Cassava Sciences’ Valuation Questioned as Alzheimer’s Data Falls Short
April 7, 2023
Trending News 🌧️
Cassava Sciences ($NASDAQ:SAVA), a biotechnology company focused on developing treatments for neurological diseases, has come under scrutiny due to the potential overvaluation of their product. The company is currently researching a potential treatment for Alzheimer’s disease, however the evidence so far has not been strong enough to support their current valuation. This has caused some in the investment community to question their current stock price. They have been conducting clinical trials and have reported positive results, however the data has not been compelling enough for many investors to back the company at its current valuation.
With the current stock price almost double what it was in May of last year, investors are now beginning to doubt whether or not the company’s product will live up to its promise. It remains to be seen how much further the product can progress and whether or not Cassava Sciences will be able to maintain their current valuation.
Market Price
On Thursday, Cassava Sciences‘ stock opened at $23.9 and closed at $24.0, up by 0.5% from its prior closing price of $23.8. Despite the minor increase, the company’s overall valuation remains questionable in the wake of its recently released Alzheimer’s disease data. The data, which was initially seen as a potential breakthrough for the company, did not meet expectations and instead only produced limited success. This has caused investors to question the current value of the company, leading many to believe that a more accurate valuation can only be achieved when more substantial data is released. 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 | -76.25 | 76.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cassava Sciences. More…
| Operations | Investing | Financing |
| -77.51 | -2.71 | 47.8 |
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 |
| 234.83 | 7.29 | 5.45 |
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% | -23.5% | -21.3% |
Analysis
At GoodWhale, we recently conducted an analysis of CASSAVA SCIENCES‘s wellbeing. After an extensive review of their financial and business aspects, we have determined that CASSAVA SCIENCES is a medium risk investment according to our Risk Rating system. We have also detected three risk warnings in the income statement, balance sheet, and cashflow statement. If you are interested in learning more about our risk assessment of CASSAVA SCIENCES, please register with us to check it out. More…
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 is currently being viewed as an overvalued stock due to lack of evidence-based data supporting its Alzheimer’s drug pipeline. Despite investing in the company, investors should take caution as there is limited proof to back up the potential positives or negatives of investing in CASSAVA SCIENCES. Analysts recommend researching the company’s history and current developments in its Alzheimer’s drug portfolio before investing.
