Shares of Cassava Sciences SAVA plunged 32.1% on Tuesday after the company announced that its lead pipeline candidate, simufilam, failed to meet the prespecified co-primary endpoints in the second late-stage study for Alzheimer’s disease (AD). Simufilam is SAVA’s proprietary, investigational oral small molecule that targets the filamin A protein.

Cassava released top-line results from the phase III REFOCUS-ALZ study, which evaluated simufilam in patients with mild-to-moderate AD. Treatment with the drug failed to achieve a significant reduction in cognitive and functional decline in AD patients when compared to placebo over 76 weeks, as assessed by the ADAS-COG12 and ADCS-ADL scales. The study also failed to meet any pre-specified secondary and exploratory biomarker endpoints.

The REFOCUS-ALZ study had enrolled 1,125 AD patients who were randomized equally to receive either a twice-daily, oral dose of simufilam (50 mg or 100 mg tablets) or placebo for 76 weeks. The candidate, however, demonstrated an acceptable safety profile in the study.

Year to date, Cassava shares have plunged 19.5% against the industry’s 0.5% growth.

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SAVA’s AD Drug Failure in First Late-Stage Study

Under its AD program, Cassava evaluated simufilam in another late-stage study. In November 2024, the company faced a massive setback after it reported that the candidate failed to meet the primary endpoints in the late-stage RETHINK-ALZ study, which evaluated simufilam in patients with mild-to-moderate AD. Treatment with the drug failed to achieve a significant reduction in cognitive or functional decline in AD patients when compared to placebo over 52 weeks, as assessed by the ADAS-COG12 and ADCS-ADL scales. The study failed to meet any pre-specified secondary and exploratory biomarker endpoints as well.

Based on the above study results, SAVA had discontinued the 76-week phase III REFOCUS-ALZ study and the open-label extension study on the drug.

SAVA’s Next Steps

Following simufilam’s failure to demonstrate therapeutic benefit in AD patients in two late-stage studies, Cassava expects to phase out the AD program by the end of the second quarter of 2025. Despite the setbacks, SAVA has reportedly initiated preclinical studies to evaluate simufilam’s potential as a treatment for tuberous sclerosis complex-related epilepsy.

In early January, Cassava announced plans to reduce its workforce by 33% in first-quarter 2025 as part of ongoing cost management efforts. Additionally, it will discontinue the planned biomarker analysis of plasma samples from past mid-stage studies. The workforce reduction is expected to result in a one-time cost of approximately $0.4 million in first-quarter 2025.

Cassava ended the fourth quarter of 2024 with a cash balance of approximately $128.6 million.

Cassava Sciences, Inc. Price and Consensus

Cassava Sciences, Inc. price-consensus-chart | Cassava Sciences, Inc. Quote

Marketed Drugs in the AD Space

Currently, there are two drugs approved by the FDA in the AD space — Leqembi and Kisunla. Both these drugs are approved to treat early symptomatic AD, which includes mild cognitive impairment or dementia stage of the disease.

Leqembi, which was approved in 2023, is marketed by Japan-based Eisai in partnership with the Biogen BIIB market. Kisunla was developed by Eli Lilly LLY and received the FDA’s approval in 2024.

Eli Lilly and Biogen/Eisai drugs are based on similar mechanisms, reducing the accumulation of amyloid beta (Aβ) plaque in the brain. Aβ is a protein that is said to be the primary cause of the cognitive decline associated with AD.

SAVA’s Zacks Rank and Another Stock to Consider

Cassava currently carries a Zacks Rank #2 (Buy).

Another top-ranked stock from the sector is Gilead Sciences GILD, carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, Gilead Sciences’ earnings estimate for 2025 has improved from $7.81 to $7.87 per share. During the same timeframe, the estimate for earnings per share for 2026 has improved from $8.11 to $8.27. Year to date, shares of Gilead Sciences have gained 16.8%.

GILD’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.47%.

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This article originally published on Zacks Investment Research (zacks.com).

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