Cassava Sciences Agrees to $40 Million Settlement with SEC Over Misleading Alzheimer’s Drug Trial Claims

Settlement Amount:
Cassava Sciences, along with two former executives, agreed to pay over $40 million to settle SEC charges related to misleading statements about the results of a Phase 2 clinical trial for an Alzheimer’s disease drug candidate, simufilam.

Allegations:
The SEC alleged that Cassava published trial results based on selectively chosen data, suggesting improvements in patients' memories, while the full data set showed no significant advancements.

Executives Involved:
Former CEO Remi Barbier and former Senior Vice President of Neuroscience Lindsay Burns agreed to pay $175,000 and $85,000, respectively, and consented to officer-and-director bars of three and five years.

Data Manipulation:
The SEC charged that Hoau-Yan Wang, a Cassava consultant, manipulated the data by identifying about a third of the patients enrolled in the trial, creating the appearance of dramatic improvements in biomarkers associated with Alzheimer’s disease.

Company Response:
Cassava Sciences maintained that the settlement was made without admitting or denying the SEC’s allegations and stated that it had cooperated fully with the investigation and implemented remedial measures to prevent similar issues in the future.

Financial Impact:
Despite the settlement, Cassava reiterated its estimate that it will have $117 million to $127 million in cash by the end of 2024.