Shares of Cassava Sciences stock (NASDAQ:SAVA) crashed 38% in after-hours trading yesterday after reports of a neuroscientist’s “scientific misconduct” did the rounds. According to a news publication, Science, a neuroscientist associated with Cassava’s research and development of Simufilam, was engaged in scientific wrongdoing.
The report cited an investigation by the City University of New York (CUNY), which found that Professor Hoau-Yan Wang was involved in data manipulation across 20 research papers. Many of these research papers provide support for Simufilam, which is Cassava’s experimental drug for treating Alzheimer’s.
Moreover, senior vice president, Lindsay Burns was alleged to have conspired in the misconduct, as he was a co-author in some of the papers alongside Wang. Burns is married to SAVA’s CEO Remi Barbier. The CUNY undertook a rigorous 10-month investigation into the matter, including interviewing Wang and other associates. The committee noted that Wang’s studies were manipulated, although due to the poor quality of the data and images, it could not completely justify the claims. The committee’s conclusion stems from the “long-standing and egregious misconduct in data management and record-keeping by Dr. Wang.”
The report by Science also stated that the CUNY committee’s conclusion was available in May, but the university failed to take any appropriate steps or actions against Wang. The CUNY is also alleged to have hindered the investigative process by not approving the sourcing of images from Wang’s computer for six months.
Cassava’s Denies Involvement in Data Manipulation
Since August 2021, Cassava and its researchers at CUNY have been accused of data manipulation and research misconduct. In response to Science’s report, Cassava made a statement denying any involvement in CUNY’s investigation. The biotechnology company also noted that it does not rely “exclusively” on research made at CUNY. In fact, the company is alleging that short-selling activity in SAVA stock rose 40% between June 30, 2023, and September 29, 2023. The company is also probing if short sellers have any role to play in these reports to gain profit.
CEO Barbier said, “We remain confident in the underlying science for simufilam, our lead drug candidate… We intend to continue to translate our passion for science into a novel drug for people living with Alzheimer’s disease. Our Phase 3 clinical program continues.”
Is SAVA a Good Stock to Buy?
On TipRanks, SAVA stock has a Moderate Buy consensus rating. This is based on two Buy ratings received during the last three months. Analyst Vernon Bernardino of H.C. Wainwright and analyst Soumit Roy of JonesTrading are optimistic about Cassava’s progress on the two Phase 3 trials of simufilam in treating Alzheimer’s disease as well as the pace of patient enrolment.
The average Cassava Sciences price forecast of $99.50 implies a massive 467.3% upside potential from current levels. Meanwhile, SAVA stock has lost 36.8% so far this year.
