Cassava Sciences Stock Drops 17% After Reporting Unimpressive Results from Alzheimer’s Trial
January 31, 2023
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Cassava Sciences ($NASDAQ:SAVA) Inc. is a clinical-stage biotechnology company that is focused on developing groundbreaking treatments for neurodegenerative diseases. It is based in Austin, Texas and trades on the Nasdaq under the ticker symbol SAVA. On Tuesday morning the stock dropped by 17% after the company reported the results from their Phase 2 clinical trials of simufilam, their oral candidate for treating mild-to-moderate Alzheimer’s disease. The study had over 200 participants who were given 100mg of simufilam tablets twice daily for a period of at least one year. The primary efficacy endpoint for this trial was ADAS-Cog mean scores, which measure cognitive performance, and unfortunately, the results showed minimal changes in the participants. This lack of meaningful efficacy results led to the drop in Cassava Sciences stock price. The market was expecting better results from the trial, as the company had previously reported positive results from a Phase 1 study.
However, the Phase 2 trial was not successful in demonstrating any significant improvement in the participants. This has left investors disappointed and has put a strain on the company’s finances. Despite the setback, the company believes that they can still make progress in the field of Alzheimer’s research. They plan to continue their research and will likely focus on other potential therapies as well. Cassava Sciences will also need to look for different ways to raise capital in light of the recent stock drop. Overall, the results of this Phase 2 trial were unimpressive and have caused Cassava Sciences stock to drop significantly. The company needs to find new ways to secure funding in order to continue its research and development efforts. Despite the setback, they remain committed to their mission of finding treatments for neurodegenerative diseases.
Stock Price
The stock opened at $33.9 and closed at $29.4, a plunge of 19.2% from the prior closing price of 36.4. The results showed that the drug was tolerable, but it did not meet the primary endpoint of improving cognitive function in patients with mild-moderate Alzheimer’s. The news sent shockwaves through the market and investors sold off their shares, causing the stock to plunge. The company had invested significant resources into researching and developing the drug, so this news came as a huge surprise to the market.
Investors are now re-evaluating their positions in the company and it remains to be seen how the stock will respond in the coming days. While this is a major setback for Cassava Sciences, it is important to remember that these types of trials are notoriously difficult and there is still a chance that the drug could show positive results in future trials. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cassava Sciences. More…
| Total Revenues | Net Income | Net Margin |
| 0 | -71.28 | 76.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cassava Sciences. More…
| Operations | Investing | Financing |
| -64.18 | -3.15 | 0.47 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cassava Sciences. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 207.29 | 8.57 | 4.96 |
Key Ratios Snapshot
Some of the financial key ratios for Cassava Sciences are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.0% | – | 76.3% |
| FCF Margin | ROE | ROA |
| -16.9% | -22.0% | -22.2% |
VI Analysis
CASSAVA SCIENCES is a company with strong fundamentals and long-term potential, according to the VI Star Chart. It is categorized as an ‘elephant’ due to its large assets, even after deducting liabilities. Such a company may be of interest to investors who prioritize asset-rich companies over those that offer dividends, growth, and profitability. In terms of health, CASSAVA SCIENCES scores a 5/10, considering its cashflows and debt. This indicates the company may be able to pay off debts and fund future operations. In terms of strengths and weaknesses, the company has strong assets and is weak in dividend, growth, and profitability. Therefore, investors should consider the strengths and weaknesses of CASSAVA SCIENCES before investing and decide if it is the right fit for their portfolio. More…
VI Peers
The company’s lead drug candidate is an orally available small molecule, PTI-125, which is in Phase 2 clinical trials for the treatment of Alzheimer’s disease. Cassava Sciences Inc has a strategic collaboration agreement with Janssen Pharmaceuticals, Inc., a division of Johnson & Johnson, for the development and commercialization of PTI-125. Cassava Sciences Inc’s main competitors are Anavex Life Sciences Corp, Biogen Inc, Eli Lilly and Co.
– Anavex Life Sciences Corp ($NASDAQ:AVXL)
Anavex Life Sciences Corp is a clinical stage biopharmaceutical company engaged in the discovery and development of novel therapeutic drugs for the treatment of central nervous system diseases and cancers. The company’s lead drug candidate, ANAVEX 2-73, is currently being evaluated in a Phase 2 clinical trial for the treatment of Alzheimer’s disease. Anavex’s other drug candidates include ANAVEX 3-71, which is in Phase 1 clinical trials for the treatment of epilepsy, and ANAVEX 1037, which is in preclinical development for the treatment of Parkinson’s disease.
Anavex Life Sciences has a market capitalization of $872.96 million and a negative return on equity of 19.0%. The company’s lead drug candidate, ANAVEX 2-73, is currently being evaluated in a Phase 2 clinical trial for the treatment of Alzheimer’s disease. Anavex’s other drug candidates include ANAVEX 3-71, which is in Phase 1 clinical trials for the treatment of epilepsy, and ANAVEX 1037, which is in preclinical development for the treatment of Parkinson’s disease.
– Biogen Inc ($NASDAQ:BIIB)
Biogen Inc is a multinational biopharmaceutical company based in the United States. The company focuses on the discovery, development, and commercialization of therapies for the treatment of neurological and neurodegenerative diseases. As of 2022, Biogen has a market capitalization of 38.38 billion dollars and a return on equity of 14.98%.
– Eli Lilly and Co ($NYSE:LLY)
Eli Lilly and Co is a pharmaceutical company with a market cap of 312.67B as of 2022. The company has a Return on Equity of 45.88%. Eli Lilly and Co manufactures and markets prescription pharmaceuticals and over-the-counter products. The company was founded in 1876 and is headquartered in Indianapolis, Indiana.
Summary
Cassava Sciences Inc. is a clinical-stage biopharmaceutical company focused on developing treatments for neurological disorders. Unfortunately, the results were not as impressive as expected and the stock price of the company dropped 17% as a result. Investors should closely monitor the company’s progress and carefully consider the risks associated with investing in a clinical-stage company. The success of future trials will be key for the stock’s potential performance in the future.
