Cassava Sciences, Inc.

Cassava is a clinical stage biotechnology company. Its lead therapeutic product candidate is called simufilam (formerly PTI-125) developed as a treatment for Alzheimer’s disease (“AD”). Simufilam purportedly targets an altered form of a protein called filamin A (“FLNA”) in the Alzheimer’s brain and reverts it to its native, healthy conformation, thereby countering the downstream toxic effects of altered FLNA.

On August 24, 2021, after the market closed, reports emerged about a citizen petition submitted to the U.S. Food and Drug Administration (“FDA”) concerning the accuracy and integrity of clinical data for simufilam. The petition requested that the FDA halt Cassava’s clinical trials pending a thorough audit of the publications and data relied upon by the Company. Among other things, the petition stated that the “[d]etailed analysis of the western blots [relied on by Cassava to support the connection between simufilam and Alzheimer’s] shows a series of anomalies that are suggestive of systematic data manipulation and misrepresentation.” It also stated that the methodology for studies “about Simufilam’s effects in experiments conducted on postmortem human brain tissue . . . defies logic, and the data presented again have hallmarks of manipulation.” The petition further stated that, after initial analyses of Phase 2b trials found that Simufilam was ineffective in improving the primary biomarkers endpoint, “Cassava had these samples analyzed again and this time reported that Simufilam rapidly and robustly improved a wide array of biomarkers” and the reanalysis “shows signs of data anomalies or manipulation.”

On August 25, 2021, before the market opened, Cassava issued a response to the petition, claiming that the allegations regarding scientific integrity are false and misleading. Among other things, the Company claimed that the clinical data, which the citizen petition stated had been reanalyzed to show simufilam was effective, had been generated by Quanterix Corp. (“Quanterix”), an independent company, suggesting that the reanalysis was valid.

On this news, the Company’s share price fell $36.97, or 32%, to close at $80.86 per share on August 25, 2021, on unusually heavy trading volume.

On August 27, 2021, before the market opened, Quanterix issued a statement denying the Company’s claims, stating that it “did not interpret the test results or prepare the data” touted by Cassava.

The same day, Cassava responded to Quanterix’s statement, stating that “Quanterix’[s] sole responsibility with regard to this clinical study was to perform sample testing, specifically, to measure levels of p-tau in plasma samples collected from study subjects.”

On this news, the Company’s share price fell $12.51, or 17.6%, to close at $58.34 per share on August 27, 2021, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that data underlying the foundational research for Cassava’s product candidates had been manipulated; (2) that experiments using post-mortem human brain tissue frozen for nearly 10 years was contrary to a basic understanding of neurobiology; (3) that biomarker analysis for patients treated with simufilam had been manipulated to conclude that simufilam was effective; (4) that Quanterix, an independent company, had not interpreted the test results or prepared the data charts for the biomarker analysis for patients treated with simufilam; (5) that, as a result of the foregoing, there was a reasonable likelihood that Cassava would face regulatory scrutiny in connection with the development of simufilam; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.