Cassava: High Risk Speculative Play With Enormous Potential

Sep. 22, 2022 5:44 PM ETCassava Sciences, Inc. (SAVA)329 Comments


  • Initiation of a phase 3 program open-label extension study using Simufilam for patients with Alzheimer's Disease is expected in 2nd half of 2022.
  • An ongoing long-term open label study, initiated in March of 2020 is ongoing; Dosing completion is expected Q4 of 2022 and results from it are expected before end of 2022.
  • Two phase 3 trials are ongoing under SPA agreement with FDA, which are RETHINK-ALZ and REFOCUS-ALZ; First set of results from one study could be expected around October of 2023.
  • It is estimated that the global market opportunity for Alzheimer's Disease could reach $17.7 billion by 2025.
  • Looking for higher risk/reward options trading ideas? I offer this and much more at my exclusive investing ideas service, Biotech Analysis Central. Learn More »

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Cassava Sciences (NASDAQ:SAVA) is a great high risk/high reward biotech play to look into. The reason why I state that is because it has two ongoing late-stage randomized clinical trials using its main drug, known as Simufilam, for the treatment of patients with mild-to-moderate Alzheimer's Disease (AD). It has already released updated interim results from an open-label study using this drug for this patient population in the most recent second-quarter financials report. These two phase 3 studies are known as RETHINK-ALZ and REFOCUS-ALZ, however, the eventual goal is to get patients who complete these studies and then move them over to a new open-label extension study from this phase 3 program. This could act as a catalyst opportunity for investors to look forward to. There was a long-term open-label study initiated back in March of 2020 which is also using Simufilam for the treatment of patients with mild-to-moderate Alzheimer's Disease (AD) over a 12-month period. Drug dosing for this trial is expected to be completed Q4 of 2022 and top-line results are expected before end of 2022. This would be a 2nd catalyst that investors can look forward to before the end of this year. An interim analysis was conducted on another open-label study treating the first 100 evaluable Alzheimer's Disease patients who took Simufilam. Patients for this open-label study were treated over a 12-month period as well, with 100 mg twice daily Simufilam dosing. It was shown that overall ADAS-Cog11 scores improved at an average of 1.5 points. While not exactly proof that the drug performs better than placebo, it offers a great starting point for this biotech.

Simufilam Could Potentially Be A Great Therapy For Alzheimer's Disease

Simufilam is being developed by Cassava Sciences as a possible treatment option for patients with Alzheimer's Disease. Alzheimer's disease occurs when a person's memory and other mental functions start to deteriorate. Brain cells start to die and that's when the memory loss starts to occur. There are no cures at all and many biotechs have tried and failed to succeed in studies. There are roughly 3 million cases of Alzheimer's in the U.S. each year. It is a large population to treat and any biotech that is able to come up with a solid treatment will be greatly rewarded. It is estimated that the global market opportunity for Alzheimer's Disease could reach $17.7 billion by 2025. This is another huge global market for Cassava should it ultimately move this program forward.

Cassava is in great shape because as I stated in the beginning above, it is running two late-stage double-blind, randomized, placebo-controlled studies using Simufilam for the treatment of patients with mild-to-moderate Alzheimer's Disease. A key item to know is that both of these studies are using two co-primary efficacy endpoints, which are as follows:

  • ADAS-Cog12 (measure of cognition)
  • ADCS-ADL (measure of function)

There is a secondary endpoint as well that combines both the measure of cognition and function known as iADRS (combining both ADAS-Cog12 and ADCS-ADL). However, for purposes of this biotech being able to get this drug past the FDA and to the market, the only thing that truly matters would be meeting one of the co-primary efficacy endpoints. The two late-stage studies, known as RETHINK-ALZ and REFOCUS-ALZ, are pretty much identical for the most part except for a few differences. The differences are as follows:

  • The RETHINK-ALZ study goes for 52-weeks, while REFOCUS-ALZ is 72-weeks long instead
  • RETHINK-ALZ study is using either 100 mg of Simufilam or placebo twice daily over the 52-week period, whereas REFOCUS-ALZ is using 100 mg, 50 mg of Simufilam or placebo twice daily over the 72-week period instead
  • REFOCUS-ALZ is recruiting a total of 1,000 patients with Alzheimer's Disease, whereas RETHINK-ALZ is recruiting 750 patients with Alzheimer's Disease instead

A downside is that these studies are going to take some time to recruit and then treat all these patients. That means investors will have to wait for a long time before seeing if Simufilam ends up being statistically significant compared to placebo when both are given twice-daily. With RETHINK-ALZ only being a 52-week randomized study, the estimated completion date is October of 2023. On the other hand, with REFOCUS-ALZ being a 72-week study, the estimated completion date is listed as June of 2024. Therefore, in order to see if Simufilam beats placebo in AD, such an event won't be seen until at least one year from now.

Well, that's quite some time for a major catalyst event. Still, that doesn't mean that there aren't any other catalysts to look forward to in the near-term. One catalyst that investors can look forward to would be the initiation of an open-label extension study dealing with the phase 3 program highlighted directly above, which is expected to begin in the 2nd half of 2022. This new study is going to be great, because it will accomplish two tasks, which are as follows:

  • Provide additional safety/efficacy over a longer term extension period
  • Provide access to Simufilam at no-cost for patients who still want to take this drug even once done with one of the randomized phase 3 studies (REFOCUS-ALZ and RETHINK-ALZ)

Of course, it will only include those who finish the phase 3 randomize studies above and for those who want to continue taking Simufilam for AD.

A second catalyst would be results from a long-term open-label study which was initiated in March of 2020. This is testing long-term safety and tolerability of 100 mg Simufilam over a 12-month period. About 200 patients were recruited into this study and dosing for them is expected to conclude in Q4 of 2022. This means that Cassava believes it could release results from this particular study before the end of 2022. This study will be important, because it could not only show whether the drug is tolerable or not, but that it achieves similar cognitive improvement like the other open-label study data that was released.

Open-Label Data Results At 12 Months Offer Some Evidence Of Cognitive Improvement

Cassava Sciences released interim data from an ongoing open-label study. This interim analysis involves this study using 100 mg Simufilam given twice daily over a 12-month period. It was revealed from baseline to month 12 that overall ADAS-Cog11 scores improved an average of 1.5 points. In addition, it was shown that the drug was safe/tolerable to take, therefore no safety issues to make note of. ADAS-Cog stands for "Alzheimer's Disease Assessment Scale-Cognitive subscale" and then the "11" refers to the 11 parts that are evaluated, which are cognitive functions and non-cognitive functions. The range of scoring is from "0" to "70" and the higher the score that is observed, the greater the impairment the patient has with Alzheimer's Disease.

I'm still in the camp that Cassava Sciences offered some proof of concept thus far, but not inclined to say that this is a great long-term play quite yet. Why is that? Well, the problem is that open-label data showing an average of 1.5 points is great, but that's the point in that this was open-label study data. Thus far, this company has not proven that its drug Simufilam beats out placebo in terms of statistical significance in cognitive function. This point was revealed in release of the updated financials and progress on this open-label study data as follows:

"All clinical data from our open-label study are inherently exploratory in nature and, as with all open-label data, should be interpreted with caution. Data results from our open-label study does not constitute, and should not be interpreted as, evidence of therapeutic benefit for simufilam."

The two ongoing phase 3 studies are what will prove whether or not Simufilam beats out placebo with statistical significance in ADAS-Cog12 and ADCS-ADL. Until then, it is still highly speculative whether or not this drug actually helps patients with Alzheimer's Disease. I hope for the sake of patients who desperately need a new treatment option it works, but all these are reasons why this is viewed as a high risk/high reward speculative play. At least there has been biomarker data released to date providing some evidence that Simufilam is active against Alzheimer's Disease. Biomarker data is good to see, but in the end, it is the two phase 3 double-blind studies noted above that will truly settle the matter once and for all. The good news is that about a month ago Cassava was able to get rid of a huge overhang for the stock. This dealt with claims that the company had manipulated data in a 2020 paper on Simufilam. It was revealed that the Journal of Prevention of Alzheimer's Disease (JPAD) reviewed the data and found no evidence that data manipulation occurred in a 2020 paper on Simufilam co-authored by Cassava's personnel and its science collaborators. This at least establishes that biomarker data released to date for Simufilam in AD has not been manipulated/altered.


According to the 10-Q SEC Filing, Cassava Sciences had $197.2 million in cash and cash equivalents as of June 30, 2022. The reason for the cash on hand it currently has is because of an offering it did back in February of 2021. That is when it sold a total of 4,081,633 shares of its common stock at a price of $49 per share It raised total net proceeds of $189.8 million from it after deducting expenses. It believes that it has enough cash to fund its operations for at least 12 months from the date of its 10-Q SEC filing. My guess is that it could raise cash by at least 1st half of 2023. However, if the company's upcoming data readout expected before end of 2022 from the open-label study is highly positive, I expect it to raise cash immediately. That's because highly positive data could cause a significant increase in the stock price. Another alternative option it has is that it could just choose to sell shares from time to time instead. This would be based on the at-the-market offering program (ATM) it made whereby it could sell, from time to time, shares of its common stock with an aggregate offering price of $100 million. It was stated that there were no common stock sales under this ATM during the three or six months ending June 30, 2022 and 2021. At least it has this alternative option to raise cash if it can't do so immediately by other means.

Risks To Business

There are several risk factors that investors should be aware of before investing in Cassava Sciences. The first risk to consider would be the interim analysis from the long-term open-label study, using 100 mg of Simufilam twice daily over a 12-month period. Trial dosing from it is expected to conclude in Q4 of 2022 and then interim results from 200 Alzheimer's Disease patients are expected before the end of 2022. Besides possible cognitive improvement over this period, it will be important to see is safety remains a non-issue. The second risk factor to consider would be with respect to the two ongoing phase 3 studies, which are REFOCUS-ALZ and RETHINK-ALZ. The first study with an expected data readout would be RETHINK-ALZ, which is expected around October of 2023. The other phase 3 study, REFOCUS-ALZ, won't have results released until June of 2024. These are estimated timelines and it's quite possible that they could be pushed up further depending upon how fast/slow recruitment is. There is no guarantee that one or both of these phase 3 studies will reach either of the co-primary efficacy endpoints once all is said and done. A major risk issue is that Cassava Sciences' pipeline hinges on Simufilam for AD. If both of the studies prove to be unsuccessful, then there is nothing else left as a backup option. In essence, it is all or nothing.


The final conclusion is that Cassava Sciences is a high risk/high reward speculative biotech to look into. That's because it will not prove whether Simufilam truly works for the treatment of patients with Alzheimer's Disease until the results from the two phase 3 studies are released. Even then, there is something else to account for as to why I view it as such a high-risk play. It is said that drug treatment in this space remains unchanged, with about 99% of trials showing no difference between drug and placebo. My hope is that Cassava Sciences is that 1% so that these patients can finally have a new treatment option. Still, I wouldn't bet the farm on this at all but maybe a small position. I believe a small position is better suited for such a risky play as this. If one of the two phase 3 studies are successful in using Simufilam for AD, then it would provide for a huge reward for traders/investors. My other concern goes back to what I stated above, in that there is no other drug/indication in the pipeline. If Simufilam fails to deliver, then that would put investors in a highly negative spot. Biomarker data to date for this drug has been strong, along with open-label study data, but ultimately REFOCUS-ALZ or RETHINK-ALZ are what will prove whether Simufilam works for AD or not.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

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Actionable ideas on small-large cap biotech stocks through deep analysis.

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