(Reuters) -Cassava Sciences said it will stop all trials of its Alzheimer’s disease drug after it failed a late-stage study, sending shares of the drug developer plummeting 83% in early trading on Monday.
The experimental treatment, simufilam, has been at the center of scrutiny after a medical professor linked to its development was charged with fraud in June.
Neuroscientist Hoau-Yan Wang allegedly submitted false data to get millions of dollars in public funds for research into the drug.
But Wang, a former science adviser to the company, was not involved with the late-stage studies of simufilam, Cassava has said.
Wang, who was previously listed as the co-lead scientist for simufilam on Cassava’s website, is no longer on the list.
In September, the U.S. Securities and Exchange Commission also charged Cassava and its two former executives for making misleading claims in 2020 about the results from previous clinical trials of the drug and demanded a $40 million penalty.
A few years ago two physicians unaffiliated with Cassava had alleged the research underpinning simufilam was based on manipulated and misrepresented data.
In the latest late-stage study, simufilam failed to reduce cognitive or functional decline in patients with mild-to-moderate Alzheimer’s disease, compared to placebo, the company said, prompting it to discontinue ongoing studies of the drug.
But the drug continued to show an overall favorable safety profile, said the company, which will present the data at an upcoming medical meeting.
CEO Rick Barry said the company will continue to review the data to understand the results better and evaluate its next steps.
Simufilam is the only drug that Cassava was developing, along with a blood-based diagnostic test, called SavaDx, which is in early stage studies for Alzheimer’s.
Cassava reported about $149 million in cash and equivalents as of Sept. 30, 2024.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Tasim Zahid and Shinjini Ganguli)
