A shareholder firm called for the Food and Drug Administration to halt Cassava Sciences‘ (SAVA) studies in Alzheimer’s disease, leading SAVA stock to plummet Wednesday.
Cassava is working on an Alzheimer’s treatment called simufilam which binds to and stabilizes an altered version of the protein filamin A. But a “whistleblower submission” from Labaton Sucharow calls into question three major areas of concern and six smaller concerns surrounding the company’s data. The firm claims Cassava engaged in “data manipulation and misrepresentation.”
The company responded to the Labaton Sucharow’s claims saying it “stands behind its science, its scientists and its scientific collaborators.”
On the stock market today, SAVA stock plunged 31.4% to 80.86.
SAVA Stock Plunges On Accusations
Specifically, Labaton Sucharow questioned the validity of Cassava’s biomarker data, a method of examining the data called a Western Blot and the analyses of human brain tissue. In all cases, the firm accused Cassava of data manipulation.
“These frequent errors and anomalies occur in a pattern which is frequently favorable to the authors’ hypotheses and is of sufficient magnitude to strong suggest scientific misconduct,” the firm wrote in its report.
The claims sent SAVA stock below its 50-day moving average for the first time in weeks, according to MarketSmith.com.
But Cassava went through Labaton Sucharow’s claims in another report. Among Cassava’s points: The biomarker data were generated by a third-party company, the use of Western Blot of “foundational to the biotechnology industry” and brain tissue was collected within six hours of death, then flash frozen.
“As a science company, we champion facts that can be evaluated and verified,” Chief Executive Remi Barbier said in a written statement. “This helps people make informed choices. It is important for stakeholders to separate fact from fiction, which is why we wish to address allegations head-0n.”
Volatile, But Highly Rated Stock
Shares of Cassava are often volatile on Alzheimer’s data.
In late July, SAVA stock toppled 48% over two days after it presented interim data from an open-label simufilam study at nine months. Then, the company said cognition improved by an average of 18% in Alzheimer’s patients. That’s positive news, but SAVA stock fell following a bullish run-up.
SAVA stock was mostly rising again, until Wednesday. Shares have a best-possible Relative Strength Rating of 99. This puts SAVA stock in the top 1% of all stocks in terms of 12-month performance.
But shares have a middling Composite Rating of 51, reflecting SAVA stock’s performance in terms of fundamental and technical measures, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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