After multiple neurology experts harshly criticized Cassava Sciences’ (NASDAQ:SAVA) main thesis and the integrity of its data, I strongly recommend investors refrain from owning any shares of SAVA stock.
In my many years of writing about pharmaceutical companies, I’ve never seen multiple experts criticize a drug maker so harshly. These professionals’ tremendous skepticism towards Cassava and its proposed Alzheimer’s treatment, Simufilam, combined with a previous negative report on Cassava, have made me extremely bearish on the firm’s shares.
As I explained in a recent article about SAVA stock, scientists told The New York Times that Cassava’s theory regarding Simufilam’s mechanism of action is not supported by any independent studies. Specifically, no scientist other than Cassava’s employees and associates have ever presented any evidence that Simufilam will work as intended.
Moreover, one neuroscientist who spoke to The Times, Dr. Thomas Sudhof of Stanford, went so far as to label Cassava’s theory “implausible and contrived.” Making matters worse, scientific publication PLoS One has retracted five papers written by Hoau-Yan Wang, Cassava’s chief collaborator, according to The Times.
The company’s CEO, Remi Barbier, issued a letter to the Science Editor of The New York Times, attacking the newspaper’s critical article. Barbier stated seven of the nine experts quoted by The Times had previously publicly criticized Simufilam in public forums.
The letter does make some valid points about The Times’ article. However, that doesn’t change the fact that eight experts were highly critical of Cassava and its drug. Nor did the CEO bring up any outside experts in the letter who do stand behind the company and its drug.
Barbier brought up potential conflicts of interest regarding two of the nine scientists who spoke with The Times. He also pointed out one of the sources is a cardiologist, not a neurologist. Barbier also suggested other sources may have been paid by individuals with conflicts of interest.
Still, the unusual nature of the scientists’ charges against Cassava, along with the disturbing report by short seller Quintessential Capital last year, make SAVA stock far too risky for any investor to own.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.