, namely, simufilam reverses a filamin A alteration. To be clear, we’re inspired by this promising research, but that’s as far as it goes. We have no immediate plans to initiate by ourselves a clinical program in cancer.”
Let’s dive into what investors should make of this news.
Why Is SAVA Stock Surging Today?
To be sure, Cassava is a biotech stock with a drug candidate that is promising but not a sure thing. That’s what makes biotech stocks so volatile and days like today so rewarding for so many investors.
Cassava’s surge today on this intriguing research data suggests that investors had not previously priced in the potential impact of simufilam as a potential treatment for Alzheimer’s. Given the hoopla around other Alzheimer’s drugs in recent years, this is certainly a welcome development for investors seeking further upside with the company’s lead candidate.
More research will need to be done, and Cassava remains a relatively speculative name. However, with a market capitalization that’s officially surged above $1 billion in today’s session, this is a company with what is expected to be a blockbuster drug. I’ve got this biotech stock on my list and will be watching to see if other larger pharma companies look to make a bid for the company’s pipeline.
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.