Cassava Sciences Answers Allegations Of Fraud: “We’re Not An Entertainment Company; We’re A Science Shop”
Cassava Sciences, Inc. (Nasdaq: SAVA) saught this morning to put an end to the allegations of fraud being made towards the company, particularly ones that are related to its ongoing clinical trial for its Alzheimer’s disease drug candidate, Simufilam. The biopharmaceutical firm released a statement today explaining its side and claiming that the said allegations “are false and misleading”.
“As a science organization, we conduct experiments that generate data. We do not invent stuff out of thin air. Needless to say, we intend to vigorously defend ourselves and our stakeholders against false and misleading allegations,” read the statement made by Cassava Sciences CEO Remi Barbier.
Last week, claims of fraud were made by the law firm Pomerantz LLP saying that the company’s “science is improbable, unexpected, and unique to Cassava Sciences” and therefore constitutes wrongdoing. The allegations made the online trending space and within one week, the firm’s “market valuation declined by over $2 billion.”
Related to this, the company also highlighted that the New York-based law firm making the allegations disclosed two days later that they represent clients who have short positions on Cassava Sciences. Barbier, who also sits as the company’s chairman of the board, alluded, “When done correctly, short selling is legal. But there are some short sellers who make outlandish allegations, then make a killing when the stock price declines. In fact, this practice has a name. It’s called ‘short and distort’. Look it up.”
In an earlier statement, the embattled drugmaker answered the alleged fraudulent activities hurled against it, including the accusation of generating its own biomarker data during phase 2b of its Simufilan clinical trials and data manipulation through extensive use of protein-marker technique Western blot analysis.
“As a reminder, Cassava Sciences does not have its own laboratory facilities… For this reason, we don’t have the original films or images for the Western blots in question. Those were generated by our science collaborator at CUNY, who is Prof. Wang… I have also asked CUNY that its conclusionary [sic] findings be made available to the public,” Barbier added.
The biotech firm’s founder also addressed the citizen’s petition filed in August 2021 with the Food and Drug Administration questioning the quality and integrity of the Simufilam study results, which the law firm claims to be evidence of wrongdoing on the company’s part. Barbier responded, “To my knowledge, a citizen’s petition is typically filed against an approved drug or a drug candidate that is up for FDA approval. Our drug candidate in Alzheimer’s disease fits neither of those two categories.”
Barbier further contradicted the claim by reporting that the regulatory agency has not contacted the company about the petition nor the allegations. “In fact, we recently reached [an] agreement with FDA for two Special Protocol Assessments for our Phase 3 program. We remain full-speed ahead with our clinical program in Alzheimer’s disease,” he added.
On the other hand, Barbier admitted mistakes in the company’s presentation of data related to the Alzheimer drug candidate trials. “Let me be clear: these are only visual errors. They should have been caught in proofing but were not… It’s worth repeating: the data analysis is correct; the visual display of the data is not correct.”
The biopharmaceutical company’s chief officer also took on the discussion on social media of the allegations: “My rule is this: we do not engage on social media platforms. We won’t take the bait; we won’t go there. It’s not what we do. We’re not an entertainment company; we’re a science shop. Our currency is data. That’s how we plan to win.”
The firm also relayed that it recently got the notification from the Institutional Review Board on the approval of its phase 3 study protocols for the Simufilam clinical trials. Barbier expects the “next public disclosure for this study” will be about the interim results of the said trials for the drug candidate.
Cassava Sciences last traded at US$54.35 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.