Cassava settlement overview:
- Who: Clinical-stage biopharmaceutical company Cassava Sciences agreed to pay more than $40 million to end U.S. Securities and Exchange Commission claims.
- Why: The SEC argued Cassava made misleading statements about phase two clinical trial results for its potential Alzheimer’s disease therapeutic PTI-125, also known as simufilam.
- Where: Cassava is based in Austin, Texas.
Clinical-stage biopharmaceutical company Cassava Sciences agreed to pay more than $40 million to resolve claims it made misleading statements about the results of a clinical trial for a potential Alzeheimer’s disease therapeutic, PTI-125.
The U.S. Securities and Exchange Commission claimed Cassava — along with Remi Barbier, its founder and former CEO, and Dr. Lindsay Burns, former senior vice president of neuroscience — made false and misleading statements about biomarker results from phase two clinical trials for its drug candidate PTI-125, also known as simufilam.
The SEC lawsuit argued Cassava claimed in filings with the agency that it conducted phase two bioanalyses under blinded conditions when, in reality, the company allegedly gave the doctor who conducted the analyses information that enabled him to partially unblind himself prior to performing the bioanalyses.
The SEC claims the doctor manipulated the reported results to show patients taking the placebo had little change in biomarkers on average while patients who took PTI-125 showed significant improvement on average.
Cassava raised $260M+ partly based on false results, SEC argued
The SEC argued Cassava raised hundreds of millions of dollars in the wake of the reported results, which allegedly claimed patients who took PTI-125 “showed significant improvement across every measured biomarker for Alzheimer’s disease compared with patients who took a placebo,” according to the lawsuit.
“After Cassava reported its Phase 2b trial results, the company raised more than $260 million in new funding, in part based on false biomarker results provided by Respondent,” the SEC writes in a cease-and-desist order.
Cassava did not admit or deny the SEC’s accusations when agreeing to pay more than $40 million in civil penalties, which includes $175,000 from Barbier, $85,000 from Burns and $50,000 from Dr. Hoau-Yan Wang, the doctor who conducted the analyses, according to the settlement.
The SEC lawsuit argued Wang, a Cassava consultant and co-developer of PTI-125, knew the allegedly manipulated clinical trial results would be reported to the market.
Cassava would go on to publicize the allegedly manipulated phase two clinical trial results in a press release and investor presentation slide deck in September 2020, according to the agency.
In 2021, shareholders filed a class action lawsuit against Cassava over similar allegations that the company artificially inflated its stock price by allegedly manipulating data about the effectiveness of its Alzheimer’s treatment.
Were you injured by Cassava’s alleged manipulation of phase two clinical trial results for the potential Alzheimer’s therapeutic? Let us know in the comments.
The Cassava Alzheimer’s clinical trial lawsuit is Securities and Exchange Commissions v. Cassava Sciences Inc., et al., Case No. 1:24-cv-01150, in the U.S. District Court for the Western District of Texas.
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